Exhibit 10.4


 


THIRD AMENDMENT TO NINTH RESTATED LOAN
AGREEMENT


 


THIS THIRD AMENDMENT TO NINTH RESTATED LOAN
AGREEMENT 
(hereinafter referred to as the “Third Amendment”) executed as of the
3rd day of March, 2004, by and among CLAYTON WILLIAMS ENERGY, INC., a Delaware
corporation (the “CWE”), WARRIOR GAS CO., a Texas corporation (“Warrior “) (CWE
and Warrior being hereinafter sometimes collectively referred to as
“Borrower”), CWEI ACQUISITIONS, INC., a Delaware corporation (“CWEI”), CWEI
ROMERE PASS ACQUISITION CORP., a Delaware corporation (“CWEIRPA”) and ROMERE
PASS ACQUISITION L.L.C., a Delaware limited liability company (“Romere”) (CWEI,
CWEIRPA and Romere being hereinafter sometimes collectively referred to as
“Guarantors”), BANK ONE, NA, a national banking association (“Bank One”), UNION
BANK OF CALIFORNIA, N.A., a national banking association (“Union”) and BANK OF
SCOTLAND (“BOS”) (Bank One, Union Bank and BOS each in their capacity as a
lender hereunder together with each and every future holder of any note issued
pursuant to this Agreement are hereinafter collectively referred to as “Banks”,
and individually as a “Bank”) and Bank One, as “Agent”.


 


WITNESSETH:


 


WHEREAS, on
July 18, 2002, Borrower, CWEI, Romere Pass Acquisition Corp., a Delaware
corporation (“Romere Corp”), Bank One, Union, BOS and Agent entered into a
Ninth Restated Loan Agreement, as amended by that certain First Amendment to
Ninth Restated Loan Agreement dated as of August 9, 2002 and by the
certain Second Amendment to Ninth Restated Loan Agreement dated as of
December 23, 2003 (as amended, restated or modified from time to time, the
“Ninth Restated”);


 


WHEREAS, the Borrower has requested that Agent and
the Banks amend the Ninth Restated to (i) reduce the Borrowing Base to
$95,000,000.00 and (ii) extend the Maturity Date to December 31, 2005; and
Agent and the Banks have agreed to do so on the terms and conditions
hereinafter set forth.


 


NOW, THEREFORE, the
parties hereto agree as follows:


 


1.                                       Unless
otherwise defined herein, all defined terms used herein shall have the same
meaning ascribed to such terms in the Ninth Restated.


 


2.                                       Section 1
of the Ninth Restated is hereby amended by deleting the definition of “Maturity
Date” and the following is inserted in lieu thereof:


 


Maturity Date means
December 31, 2005.


 


3.                                       Section 7(a)
is hereby amended by deleting such section and the following is inserted
in lieu thereof:


 


(a)                                  Borrowing
Base.  During the period from
March 3, 2004 to the next determination date, the Borrowing Base shall be
$95,000,000.00.


 


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4.                                       The
Borrower shall pay to Agent, for the ratable benefit of the Banks, an amendment
fee equal to one-eighth of one percent (.125%) of the Borrowing Base, which fee
is due and payable on the date hereof.


 


5.                                       This
Third Amendment shall be effective as of the date first above written, but only
upon satisfaction of the conditions precedent set forth in Paragraph 6
hereto (the “Third Amendment Effective Date”).


 


6.                                       The
obligations of Banks under this Third Amendment shall be subject to the
satisfaction of the following conditions precedent:


 


(a)                                  Execution
and Delivery.  The Borrower shall
have executed and delivered this Third Amendment and other required documents,
all in form and substance satisfactory to the Banks.


 


(b)                                 Guarantors’
Execution and Delivery.  The
Guarantors shall have executed and delivered this Third Amendment and other
required documents, all in form and substance satisfactory to the Banks;


 


(d)                                 Corporate
Resolutions.  Banks shall have
received appropriate certified corporate resolutions of each Borrower and each
Guarantor;


 


(e)                                  Representations
and Warranties.  The representations
and warranties of Borrower under the Ninth Restated are true and correct in all
material respects as of such date, as if then made (except to the extent that
such representations and warranties related solely to an earlier date);


 


(c)                                  No
Event of Default.  No Event of
Default shall have occurred and be continuing nor shall any event have occurred
or failed to occur which, with the passage of time or service of notice, or
both, would constitute an Event of Default;


 


(d)                                 Other
Documents.  Each Bank shall have
received such other instruments and documents incidental and appropriate to the
transaction provided for herein as such Bank or its counsel may reasonably
request, and all such documents shall be in form and substance satisfactory to
such Bank; and


 


(e)                                  Legal
Matters Satisfactory.  All legal
matters incident to the consummation of the transactions contemplated hereby
shall be satisfactory to special counsel for Bank retained at the expense of
Borrower.


 


7.                                       Except
to the extent its provisions are specifically amended, modified or superseded
by this Third Amendment, the representations, warranties and affirmative and
negative covenants of the Borrower contained in the Ninth Restated are
incorporated herein by reference for all purposes as if copied herein in
full.  The Borrower hereby restates and
reaffirms each and every term and provision of the Ninth Restated, as amended,
including, without limitation, all representations, warranties and affirmative
and negative covenants.  Except to the


 


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extent its provisions are specifically
amended, modified or superseded by this Third Amendment, the Ninth Restated, as
amended, and all terms and provisions thereof shall remain in full force and
effect, and the same in all respects are confirmed and approved by the Borrower
and the Banks.


 


8.                                       This
Third Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.


 


9.                                       The
Guarantors hereby consent to the execution of this Third Amendment by the
Borrower and reaffirm their guaranty of all of the obligations of the Borrower
to the Bank.  Borrower and each
Guarantor acknowledge and agree that the renewal, extension and amendment of
the Ninth Restated shall not be considered a novation of account or new
contract but that all existing rights, titles, powers, Liens, security
interests and estates in favor of the Banks constitute valid and existing
obligations and Liens and security interests as against the Collateral in favor
of the Banks.  Borrower and each
Guarantor confirm and agree that (a) neither the execution of this Third
Amendment or any other Loan Document nor the consummation of the transactions
described herein and therein shall in any way effect, impair or limit the
covenants, liabilities, obligations and duties of the Borrower and under the
Loan Documents and (b) the obligations evidenced and secured by the Loan
Documents continue in full force and effect. 
Guarantors hereby further confirm that they unconditionally guarantee to
the extent set forth in their Guaranty the due and punctual payment and
performance of any and all amounts and obligations owed to the Banks under the
Ninth Restated or the other Loan Documents.


 


[SIGNATURE PAGES FOLLOW]


 


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IN WITNESS WHEREOF,
the parties have caused this Third Amendment to Ninth Restated to be duly
executed as of the date first above written.


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
  CLAYTON WILLIAMS ENERGY, INC.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ MEL G. RIGGS

  	
   

  
	
   

  	
   

  	
        Mel G. Riggs, Senior Vice
  President-Finance

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WARRIOR GAS CO.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ MEL G. RIGGS

  	
   

  
	
   

  	
   

  	
        Mel G. Riggs, Senior Vice
  President-Finance

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  CWEI ACQUISITIONS, INC.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ MEL G. RIGGS

  	
   

  
	
   

  	
   

  	
        Mel G. Riggs, Senior Vice
  President-Finance

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CWEI ROMERE PASS ACQUISITION CORP.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ MEL G. RIGGS

  	
   

  
	
   

  	
  Name:

  	
  Mel G. Riggs

  	
   

  
	
   

  	
  Title:

  	
  Vice President and Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ROMERE PASS ACQUISITION L.L.C.

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ MEL G. RIGGS

  	
   

  
	
   

  	
  Name:

  	
  Mel G. Riggs

  	
   

  
	
   

  	
  Title:

  	
  Vice President and Treasurer

  	
   

  
						



 

















 


	
   

  	
  BANKS:

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK ONE, NA

  
	
   

  	
  a national banking association

  as a Bank and as Administrative Agent

  (Main Office Chicago)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ WILLIAM MARK CRANMER

  	
   

  
	
   

  	
   

  	
        Wm. Mark Cranmer, Director,
  Capital Markets

  
	
   

  	
   

  	
   

  
	
   

  	
  UNION BANK OF CALIFORNIA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ JOHN CLARK

  	
   

  
	
   

  	
  Name:

  	
  John Clark

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ SEAN MURPHY

  	
   

  
	
   

  	
  Name:

  	
  Sean Murphy

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF SCOTLAND

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ JOSEPH FRATUS

  	
   

  
	
   

  	
  Name:

  	
  Joseph Fratus

  	
   

  
	
   

  	
  Title:

  	
  First Vice President