EXHIBIT 10.22
--------------------------------------------------------------------------------
FOURTH AMENDMENT TO CREDIT AGREEMENT
BETWEEN
CONTANGO OIL AND GAS COMPANY
AND
GUARANTY BANK, FSB
AS LENDER
Effective as of September 9, 2002
--------------------------
REDUCING REVOLVING LINE OF CREDIT OF UP TO $50,000,000
--------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
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 .................................... 1
1.05 Number and Gender ........................................ 2
ARTICLE II AMENDMENTS ............................................... 2
2.01 Amendment of Section 1.2 ................................. 2
ARTICLE III CONSENT TO ASSIGNMENT .................................... 2
ARTICLE IV CONDITIONS ............................................... 2
4.01 Receipt of Documents ..................................... 2
4.02 Accuracy of Representations and Warranties ............... 3
4.03 Matters Satisfactory to Lender ........................... 3
ARTICLE V REPRESENTATIONS AND WARRANTIES ........................... 3
ARTICLE VI RATIFICATION ............................................. 4
ARTICLE VII MISCELLANEOUS ............................................ 4
7.01 Scope of Amendment ....................................... 4
7.02 Agreement as Amended ..................................... 4
7.03 Parties in Interest ...................................... 4
7.04 Rights of Third Parties .................................. 4
7.05 ENTIRE AGREEMENT ......................................... 4
7.06 GOVERNING LAW ............................................ 4
7.07 JURISDICTION AND VENUE ................................... 5
i
FOURTH AMENDMENT TO CREDIT AGREEMENT
This FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Fourth Amendment") is made
and entered into effective as of September 9, 2002, between CONTANGO OIL AND GAS
COMPANY, a Delaware corporation, (the "Borrower"), and GUARANTY BANK, FSB, a
federal savings bank (the "Lender").
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 June 29, 2001, as amended by First Amendment
to Credit Agreement dated January 8, 2002, Second Amendment to Credit Agreement
dated February 13, 2002, and Third Amendment to Credit Agreement dated April 26,
2002 (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 Fourth Amendment, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 Terms Defined Above. As used herein, each of the terms "Agreement,"
"Borrower," "Fourth Amendment," and "Lender" 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 Fourth Amendment to Article or Section
numbers shall be to Articles and Sections of this Fourth Amendment, unless
expressly stated herein to the contrary. References in this Fourth Amendment to
"hereby," "herein," hereinafter," hereinabove," "hereinbelow," "hereof," and
"hereunder" shall be to this Fourth Amendment in its entirety and not only to
the particular Article or Section in which such reference appears.
1.04 Articles and Sections. This Fourth 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 Fourth 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
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 are added to read as follows:
"Guarantors" shall mean Contango STEP I, Inc. and Contango STEP, LP.
"Guaranties" shall mean the Guaranties executed by the Guarantors.
ARTICLE III
CONSENT TO FORMATION OF CONTANGO STEP I, INC.
AND CONTANGO STEP II, INC.
CONSENT TO ASSIGNMENT
The Lender hereby consents to the Borrower's investment in Contango STEP I,
Inc. and Contango STEP II, Inc., each a Delaware corporation and wholly-owned
subsidiary of the Borrower.
The Lender hereby consents to the assignment of certain Oil and Gas
Properties by the Borrower to Contango STEP, LP as described in that certain
assignment dated September 9, 2002, wherein the Borrower assigns STEP LP, the
Oil and Gas Properties described therein and Contango STEP, LP assumes the
obligations described in the Mortgage executed by the Borrower for the benefit
of the Lender covering the Oil and Gas Properties described in such assignment.
ARTICLE IV
CONDITIONS
The obligation of the Lender to amend the Agreement as provided herein is
subject to the fulfillment of the following conditions precedent:
4.01 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:
2
(a) multiple counterparts of this Fourth Amendment as requested by the
Lender;
(b) Guaranty of Contango STEP I, Inc.;
(c) Guaranty of Contango STEP, LP;
(d) Security Agreement (Stock Pledge) by the Borrower pledging the stock
of Contango STEP I, Inc. and Contango STEP II, Inc., together with
blank stock powers;
(e) undated letters, in form and substance satisfactory to the Lender,
from Contango STEP, LP to each purchaser of production and disburser
of the proceeds of production from or attributable to the Oil and Gas
Property described in the Assignment described in (f) below, together
with additional letters with the addressees left blank, authorizing
and directing the addressees to make future payments attributable to
production from such properties directly to the Lender;
(f) Assignment dated September 9, 2002, from the Borrower to Contango
STEP, LP;
(g) the opinion of Xxxxxx, Xxxxx and Xxxxxxx, L.L.P., counsel to Contango
STEP I, Inc., in substantially the same form as set forth in Exhibit
IV of the Credit Agreement dated June 29, 2001, covering Contango
STEP, LP, Contango STEP I, Inc. and Contango STEP II, Inc.; and
(h) such other agreements, documents, items, instruments, opinions,
certificates, waivers, consents, and evidence as the Lender may
reasonably request.
4.02 Accuracy of Representations and Warranties. The representations and
warranties contained in Article IV of the Agreement and this Fourth Amendment
shall be true and correct.
4.03 Matters Satisfactory to Lender. All matters incident to the
consummation of the transactions contemplated hereby shall be satisfactory to
the Lender.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower hereby expressly re-makes, in favor of the Lender, 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 VI
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 Fourth Amendment.
ARTICLE VII
MISCELLANEOUS
7.01 Scope of Amendment. The scope of this Fourth Amendment is expressly
limited to the matters addressed herein and this Fourth 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 Fourth Amendment.
7.02 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 Fourth Amendment.
7.03 Parties in Interest. All provisions of this Fourth Amendment shall be
binding upon and shall inure to the benefit of the Borrower, the Lender and
their respective successors and assigns.
7.04 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.
7.05 ENTIRE AGREEMENT. THIS FOURTH 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 FOURTH 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.
7.06 GOVERNING LAW. THIS FOURTH AMENDMENT, THE AGREEMENT AND THE NOTE
SHALL BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE
WITH AND
4
GOVERNED BY THE LAWS OF THE STATE OF TEXAS. THE PARTIES ACKNOWLEDGE AND AGREE
THAT THIS AGREEMENT AND THE NOTE AND THE TRANSACTIONS CONTEMPLATED HEREBY BEAR A
NORMAL, REASONABLE, AND SUBSTANTIAL RELATIONSHIP TO THE STATE OF TEXAS.
7.07 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO,
ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM
THIS FOURTH 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.
5
IN WITNESS WHEREOF, this Fourth Amendment to Credit Agreement is executed
effective the date first hereinabove written.
BORROWER
CONTANGO OIL AND GAS COMPANY
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------
Xxxxxxx X. Xxxxxxx
Vice President and Treasurer
6
LENDER
GUARANTY BANK, FSB
By: /s/ XXXXXXXX XXXXXXX
------------------------
Xxxxxxxx Xxxxxxx
Vice President
7
