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EXHIBIT 99.1
CARRIZO OIL & GAS, INC.
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FIRST AMENDMENT
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DATED AS OF JUNE 7, 2004
TO
SECURITIES PURCHASE AGREEMENT
DATED AS OF DECEMBER 15, 1999
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FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT
THIS FIRST AMENDMENT dated as of June 7, 2004 to the Securities
Purchase Agreement dated as of December 15, 1999 is between Carrizo Oil & Gas,
Inc., a Texas corporation (the "Company") and the Investors listed on the
signature pages hereto (collectively, the "Investors").
RECITALS:
A. The Company and the initial investors thereunder (the "Initial
Investors") have heretofore entered into the Securities Purchase Agreement dated
as of December 15, 1999 (as modified pursuant to that certain Agreement and
Waiver dated as of February 20, 2002, the "Securities Purchase Agreement").
Capitalized terms used herein and not defined herein shall have the meanings
ascribed to such terms in the Securities Purchase Agreement.
B. The Company and the Investors now desire to amend the Securities
Purchase Agreement in the respects, but only in the respects, hereinafter set
forth.
C. Immediately prior to the effectiveness hereof, the Initial Investors
have sold all of their interests in the Notes issued pursuant to the Securities
Purchase Agreement held by such Initial Investors to Steelhead Investments Ltd.
(the "Noteholder").
NOW, THEREFORE, the Company and the Investors, in consideration of good
and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, do hereby agree as follows:
Section 1. Amendments. The Securities Purchase Agreement is hereby
amended as follows:
1. Section 1.1 of the Securities Purchase Agreement is hereby
amended as follows:
1.1. The definition of "Applicable Prepayment
Premium" is hereby deleted and replaced in its entirety by the
following:
"Applicable Prepayment Premium" means, at any date of
determination in connection with a prepayment of the
Notes in accordance with Sections 3.5 and 3.6 hereof
during any period set forth below, an amount equal to
the amount set forth below opposite such period:
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Prepayment Rate During the Period % of Principal Being Paid
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June 1, 2004 to and including the fifth anniversary
of the Closing Date 5%
After the fifth anniversary of the Closing Date to
and including the sixth anniversary of the Closing
Date 2%
After the sixth anniversary of the Closing Date to
and including the seventh anniversary of the
Closing Date 2%
After the seventh anniversary of the Closing Date to
and including the eighth anniversary of the
Closing Date 1%
At anytime after the eighth anniversary of the
Closing Date 0%
1.2. The definition of "Final Maturity Date" is
hereby amended by deleting therefrom the date "2007" and
inserting therein the date "2008."
1.3. The definition of "Tangible Net Worth" is hereby
amended by inserting the phrase "and excluding the effect of
any cumulative after-tax amounts of ceiling test write-downs
(not to exceed an aggregate of $30 million) incurred
subsequent to December 31, 2001 pursuant to Rule 4.10 of
Regulation S-X promulgated by the Securities and Exchange
Commission" immediately before the "." at the end of the
sentence.
1.4. Inserting in proper alphabetical order the
following new definitions:
"PROJECT FINANCE DEBT" means Indebtedness incurred to
finance or refinance the acquisition, construction,
installation, design, engineering, development, completion,
maintenance, operation, securitization, monetization or
improvement of Property (including the cost of exploration and
development of oil and gas property and the marketing and
transportation of oil and gas) and related activities, which
is non-recourse to the Company and its Subsidiaries, other
than a Special Purpose Subsidiary (other than the assets for
which such Project Finance Debt was incurred, the proceeds
(including, without limitation, proceeds from associated
contracts and insurances) of, and improvements, accessories
and upgrades to, such assets and the equity and Indebtedness
of any Special Purpose Subsidiary that owns, whether directly
or indirectly, such assets) provided however, that (x) support
such as limited guaranties or obligations to provide or
guaranty equity contributions or to make subordinated loans
and (y) customary exceptions to non-recourse
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provisions typical in non-recourse financings shall not be
considered direct recourse for the purpose of this definition.
"SPECIAL PURPOSE SUBSIDIARY" means any Subsidiary of
the Company whose principal purpose is to incur Project
Finance Debt or to become a direct or indirect owner of
interests in a Person created to conduct the business
activities for which such Project Finance Debt was incurred,
and substantially all the fixed assets of which Subsidiary or
Person are (x) those fixed assets being financed (or to be
financed) in whole or in part by such Project Finance Debt or
(y) the equity in, Indebtedness or other obligations of, one
or more other such Subsidiaries or Persons.
2. Section 3.3(a) of the Securities Purchase Agreement is
hereby deleted and replaced in its entirety with the following:
"Interest shall be payable on the principal amount of
the Notes, and to the maximum extent permitted by
Applicable Law on any increase thereof as provided
below, at a fixed rate per annum equal to 9% (or 10%
with respect to interest the Company elects to defer
after the sixth anniversary of the Closing Date) (as
applicable, the "STATED RATE"). Notwithstanding the
foregoing, in connection with any Interest Payment
Date occurring on or before the seventh anniversary
of the Closing Date, the Company may elect to defer a
portion of the interest owing on such Interest
Payment Date provided that (i) no Default or Event of
Default has occurred and is continuing, and (ii) the
Company gives the Investors written notice of such
election prior to the commencement of the related
Interest Period, which notice shall include the
amount of interest the Company elects to defer on
such Interest Payment Date; and provided further that
the maximum amount of interest the Company may elect
to defer on any Interest Payment Date shall be an
amount equal to 60% of the interest accrued on the
Notes during such Interest Period; and provided
further that after the sixth anniversary of the
Closing Date any interest the Company may elect to
defer shall be calculated at a rate per annum equal
to 10%. If the Company elects to defer a portion of
the interest due on any Interest Payment Date (such
amount being hereinafter referred to as the "DEFERRED
INTEREST AMOUNT"), then the aggregate principal
amount of the Notes shall be automatically deemed to
be increased by an amount equal to the Deferred
Interest Amount owing on such Interest Payment Date."
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3. Section 7.8 of the Securities Purchase Agreement is hereby
amended by inserting after the second instance of the term "Subsidiary"
in the third line thereof the phrase "(other than any Project Finance
Subsidiary)."
4. Section 8.1 of the Securities Purchase Agreement is hereby
amended by inserting therein the following new subsection (m):
"(m) Project Finance Debt."
5. Section 8.2 of the Securities Purchase Agreement is hereby
amended by inserting therein the following new subsection (r):
"(r) Liens to secure Project Finance Debt."
6. Section 8.5(b) of the Securities Purchase Agreement is
hereby amended by inserting the following sentence at the end thereof:
"This Section 8.5(b) shall not apply to agreements
evidencing or securing Project Finance Debt of a Special
Purpose Subsidiary."
7. Section 8.12 of the Securities Purchase Agreement is hereby
amended by deleting therefrom the phrase "and at least one CB Capital
Director votes in favor of such approval."
8. Section 8 of the Securities Purchase Agreement is hereby
amended by inserting therein the following new section 8.14:
"8.14 MAXIMUM LEVERAGE.
Permit the ratio of Total Debt as of the end of any
fiscal quarter to EBITDA for the twelve month period
ending as of such fiscal quarter to exceed 3.50 to
1.00."
Section 2. Miscellaneous.
This First Amendment shall be construed in connection with and
as part of the Securities Purchase Agreement, and except as modified and
expressly amended by this amendment, all terms, conditions and covenants
contained in the Securities Purchase Agreement and the Notes are hereby ratified
and shall be and remain in full force and effect. Any and all notices, requests,
certificates and other instruments executed and delivered after the execution
and delivery of this amendment may refer to the Securities Purchase Agreement
without making specific reference to this amendment but nevertheless all such
references shall be deemed to include this amendment unless the context
otherwise requires. This First Amendment shall b governed by and construed in
accordance with New York law. The Company represents and warrants that the
Investors are the record holders of 100% of the notes issued pursuant to the
Securities Purchase
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Agreement and that this First Amendment complies with the requirements of
Section 12.8 thereof.
Section 3. Amendment Fee.
As a condition precedent to the effectiveness hereof, the
Company shall pay to the Noteholder an amendment fee equal to 1.5% of the
principal amount (as increased due to interest deferred under Section 3.3 of the
Securities Purchase Agreement) of the Notes held by the Noteholder as of the
date hereof.
Section 4. Additional Fees.
4.1. If at any time the Company elects to defer
interest pursuant to Section 3.3 of the Securities Purchase
Agreement with respect to one or more Interest Periods after
the sixth anniversary of the Closing Date, the Company shall
pay to the Noteholder a one-time fee equal to 0.5% of the
outstanding principal amount (measured as of the date of the
beginning of the first Interest Period so deferred and as
increased due to interest deferred under Section 3.3 of the
Securities Purchase Agreement) of the Notes then held by the
Noteholder.
4.2. If the Company prepays the Notes prior to the
sixth anniversary of the Closing Date, the Company, in
addition to the Applicable Prepayment Premium, shall pay to
the Noteholder a fee equal to 0.5% of the then outstanding
principal amount (as increased due to interest deferred under
Section 3.3 of the Securities Purchase Agreement) of the Notes
then held by the Noteholder. Payment of such one-time fee
shall be made only at the beginning of the first Interest
Period as to which interest is so deferred.
Section 5. Issuance of Revised Note.
Simultaneously with the execution and delivery hereof, the
Company shall issue to the Noteholder a new Note evidencing the amended Final
Maturity Date in exchange for the return and cancellation of all other
outstanding Notes.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Company and the Investors have caused
this instrument to be executed, all as of the day and year first above written.
COMPANY
CARRIZO OIL & GAS, INC.
By: /s/ Paul F. Boling
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Name: Paul F. Boling
Title: Chief Financial Officer,
Vice President, Secretary
and Treasurer
[INVESTORS SIGNATURE PAGES ON THE FOLLOWING PAGES]
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT]
INVESTOR
STEELHEAD INVESTMENTS LTD.
By: HBK Investments L.P.
Title: Investment Advisor
By: /s/ Kevin O'Neal
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Name: Kevin O'Neal
Title: Authorized Signatory
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT]
INVESTOR
/s/ Douglas A.P. Hamilton
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Douglas A.P. Hamilton
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT]
INVESTOR
/s/ Paul B. Loyd, Jr.
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Paul B. Loyd, Jr.
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT]
INVESTOR
/s/ Steven A. Webster
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Steven A. Webster
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT]
INVESTOR
MELLON VENTURES, L.P.
By: MVMA, L.P., its General Partner
MVMA, Inc., its General Partner
By: /s/ Ronald J. Coombs
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Name: Ronald J. Coombs
Title: Chief Financial Officer
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT]