6th Amdmt. to Credit Agmt. between Contango Oil & Gas Company and Guaranty Bank



 EXHIBIT 10.24 
  

  
 SIXTH AMENDMENT TO CREDIT AGREEMENT 
  
 BETWEEN

  
 CONTANGO OIL AND GAS COMPANY 
  
 AND 
  
 GUARANTY BANK, FSB 
 AS LENDER 
  
 Effective as of September 1, 2003

  

  
 REDUCING REVOLVING LINE OF CREDIT OF UP TO $50,000,000 
 REDUCING REVOLVING TERM LOAN OF $2,500,000 
  

  

  
  







 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	  	1
	 ARTICLE II     WAIVERS
	  	2
	 2.01
	  	Waivers	  	2
	 2.02
	  	Limitation on Waivers	  	2
	 ARTICLE III    AMENDMENTS
	  	2
	 3.01
	  	Amendment of Section 1.2	  	2
	 3.02
	  	Amendment of Section 2.1A (a) and (b)	  	2
	 3.03
	  	Amendment of Section 2.6	  	3
	 3.04
	  	Amendment of Exhibit I(A)	  	3
	 ARTICLE IV    CONDITIONS
	  	3
	 4.01
	  	Receipt of Documents	  	3
	 4.02
	  	Accuracy of Representations and Warranties	  	4
	 4.03
	  	Matters Satisfactory to Lender	  	4
	 ARTICLE V     REPRESENTATIONS AND WARRANTIES
	  	4
	 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	  	5
	 7.07
	  	JURISDICTION AND VENUE	  	5

  

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 SIXTH AMENDMENT TO CREDIT AGREEMENT 
  
 This SIXTH AMENDMENT TO CREDIT AGREEMENT (this “Sixth
Amendment”) is made and entered into effective as of September 1, 2003, 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, Third Amendment to Credit Agreement dated April 26, 2002, Fourth Amendment to Credit Agreement dated September 9, 2002, Letter Amendment to Credit Agreement dated January 7, 2003, and Fifth Amendment to Credit Agreement dated June 1, 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 Sixth Amendment, the parties hereto agree as follows: 
  
 ARTICLE I 
 DEFINITIONS

  
 1.01 Terms Defined Above. As used herein, each of
the terms “Agreement,” “Borrower,” “Sixth 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 Sixth Amendment to Article or Section numbers shall be to Articles and Sections of this Sixth Amendment, unless
expressly stated herein to the contrary. References in this Sixth Amendment to “hereby,” “herein,” hereinafter,” hereinabove,” “hereinbelow,” “hereof,” and “hereunder” shall be to this
Sixth Amendment in its entirety and not only to the particular Article or Section in which such reference appears. 
  
 1.04 Articles and Sections. This Sixth 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 Sixth 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 
  

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 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 
 WAIVERS 
  
 2.01 Waivers. The Lender hereby waives, for one time only, any Default or Event of Default arising under the Agreement or any other Loan Document
solely as a result of violations of Section 6.7 to allow the Borrower to repurchase 330,000 options held by Brad Juneau for a total of up to $800.000. 
  
 2.02 Limitation on Waivers. The scope of the waivers set forth in Section 2.01 are expressly limited to their terms and do not extend to any other
or future breaches, Defaults, violations or Events of Default under the Agreement or any other Loan Document. 
  
 ARTICLE III 
 AMENDMENTS 
  
 The Borrower and the Lender hereby amend the Agreement in the following
particulars: 
  
 3.01 Amendment of Section 1.2. Section 1.2
of the Agreement is hereby amended as follows: 
  
 The following
definitions are added and/or amended to read as follows: 
  
 “Floating Rate” shall mean shall mean an interest rate per annum equal to the Base Rate from time to time in effect plus one-fourth percent (1/4%) for the revolving line of credit and plus three-fourths of one percent
(0.75%) for the Reducing Revolving Term Loan, but in no event exceeding the Highest Lawful Rate. 
  
 “LIBOR Base Rate” shall mean with respect to any Euro-Dollar Amount, the rate per annum (expressed as a percentage) determined by Lender
to be equal to the sum of (a) the quotient of the LIBOR Rate for the applicable Euro-Dollar Amount and the applicable Interest Period, divided by (1 minus the applicable Reserve Requirement), rounded up to the nearest 1/100 of 1%, plus (b) the
applicable Assessments, plus (c) two percent (2%) for the revolving line of credit and (d) three percent (3%) for the Reducing Revolving Term Loan. 
  
 “Reducing Revolving Term Loan Available Commitment” shall mean on the date of this Sixth Amendment, the sum of $2,500,000. Such amount
shall reduce by $425,000 per month beginning October 1, 2003. 
  
 3.02 Amendment of Section 2.1A (a) and (b). Section 2.1A (a) and (b) of the Agreement shall be amended to read as follows: 
  

	 	“A.	Reducing Revolving Term Loan 

  

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	 	(a)	The Reducing Revolving Term Loan shall be in the total amount of $2,500,000, with interest at the LIBOR Base Rate payable as set forth in the Agreement or the Floating Rate payable
monthly by the Borrower to the Lender beginning on the first day of the month following the month in which borrowings were made under this facility, and continuing on the first day of each calendar month thereafter until the Reducing Revolving Term
Loan Balance is zero and/or until March 1, 2004, when all sums owing under this facility are due and payable. 

  

	 	(b)	The Borrower may only borrow under the Reducing Revolving Term Loan up to the amount of the Reducing Revolving Term Loan Available Commitment. Principal payments of the greater of
$425,000 per month or an amount necessary to reduce the Reducing Revolving Term Loan Balance to the Reducing Revolving Term Loan Available Commitment will be required should the amount of borrowings equal to or exceed the Reducing Revolving Term
Loan Available Commitment. 

  
 3.03 Amendment of
Section 2.6. Section 2.6(a) of the Agreement is amended to read as follows: 
  
 “2.6 Borrowing Base Determinations. (a) The Borrowing Base as of September 1, 2003, is acknowledged by the Borrower and the Lender to be $21,700,000. Commencing on October 1, 2003, and continuing
thereafter on the first day of each calendar month through the next Borrowing Base review, the amount of the Borrowing Base shall be reduced by $620,000.” 
  

3.04 Amendment of Exhibit I(A). Exhibit I(A), i.e. the Form of Reducing Revolving Term Note, shall be as set forth on Exhibit I(A) to this Sixth
Amendment. 
  
 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: 
  

	 	(a)	multiple counterparts of this Sixth Amendment as requested by the Lender; 

  

	 	(b)	Reducing Revolving Term Note; 

  

	 	(c)	payment by the Borrower to the Lender an Engineering Fee in the amount of $5,000; and 

  

	 	(d)	such other agreements, documents, items, instruments, opinions, certificates, waivers, consents, and evidence as the Lender may reasonably request. 

  

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 4.02 Accuracy of Representations and Warranties. The representations and warranties contained in
Article IV of the Agreement and this Sixth 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. 
  
 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 Sixth Amendment. 
  
 ARTICLE VII 
 MISCELLANEOUS

  
 7.01 Scope of Amendment. The scope of this Sixth
Amendment is expressly limited to the matters addressed herein and this Sixth 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 Sixth 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 Sixth Amendment. 
  
 7.03 Parties
in Interest. All provisions of this Sixth 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 SIXTH 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 SIXTH AMENDMENT, THE AGREEMENT, THE NOTES, THE SECURITY INSTRUMENTS, AND THE OTHER 
  

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 WRITTEN DOCUMENTS REFERRED TO IN THE AGREEMENT OR EXECUTED IN CONNECTION WITH OR AS SECURITY FOR THE NOTES 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 SIXTH AMENDMENT, THE AGREEMENT AND
THE NOTES 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 NOTES 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 SIXTH 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. 
  

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 IN WITNESS WHEREOF, this Sixth Amendment to Credit Agreement is executed effective the date first
hereinabove written. 
  

	 BORROWER
  
 CONTANGO OIL AND GAS COMPANY

		
	By:	 	 /s/    WILLIAM H. GIBBONS        

	 	

	 	 	 William H. Gibbons
 Vice President and Treasurer



  

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	 LENDER
  
 GUARANTY BANK, FSB

		
	By:	 	 /s/     RICHARD E. MENCHACA        

	 	

	 	 	 Richard E. Menchaca
 Senior Vice President



  
  

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 EXHIBIT I(A) 
  
 [FORM OF REDUCING REVOLVING TERM NOTE]  
 REDUCING REVOLVING TERM 
 PROMISSORY NOTE 
  

	 $2,500,000
	 	Houston, Texas	 	September 1, 2003

  
 FOR VALUE RECEIVED and
WITHOUT GRACE, the undersigned (“Maker”) promises to pay to the order of GUARANTY BANK, FSB (“Payee”), at its banking quarters in Houston, Harris County, Texas, the sum of TWO MILLION, FIVE HUNDRED THOUSAND
DOLLARS ($2,500,000), or so much thereof as may be advanced against this Note pursuant to the Credit Agreement dated of even date herewith by and between Maker and Payee (as amended, restated, or supplemented from time to time, the “Credit
Agreement”), together with interest at the rates and calculated as provided in the Credit Agreement. 
  
 Reference is hereby made to the Credit Agreement for matters governed thereby, including, without limitation, certain events which will entitle the holder
hereof to accelerate the maturity of all amounts due hereunder. Capitalized terms used but not defined in this Note shall have the meanings assigned to such terms in the Credit Agreement. 
  
 This Note is issued pursuant to, is the “Note” under, and is payable as provided in the Credit Agreement. Subject
to compliance with applicable provisions of the Credit Agreement, Maker may at any time pay the full amount or any part of this Note without the payment of any premium or fee, but such payment shall not, until this Note is fully paid and satisfied,
excuse the payment as it becomes due of any payment on this Note provided for in the Credit Agreement. 
  
 Without being limited thereto or thereby, this Note is secured by the Security Instruments. 
  
 THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF
RELATING TO CONFLICTS OF LAW; PROVIDED, HOWEVER, THAT CHAPTER 345 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL NOT APPLY TO THIS NOTE. 
  

	 BORROWER:
  
 CONTANGO OIL AND GAS COMPANY

		
	By:	 	 
	 	

	 	 	 William H. Gibbons
 Vice President and Treasurer