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EXHIBIT 4.2
FIRST AMENDMENT
TO
FIRST AMENDED, RESTATED, AND COMBINED LOAN AGREEMENT
BY AND BETWEEN CARRIZO OIL & GAS, INC.
AND COMPASS BANK
This First Amendment to the Loan Agreement (this "First Amendment") by
and between CARRIZO OIL & GAS, INC., a Texas corporation (the "Borrower"), and
COMPASS BANK, a Texas chartered bank (the "Bank"), is entered into on this 23rd
day of December 1997 and shall be effective as of that date for all purposes.
W I T N E S S E T H:
Borrower and Bank entered into a First Amended, Restated, and Amended
Loan Agreement dated August 28, 1997 (the "Loan Agreement"). Capitalized terms
used, but not defined, herein shall have the meanings prescribed therefor in the
Loan Agreement.
Borrower has requested that Bank consent to the transaction described
on Exhibit "A" attached to this Third Amendment, and Bank has agreed to do so
according to the terms set forth herein, which shall be incorporated into the
Loan Agreement.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by Borrower and Bank, and each intending
to be legally bound hereby, the parties agree as follows:
I. Specific Amendments to Loan Agreement.
Article I is hereby amended by adding the following definitions
thereto:
"ECT Transaction" means the transaction described on Exhibit
"A" to the First Amendment.
"First Amendment" means the First Amendment to this Agreement
executed by Borrower and Bank on December 23, 1997.
Section 5.19 shall be amended in its entirety, conditioned and
effective upon the closing of the ECT Transaction, to read as follows:
5.19 Tangible Net Worth Requirement. Borrower shall maintain a
total Tangible Net Worth of not less than the greater of: (a)
$50,000,000.00, or (b) the Tangible Net Worth of Borrower as of
December 31, 1997, minus $10,000,000.00; increasing by: (x) fifty
percent (50%) of net income (excluding losses) of Borrower subsequent
to December 31,
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1997, and (y) one hundred percent (100%) of any increases in
shareholders' equity resulting from the sale or issuance of stock in
Borrower subsequent to December 31, 1997. For purposes of this Section,
shareholders' equity shall be deemed to include the consideration paid
to Borrower for its sale of the 300,000 shares of 9% Series A Preferred
Stock, par value $0.01 per share, pursuant to the ECT Transaction, as
well as any consideration paid to Borrower for the exercise of any of
the 1,000,000 warrants that are exercisable for the purchase of
1,000,000 shares of common stock of Carrizo, par value $0.01 per share,
pursuant to the ECT Transaction, but shareholder's equity shall exclude
the value of any such 9% Series A Preferred Stock that is subsequently
redeemed by the issuance of common stock of Borrower.
II. Certain Consents. The Bank has consented, and does hereby consent,
to the ECT Transaction, subject to, and in accordance with, the terms of the
letter agreement between the Bank and Borrower that is attached as Exhibit "A"
to this First Amendment, and Borrower does hereby ratify, adopt, and confirm the
terms and provisions of such letter agreement, which are incorporated herein by
reference, as if set forth in full herein.
III. Reaffirmation of Representations and Warranties. To induce Bank to
enter into this First Amendment, Borrower hereby reaffirms, as of the date
hereof, its representations and warranties contained in Article IV of the Loan
Agreement and in all other documents executed pursuant thereto, and additionally
represents and warrants as follows:
A. The execution and delivery of this First Amendment and the
performance by Borrower of its obligations under this First Amendment
are within Borrower's power, have been duly authorized by all necessary
corporate action, have received all necessary governmental approval (if
any shall be required) , and do not and will not contravene or conflict
with any provision of law or of the charter or by-laws of Borrower or
of any agreement binding upon Borrower.
B. The Loan Agreement as amended by this First Amendment,
represents the legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with its terms, subject as
to enforcement only to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally.
C. No Event of Default or Unmatured Event of Default has
occurred and is continuing as of the date hereof.
IV. Defined Terms. Except as amended hereby, terms used herein that are
defined in the Loan Agreement shall have the same meanings herein.
V. Reaffirmation of Loan Agreement. This First Amendment shall be
deemed to be an amendment to the Loan Agreement, and the Loan Agreement, as
further amended hereby, is hereby ratified, approved and confirmed in each and
every respect. All references to the Loan Agreement
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herein and in any other document, instrument, agreement or writing shall
hereafter be deemed to refer to the Loan Agreement as amended hereby.
VI. Entire Agreement. The Loan Agreement, as hereby further amended,
embodies the entire agreement between Borrower and Bank and supersedes all prior
proposals, agreements and understandings relating to the subject matter hereof.
Borrower certifies that it is relying on no representation, warranty, covenant
or agreement except for those set forth in the Loan Agreement as hereby further
amended and the other documents previously executed or executed of even date
herewith.
VII. Governing Law. THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. This First Amendment has been entered into
in Xxxxxx County, Texas, and it shall be performable for all purposes in Xxxxxx
County, Texas. Courts within the State of Texas shall have jurisdiction over any
and all disputes between Borrower and Bank, whether in law or equity, including,
but not limited to, any and all disputes arising out of or relating to this
First Amendment or any other Loan Document; and venue in any such dispute
whether in federal or state court shall be laid in Xxxxxx County, Texas.
VIII. Severability. Whenever possible each provision of this First
Amendment shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this First Amendment shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this First Amendment.
IX. Execution in Counterparts. Each party hereto acknowledges that this
Agreement may be executed in several counterparts by each party at different.
times and in different locations; that each separate counterpart bearing the
signature of any party may be effectively delivered to the other parties by the
delivery of an electronic facsimile sent via telecopier; that each party so
delivering any such counterpart shall be bound by its facsimile signature
thereon; and that the signature pages from counterparts signed by each party may
be collated into one or more copies of this agreement, which shall constitute
one and the same agreement among all parties hereto.
X. Section Captions. Section captions used in this First Amendment are
for convenience of reference only, and shall not affect the construction of this
First Amendment.
XI. Successors and Assigns. This First Amendment shall be binding upon
Borrower and Bank and their respective successors and assigns, and shall inure
to the benefit of Borrower and Bank, and the respective successors and assigns
of Bank.
XII. Non-Application of Chapter 15 of Texas Credit Codes. The
provisions of Chapter 15 of the Texas Credit Code (Vernon's Texas Civil
Statutes, Article 5069-15) are specifically
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declared by the parties hereto not to be applicable to the Loan Agreement as
hereby further amended or any of the other Loan Documents or to the transactions
contemplated hereby.
XIII. Notice. THIS FIRST AMENDMENT TOGETHER WITH THE LOAN AGREEMENT,
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed as of the day and year first above written.
BANK BORROWER
COMPASS BANK CARRIZO OIL & GAS, INC.
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxx Xxxxx X. Xxxxxx
Vice President Vice President
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EXHIBIT A
[Letterhead of Compass Bank]
January 6, 1998
Xx. Xxxxx X. Xxxxxx
Vice President-Finance
Carrizo Oil & Gas, Inc.
00000 Xx. Xxxx'x Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Re: First Amended, Restated and combined Loan Agreement by and among Carrizo
Oil & Gas, Inc. and Compass Bank dated August 28, 1997 (the "Carrizo Loan
Agreement")
Dear Xxxxx:
Compass Bank ("Compass") understands that Carrizo Oil & Gas, Inc., a Texas
corporation (the "Company"), desires to effect the sale of (i) 300,000 shares of
a newly established series of preferred stock designated as 9% Series A
Preferred Stock, par value $0.01 per share, of the Company (the "Preferred
Stock"), and (ii) 1,000,000 warrants (the "Warrants," and together with the
Preferred Stock, the "Securities") exercisable for the purchase of 1,000,000
shares of the common stock, par value $0.01 per share, of the Company to Enron
Capital & Trade Resources Corp. and Joint Energy Development Investments II
Limited Partnership. Compass further understands that (i) the holders of the
Preferred Stock will be entitled to receive, if, when and as declared by the
Board a f Directors of the Company out of funds legally available therefor,
cumulative dividends at the rate of $9.00 per year on each share of Preferred
Stock, payable quarterly, (ii) additional shares of Preferred Stock may be
issued as payment in kind of such dividends, and (iii) the Preferred Stock is
subject to redemption by the Company at the option of the Company, and at the
option of the holder thereof upon a change of control of the Company, and must
be redeemed upon the occurrence of certain events or on January 8, 2005. A copy
of the Statement of Resolution establishing the terms of the Preferred Stock is
set forth on Annex A hereto.
Compass hereby consents to the issuance of the Securities and waives any
violations of or events of default under the Carrizo Loan Agreement that result
from such issuance. Without limiting the generality of the foregoing
(capitalized terms used but not defined herein have the meaning assigned to them
in the Carrizo Loan Agreement):
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A. Compass hereby agrees that, for the purposes of Section 5.07 of the
Carrizo Loan Agreement, the designation of the Preferred Stock and the
issuance and sale of the Securities do not, and will not upon exercise
of the Warrants, constitute a material adverse change in the condition
of the Company.
B. Compass hereby consents, for the purposes of Section 6.07 of the
Carrizo Loan Agreement, which provides that the Company shall not
declare or pay my dividend or make any distribution on, or purchase or
redeem for value any interest in the Company, to any redemption of the
Preferred Stock by the Company and to any payment of dividends on the
Preferred Stock, that may be made in accordance with the terms of the
Preferred Stock as set forth on Annex A hereto, provided that at the
time of the payment of any such dividend or distribution or the
purchase or redemption of any of the Preferred Stock, no Event of
Default has occurred and is continuing and no Event of Default would
result immediately, or would occur solely upon the giving of notice or
the passage of time or both, as the result of the payment of any such
dividend or distribution or the purchase or redemption of such
Preferred Stock.
All other terms and conditions remain the same.
Very truly yours,
COMPASS BANK
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
Vice President
