SECOND AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT TO CREDIT AGREEMENT (hereinafter referred to as the “Amendment”)
executed to be effective as of September 11, 2007, by and among CARRIZO OIL & GAS, INC., a Texas
corporation (“Borrower”), certain subsidiaries of Borrower, as Guarantors (in such
capacity, “Guarantors”), the LENDERS party hereto (the Lenders”) and JPMORGAN CHASE BANK,
N.A., as Administrative Agent (in its such capacity, “Administrative Agent”). Unless
otherwise expressly defined herein, capitalized terms used but not defined in this Amendment have
the meanings assigned to such terms in the Credit Agreement (as defined below).
WITNESSETH:
WHEREAS, Borrower, Guarantors, Administrative Agent and Lenders have entered into that certain
Credit Agreement, dated as of May 25, 2006 (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”); and
WHEREAS, Borrower has requested that Administrative Agent and Lenders amend the Credit
Agreement to, among other things, (i) permit additional investments and (ii) increase the Borrowing
Base and Conforming Borrowing Base; and
WHEREAS, Administrative Agent and Lenders have agreed to do so on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, Borrower, Administrative Agent and Lenders hereby agree as
follows:
SECTION 1. Amendments to Credit Agreement. Subject to the satisfaction or waiver in writing of
each condition precedent set forth in Section 3 of this Amendment, and in reliance on the
representations, warranties, covenants and agreements contained in this Amendment, the Credit
Agreement shall be amended in the manner provided in this Section 1.
1.1 Additional Definitions. The following definitions shall be and they hereby are added to
Section 1.01 of the Credit Agreement in appropriate alphabetical order:
“Conforming Date” means November 1, 2008.
“Second Amendment Effective Date” means September 11, 2007.
1.2 Amended Definitions. The following definitions in Section 1.01 of the Credit
Agreement shall be and they hereby are amended in their entirety to read as follows:
“Borrowing Base Usage” means, as of any date and for all purposes, the quotient,
expressed as a percentage, of (i) the Aggregate Credit Exposure as of such date, divided by
(ii) the Conforming Borrowing Base as of such date.
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Amendment to Credit Agreement – Page 1
“Conforming Borrowing Base” means, at any time, an amount equal to the amount
determined in accordance with Section 3.01, as the same may be redetermined, adjusted or reduced
from time to time pursuant to Section 3.02, Section 3.03, Section 3.04 and Section 3.05 or as
otherwise adjusted or redetermined pursuant to Section 7.04, provided that (i) in no event
shall the Conforming Borrowing Base exceed the Borrowing Base and (ii) in the event no Conforming
Borrowing Base is designated pursuant to Article III or Section 7.04, the Conforming Borrowing Base
shall be deemed equal to the Borrowing Base.
1.3 Deleted Definition. The defined term “Adjustment Percentage” and the definition thereof
shall be and it hereby is deleted from Section 1.01 of the Credit Agreement.
1.4 Proposed Borrowing Base and Proposed Conforming Borrowing Base. The last sentence of
Section 3.01 of the Credit Agreement shall be and it hereby is amended in its entirety to read as
follows:
Promptly after the receipt by the Administrative Agent of such Reserve Report and Borrower’s
requested amount for the Borrowing Base, the Administrative Agent shall submit to the Lenders a
recommended amount of the Borrowing Base and, with respect to any Redetermination prior to the
Conforming Date, the Conforming Borrowing Base as of the next Redetermination Date; provided that
no Redetermination of the Conforming Borrowing Base shall be required after the Conforming Date.
1.5 Scheduled Redeterminations of the Borrowing Base and Conforming Borrowing Base. The first
sentence of Section 3.02 of the Credit Agreement shall be and it hereby is amended in its entirety
to read as follows:
Based in part on the Reserve Reports made available to the Administrative Agent and the
Lenders pursuant to Section 3.01, the Lenders shall redetermine the Borrowing Base on or prior to
the next Redetermination Date and, if such Redetermination Date is prior to the Conforming Date,
the Conforming Borrowing Base (or such date promptly thereafter as reasonably possible based on the
engineering and other information available to the Lenders).
1.6 Borrowing Base Adjustments. Section 3.05 of the Credit Agreement shall be and it
hereby is amended in its entirety to read as follows:
(a) In the event the Redetermination of the Borrowing Base is not made on or prior to January
1, 2008, as a result of the Borrower failing to comply with the requirements of this ARTICLE III
with respect to such Redetermination on the dates required without giving effect to any grace or
cure period provided in ARTICLE IX with respect to such failure, the Borrowing Base shall be
reduced by $3,000,000 on January 1, 2008 and by $3,000,000 on the first day of each month
thereafter (the “Monthly Reduction”) until the Borrowing Base and Monthly Reduction are
otherwise redetermined pursuant to this Article III.
(b) In the event the outstanding principal balance of the Indebtedness under the Second Lien
Facility exceeds $225,000,000 at any time after the First Amendment Effective Date, the Borrowing
Base then in effect shall be reduced by $1.00 for every $4.00 of such additional Indebtedness as of
the date such additional Indebtedness is incurred.
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Amendment to Credit Agreement – Page 2
1.7 Notice of Redetermination. Section 3.06 of the Credit Agreement shall be and hereby is
amended in its entirety to read as follows:
Section 3.06 Notice of Redetermination. Promptly following any Redetermination of the
Borrowing Base or the Conforming Borrowing Base, the Administrative Agent shall notify the Borrower
of the amount of the redetermined Borrowing Base, Conforming Borrowing Base and Monthly Reduction,
which Borrowing Base, Conforming Borrowing Base and Monthly Reduction shall be effective as of the
date specified in such notice, and such Borrowing Base, Conforming Borrowing Base and Monthly
Reduction shall remain in effect for all purposes of this Agreement until the next Redetermination.
1.8 Investment Basket. Clause (n) of Section 7.05 of the Credit Agreement shall be and it
hereby is amended in its entirety to read as follows:
(n) any other investments in any Person having an aggregate fair market value (measured on the
date each such investment was made and without giving effect to subsequent changes in value), when
taken together with all other investments made pursuant to this clause (n) do not exceed
$30,000,000; provided that not more than $20,000,000 of such investments may be made with
the proceeds of Loans and any such investments made in excess of $20,000,000 must be made with the
proceeds of cash equity offerings of the Borrower after the Second Amendment Effective Date.
1.9 Amendments and Waivers. The first sentence of Section 11.02(b) of the Credit Agreement
shall be and it hereby is amended by replacing “August 1, 2007” with “the Conforming Date”.
1.10 Redetermined Borrowing Base; Conforming Borrowing Base. This Amendment shall constitute
a notice of the redetermination of the Borrowing Base and the Conforming Borrowing Base pursuant to
Section 3.03 of the Credit Agreement and Administrative Agent hereby notifies Borrower
that, as of the Second Amendment Effective Date, the redetermined Borrowing Base is $117,000,000,
and the redetermined Conforming Borrowing Base is $100,000,000.
1.11 Amendment to Schedule. Schedule 2.01 of the Credit Agreement shall be and it
hereby is amended in its entirety by substituting Schedule 2.01 which is attached hereto.
1.12 Consent and Waiver. Notwithstanding anything to the contrary in Section
3.01 or Section 6.01(e) of the Credit Agreement, Administrative Agent and each Lender
hereby consents the extension of the deadline for delivery of the Reserve Report required as of
September 1, 2007 (the “September 2007 Reserve Report”) to November 15, 2007 and the date
of the Scheduled Redetermination to be made based on such Reserve Report to December 1, 2007. As
requested by Borrower, the Lenders hereby waive the Event of Default pursuant to Article IX,
clause (d) or clause (e) of the Credit Agreement arising as a result of Borrower’s failure to
deliver the September 2007 Reserve Report on or before September 1, 2007. The foregoing waiver is
expressly limited as follows: (a) such waiver is limited to the failure to deliver the September
2007 Reserve Report and (b) such waiver is a limited, one-time waiver, and nothing contained herein
shall obligate any Lender to grant any additional or future waiver
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Amendment to Credit Agreement – Page 3
of Sections 3.01 or 6.01(e) of the Credit Agreement for any other Reserve
Report or grant any additional or future waiver of any other provision of the Credit Agreement or
any other Loan Document.
SECTION 2. Assignment of Commitments and Loans. JPMorgan Chase Bank, N.A., as a Lender,
has agreed to assign a portion of its Commitment and the Loans to Guaranty Bank. After such
assignment of the Commitments and the Loans on the date hereof, Guaranty Bank and JPMorgan Chase
Bank, N.A. shall own the Applicable Percentages set forth on Schedule 2.01 of this Amendment. With
respect to such assignment, Guaranty Bank shall be deemed to have acquired the Commitments and
Loans allocated to it from JPMorgan Chase Bank, N.A., as a Lender, pursuant to the terms of the
Assignment and Assumption Agreement attached as “Exhibit A” to the Credit Agreement as if
Guaranty Bank and JPMorgan Chase Bank, N.A., as a Lender, had executed an Assignment and Assumption
Agreement with respect to such allocation. The funds delivered to Administrative Agent by Guaranty
Bank shall be allocated such that after giving effect to such allocation each of the Lenders shall
own the Commitment Percentages set forth on Schedule 2.01 to the Credit Agreement. Borrower and
the Administrative Agent hereby consent to such assignment.
SECTION 3. Conditions. The amendments to the Credit Agreement contained in Section
1 of this Amendment, the consent and waiver contained in Section 1 of this Amendment
and the assignment contained in Section 2 of this Amendment shall be effective upon the
satisfaction of each of the conditions set forth in this Section 3.
3.1 Execution and Delivery. Each Credit Party, each Lender, including Guaranty Bank, and the
Administrative Agent shall have executed and delivered this Amendment.
3.2 No Default. No Default shall have occurred and be continuing or shall result from
effectiveness of this Amendment.
3.3 No Material Adverse Effect. No Material Adverse Effect shall have occurred since December
31, 2006.
3.4 Fees. Borrower shall have paid to the Administrative Agent, for the benefit of the
Lenders, fees payable in the amounts and at the times separately agreed upon between the
Administrative Agent and the Borrower.
3.5 Note. Borrower shall have executed and delivered a promissory note payable to Guaranty
Bank in accordance with Section 2.08(e) of the Credit Agreement.
3.6 Other Documents. The Administrative Agent shall have received such other instruments and
documents incidental and appropriate to the transaction provided for herein as the Administrative
Agent or its special counsel may reasonably request, and all such documents shall be in form and
substance satisfactory to the Administrative Agent.
SECTION 4. Representations and Warranties of Borrower. To induce the Lenders to enter into
this Amendment, the Borrower hereby represents and warrants to the Lenders as follows:
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Amendment to Credit Agreement – Page 4
4.1 Reaffirmation of Representations and Warranties/Further Assurances. After giving effect
to the amendments herein, each representation and warranty of the Borrower contained in the Credit
Agreement or in any of the other Loan Documents is true and correct in all material respects as of
the Second Amendment Effective Date (except to the extent such representations and warranties
specifically refer to an earlier date).
4.2 Corporate Authority; No Conflicts. The execution, delivery and performance by the
Borrower (to the extent a party hereto or thereto) of this Amendment and all documents, instruments
and agreements contemplated herein are within Borrower’ corporate or other organizational powers,
have been duly authorized by necessary action, require no action by or in respect of, or filing
with, any court or agency of government and do not violate or constitute a default under any
provision of any applicable law or other agreements binding upon Borrower or result in the creation
or imposition of any Lien upon any of the assets of Borrower except for Permitted Liens and
otherwise as permitted in the Credit Agreement.
4.3 Enforceability. This Amendment constitutes the valid and binding obligation of Borrower
enforceable in accordance with its terms, except as (i) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditor’s rights generally, and (ii) the
availability of equitable remedies may be limited by equitable principles of general application.
SECTION 5. Miscellaneous.
5.1 Reaffirmation of Loan Documents and Liens. Any and all of the terms and provisions of the
Credit Agreement and the Loan Documents shall, except as amended and modified hereby, remain in
full force and effect. Borrower hereby agrees that the amendments and modifications herein
contained shall in no manner affect or impair the liabilities, duties and obligations of Borrower
under the Credit Agreement and the other Loan Documents or the Liens securing the payment and
performance thereof.
5.2 Parties in Interest. All of the terms and provisions of this Amendment shall bind and
inure to the benefit of the parties hereto and their respective successors and assigns.
5.3 Legal Expenses. Borrower hereby agrees to pay all reasonable fees and expenses of special
counsel to the Administrative Agent incurred by the Administrative Agent in connection with the
preparation, negotiation and execution of this Amendment and all related documents.
5.4 Counterparts. This Amendment may be executed in one or more counterparts and by different
parties hereto in separate counterparts each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to the same document.
However, this Amendment shall bind no party until Borrower, the Lenders, and the Administrative
Agent have executed a counterpart. Delivery of photocopies of the signature pages to this
Amendment by facsimile or electronic mail shall be effective as delivery of manually executed
counterparts of this Amendment.
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Amendment to Credit Agreement – Page 5
5.5 Complete Agreement. THIS AMENDMENT, THE CREDIT AGREEMENT, AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
5.6 Headings. The headings, captions and arrangements used in this Amendment are, unless
specified otherwise, for convenience only and shall not be deemed to limit, amplify or modify the
terms of this Amendment, nor affect the meaning thereof.
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Amendment to Credit Agreement – Page 6
IN WITNESS WHEREOF, the parties have caused the Second Amendment to Credit Agreement to be
duly executed by their respective authorized officers to be effective as of the date first above
written.
| BORROWER: | ||||||
| CARRIZO OIL & GAS, INC. | ||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||
| Name: Xxxx X. Xxxxxx | ||||||
| Title: Vice President and Chief Financial Officer | ||||||
| GUARANTORS: | ||||||
| CCBM, INC. | ||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||
| Name: Xxxx X. Xxxxxx | ||||||
| Title: Vice President | ||||||
| CLLR, INC. | ||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||
| Name: Xxxx X. Xxxxxx | ||||||
| Title: Vice President | ||||||
| ADMINISTRATIVE AGENT AND LENDER: | ||||||
| JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, individually and as Administrative Agent | ||||||
| By: | /s/ Xxxxxxxx X. Coil | |||||
| Name: | Xxxxxxxx X. Coil | |||||
| Title: | Vice President | |||||
Second Amendment to Credit Agreement
Signature Page
| GUARANTY BANK | ||||||
| as a Lender | ||||||
| By: | /s/ Xxxxx X. Xxxxxx III | |||||
| Name: | Xxxxx X. Xxxxxx III | |||||
| Title: | Senior Vice President | |||||
Second Amendment to Credit Agreement
Signature Page
SCHEDULE 2.01
Applicable Percentages And Commitments
Applicable Percentages And Commitments
| Applicable | Maximum | |||||||||||||||
| Lender | Title | Percentage | Commitment1 | Facility Amount | ||||||||||||
JPMorgan Chase Bank, |
Administrative Agent | 55.555556 | % | $ | 65,000,000 | $ | 111,111,112 | |||||||||
National Association 10 SouthDearborn, Fl 7 Mail Code IL1-0010 Xxxxxxx, Xxxxxxxx 00000-0000 Attention: Xxxxxxx Xxxxxxx Telephone: (000) 000-0000 Facsimile: (000) 000-0000 xxxxxxx.x.xxxxxxx@xxxxxxxx.xxx |
||||||||||||||||
With a copy to: JPMorgan Chase Bank, N.A. 000 Xxxx Xxxxxx 0xx Xxxxx, Xxxxx Xxxxxxx, Xxxxx 00000 Attention: Jo Xxxxx Xxxxxxxxx Telephone: (000) 000-0000 Facsimile: (000) 000-0000 xx.x.xxxxxxxxx@xxxxxxxx.xxx |
||||||||||||||||
Guaranty Bank |
44.444444 | % | $ | 52,000,000 | $ | 88,888,888 | ||||||||||
000 Xxxx Xxxxxx Xxxxx 0000 Xxxxxxx, XX 00000 Attention: Xxxxx X. Xxxxxx III Telephone: (000) 000-0000 Facsimile: (000) 000-0000 xxxxx.xxxxxx@xxxxxxxxxxxx.xxx |
||||||||||||||||
TOTAL |
100.00000 | % | $ | 117,000,000 | $ | 200,000,000 | ||||||||||
| 1 | As of the Second Amendment Effective Date and subject to adjustment as a result of changes in the Borrowing Base. |
Second Amendment to Credit Agreement
