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EXHIBIT 4.5
FOURTH AMENDMENT
TO
FIRST AMENDED, RESTATED, AND COMBINED LOAN AGREEMENT
BY AND BETWEEN CARRIZO OIL & GAS, INC.
AND COMPASS BANK
This Fourth Amendment to the Loan Agreement (this "Fourth 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
24th day of September 1998, 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, as amended by the First Amendment thereto
dated December 23, 1997, the Second Amendment thereto dated December 30, 1997
and the Third Amendment thereto dated July 30, 1998 (collectively, 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 provide a term loan to Borrower in the
amount of $7,000,000.00, 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 of the Loan Agreement is hereby amended by revising the
following defined terms in their entirety to read as follows:
"Floating Rate" means: (a) with respect to the Revolving Loan
evidenced by the Note, the Index Rate in effect from time, and (b) with
respect to the Second Term Loan evidenced by the Second Term Note, the
Index Rate in effect from time to time plus two percent (2.00%).
"Notes" means, collectively, the Note, Term Note, and the
Second Term Note and any extension, renewal, rearrangement of, or
substitute for either of such Notes. All references to the defined
term, "Note," throughout this Agreement, as it existed prior to the
Second Amendment, shall be construed to refer to all three of the
Notes, with the exception of the references to the term, "Note," in the
definitions of Floating Rate, Loan Excess, and
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Note, and in Sections 2.01 through 2.03, 2.08, 2.09, 3.01, 3.04 and
Exhibit "B" of the Loan Agreement, all of which shall remain singular
and shall be construed to refer to the Note evidencing the Revolving
Loan.
Article I of the Loan Agreement is hereby amended by adding the
following definitions thereto:
"Borrower?s Additional Stock" has the meaning set forth in
Section 2.25.
"Convertible Subordinated Debt? has the meaning set forth in
Section 2.25.
"Fourth Amendment" means the Fourth Amendment to this
Agreement executed by Borrower and Bank on September 24, 1998.
"Second Term Loan" means that certain $7,000,000.00 term loan
made or to be made by Bank to Borrower pursuant to Section 2.22 hereof.
"Second Term Loan Maturity Date" means the earlier of: (1) the
date of closing of the issuance of Borrower's Additional Stock; (2) the
date of closing of the issuance of the Convertible Subordinate Debt;
(3) the date of repayment of the Revolving Loan; and (4) September 29,
1999.
"Second Term Note" means the promissory note in the original
face amount of $7,000,000.00 dated of even date herewith, made by
Borrower payable to the order of Bank, in substantially the form
attached to the Fourth Amendment as Exhibit "A," together with all
deferrals, renewals, extensions, amendments, modifications or
rearrangements thereof, which promissory note shall evidence the
advances to Borrower by Bank pursuant to Section 2.22 hereof.
Article II of the Loan Agreement is hereby amended by adding the
following sections thereto:
2.22 Second Term Loan. Subject to the terms and conditions and
relying on the representations and warranties contained in this
Agreement, Bank agrees to advance a minimum of $3,500,000 of the Second
Term Loan at the closing of the Fourth Amendment. Upon written request
from Borrower and provided that no Event of Default or Unmatured Event
of Default has occurred and is continuing and provided further that no
Event of Default or Unmatured Event of Default would result from such
advance, Bank agrees to advance the remaining balance of the Term Loan
to Borrower in a single advance prior to December 31, 1998.
2.23 Second Term Note. The obligation of Borrower to repay the
Second Term Loan shall be evidenced by the Second Term Note.
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2.24 Repayment of Second Term Loan. Interest on the Second
Term Note, calculated as aforesaid in Section 2.04, shall be repaid by
Borrower in monthly installments on the first day of each month
following the advance from Bank to Borrower pursuant to Section 2.22,
through and including the Second Term Loan Maturity Date, when the
entire unpaid balance of the Second Term Note, inclusive of principal
and interest, shall be paid in full.
2.25 Voluntary Prepayment of the Second Term Note. Borrower
shall have the right and option to prepay, at any time subject to the
contemporaneous payment of the prepayment fee prescribed below, the
entire balance outstanding on the Second Term Note, together with all
accrued, unpaid interest. No partial prepayments shall be permitted. If
Borrower prepays the indebtedness evidenced by the Second Term Note
prior to the Second Term Loan Maturity Date from a source other than
proceeds raised by Borrower from its issuance of convertible
subordinated debt (the "Convertible Subordinated Debt") or additional
equity of Borrower ("Borrower's Additional Stock") or from proceeds
drawn under the Revolving Loan, then as consideration for and as a
condition to such prepayment privilege, Borrower shall simultaneously
pay Bank a fee in the amount of $70,000.00.
Article III of the Loan Agreement is hereby amended by adding the
following Section 3.18.
3.18 Conditions Precedent in Connection With the Fourth
Amendment. The obligation of Bank to make the Second Term Loan referred
to in Section 2.22 of this Agreement is subject to satisfaction of the
following conditions precedent:
(a) Receipt of Second Term Note, Fourth Amendment and
Certificate of Compliance. Bank shall have received the Second Term
Note, multiple counterparts of the Fourth Amendment, as requested by
Bank, and the Certificate of Compliance duly executed by an authorized
officer for Borrower.
(b) Receipt of Certified Copy of Corporate Proceedings and
Certificate of Incumbency. Bank shall have received from Borrower
copies of the resolutions of its board of directors authorizing the
transactions set forth in the Fourth Amendment and the execution of the
Fourth Amendment and the Second Term Note, such copy or copies to be
certified by the secretary or an assistant secretary as being true and
correct and in full force and effect as of the date of such
certificate. In addition, Bank shall have received from Borrower a
certificate of incumbency signed by the secretary or an assistant
secretary setting forth (a) the names of the officers executing the
Fourth Amendment and the Second Term Note, (b) the office(s) to which
such Persons have been elected and in which they presently serve and
(c) an original specimen signature of each such person.
(c) Accuracy of Representations and Warranties and No Event of
Default. The representations and warranties contained in Article IV of
the Loan Agreement shall be true and correct in all material respects
on the date of the making of such Second Term Loan with the same effect
as though such representations and warranties had been made on such
date;
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and no Event of Default shall have occurred and be continuing or will
have occurred at the completion of the making of such Loan.
(d) Legal Matters Satisfactory to Special Counsel to Bank. All
legal matters incident to the consummation of the transactions
contemplated by the Fourth Amendment shall be satisfactory to the firm
of Porter & Hedges, L.L.P., special counsel for Bank.
(e) No Material Adverse Change. No material adverse change
shall have occurred since the date of this Agreement in the condition,
financial or otherwise, of Borrower.
(f) Facility Fee. Bank shall have received the Facility Fee in
the amount of $100,000.00 prior to or at closing of the Fourth
Amendment.
II. Reaffirmation of Representations and Warranties. To induce Bank to
enter into this Fourth 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 Fourth Amendment and the
performance by Borrower of its obligations under this Fourth 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 Fourth 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.
III Defined Terms. Except as amended hereby, terms used herein that are
defined in the Loan Agreement shall have the same meanings herein.
IV Reaffirmation of Loan Agreement. This Fourth 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 herein and in any other
document, instrument, agreement or writing shall hereafter be deemed to refer to
the Loan Agreement as amended hereby.
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V 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.
VI Governing Law. THIS FOURTH 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 Fourth Amendment has been entered
into in Harris County, Texas, and it shall be performable for all purposes in
Harris 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 Fourth Amendment or any other Loan Document; and venue in any such
dispute whether in federal or state court shall be laid in Harris County, Texas.
VII Severability. Whenever possible each provision of this Fourth
Amendment shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Fourth 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
Fourth Amendment.
VIII 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.
IX Section Captions. Section captions used in this Fourth Amendment are
for convenience of reference only, and shall not affect the construction of this
Fourth Amendment.
X Successors and Assigns. This Fourth 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.
XI Non-Application of Chapter 346 of Texas Finance Codes. In no event
shall Chapter 346 of the Texas Finance Code (which regulates certain revolving
loan accounts and revolving tri-party accounts) apply to this Loan Agreement as
hereby further amended or any other Loan Documents or the transactions
contemplated hereby.
XII Notice. THIS FOURTH AMENDMENT TOGETHER WITH THE LOAN AGREEMENT, AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
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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.
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IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be duly executed as of the day and year first above written.
BANK BORROWER
COMPASS BANK CARRIZO OIL & GAS, INC.
By:___________________________ By:_____________________________
Kathleen J. Bowen Frank A. Wojtek
Vice President Vice President
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EXHIBIT "A"
NOTE
$7,000,000.00 Houston, Texas September 24, 1998
On the dates hereinafter prescribed, for value received, CARRIZO OIL &
GAS, INC., a Texas corporation (the "Borrower"), having an address at 14811 St.
Mary's Lane, Suite 148, Houston, Texas 77079, promises to pay to the order of
COMPASS BANK (herein called "Bank"), at its principal offices at 24 Greenway
Plaza, Fourteenth Floor, Houston, Harris County, Texas 77046, (i) the principal
amount of SEVEN MILLION AND NO/100 DOLLARS ($7,000,000.00), and (ii) interest on
the principal balance remaining unpaid from the date of the advance until
maturity at a rate of interest equal to lesser of (a) the "Floating Rate" (as
hereinafter defined), calculated on the basis of a year of 365 or 366 days, as
the case may be, and for the actual number of days elapsed (including the first
day but excluding the last day), or (b) the ?Maximum Rate? (as hereinafter
defined). Any increase or decrease in interest rate resulting from a change in
the Maximum Rate shall be effective immediately when such change becomes
effective, without notice to Borrower, unless Applicable Law (as defined below)
requires that such increase or decrease not be effective until a later time, in
which event such increase or decrease shall be effective at the earliest time
permitted under the provisions of such law.
Notwithstanding the foregoing, if during any period the Floating Rate
exceeds the Maximum Rate, the rate of interest in effect on this Note shall be
limited to the Maximum Rate during each such period, but at all times thereafter
the rate of interest in effect on this Note shall be the Maximum Rate until the
total amount of interest accrued on this Note equals the total amount of
interest which would have accrued hereon if the Floating Rate had at all times
been in effect.
All payments on this Note shall be applied first to accrued interest
and the balance, if any, to principal.
"Floating Rate" means a per annum interest rate equal to the Index Rate
(as defined below) in effect from time to time plus two percent (2.0%), provided
that at such time no Event of Default or Unmatured Event of Default (as defined
in the First Amended, Restated, and Amended Loan Agreement dated August 28,
1997, as amended by the First Amendment thereto dated December 23, 1997, the
Second Amendment thereto dated December 30, 1997, the Third Amendment dated July
30, 1998 and the Fourth Amendment dated of even date herewith, between Borrower
and Bank (the "Loan Agreement")) has occurred and is continuing; then
thereafter, "Floating Rate" shall mean a per annum interest rate equal to the
Index Rate in effect from time to time plus five percent (5%).
"Index Rate" means at any time, the prime rate established in The Wall
Street Journal's "Money Rates" or similar table. If multiple prime rates are
quoted in the table, then the highest prime rate will be the Index Rate. In the
event that the prime rate is no longer published by The Wall
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Street Journal in the "Money Rates" or similar table, then Bank may select an
alternative published index based upon comparable information as a substitute
Index Rate. Upon the selection of a substitute Index Rate, the applicable
interest rate shall thereafter vary in relation to the substitute index. Such
substitute index shall be the same index that is generally used as a substitute
by Bank on all Index Rate loans. The Index Rate is eight and one-half percent
(8.50%) as of the date of this Agreement.
"Maximum Rate" means the Maximum Rate of non-usurious interest
permitted from day to day by Applicable Law.
"Applicable Law" means that law in effect from time to time and
applicable to this Term Note which lawfully permits the charging and collection
of the highest permissible lawful, non-usurious rate of interest on this Term
Note. To the extent federal law permits Lender to contract for, charge or
receive a greater amount of interest, Lender will rely on federal law instead of
the Texas Finance Code, as supplemented by Texas Credit Title, for the purpose
of determining the Maximum Rate. Additionally, to the maximum extent permitted
by applicable law now or hereafter in effect, Lender may, at its option and from
time to time, implement any other method of computing the Maximum Rate under the
Texas Finance Code, as supplemented by Texas Credit Title, or under other
applicable law, by giving notice, if required, to Borrower as provided by
applicable law now or hereafter in effect. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, it is not the
intention of Lender to accelerate the maturity of any interest that has not
accrued at the time of such acceleration or to collect unearned interest at the
time of such acceleration.
"Business Day" shall mean any day on which banks are open for general
banking business in the State of Texas, other than a Saturday, a Sunday, a legal
holiday or any other day on which banks in the State of Texas are required or
authorized by law or executive order to close.
The principal sum and any accrued but unpaid interest of this Note
shall be due and payable on or before the earlier of: (1) the date of closing of
the issuance of Borrower's Additional Stock, as defined in the Loan Agreement;
(2) the date of closing of the issuance of the Convertible Subordinate Debt, as
defined in the Loan Agreement; (3) the date of repayment of the Revolving Loan;
and (4) September 29, 1999; interest to accrue upon the principal sum from time
to time owing and unpaid hereunder shall be due and payable in monthly
installments, as it accrues, with the first such monthly installment of interest
hereon being due and payable on the first day of November 1998, and with such
subsequent installments of interest being due and payable on the first day of
each succeeding month thereafter; provided, however, the final installment of
interest hereunder shall be due and payable not later than the maturity of the
principal sum hereof, howsoever such maturity may be brought about.
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When the first (1st) day of a calendar month falls upon a Saturday,
Sunday or legal holiday, the payment of interest and principal, if any, due upon
such date shall be due and payable upon the next succeeding Business Day.
In no event shall the aggregate of the interest on this Note, plus any
other amounts paid in connection with the loan evidenced by this Note which
would under Applicable Law be deemed "interest," ever exceed the maximum amount
of interest which, under Applicable Law, could be lawfully charged on this Note.
Bank and Borrower specifically intend and agree to limit contractually the
interest payable on this Note to not more than an amount determined at the
Maximum Rate. Therefore, none of the terms of this Note or any other instruments
pertaining to or securing this Note shall ever be construed to create a contract
to pay interest at a rate in excess of the Maximum Rate, and neither Borrower
nor any other party liable herefor shall ever be liable for interest in excess
of that determined at the Maximum Rate, and the provisions of this paragraph
shall control over all provisions of this Note or of any other instruments
pertaining to or securing this Note. If any amount of interest taken or received
by Bank shall be in excess of the maximum amount of interest which, under
Applicable Law, could lawfully have been collected on this Note, then the excess
shall be deemed to have been the result of a mathematical error by the parties
hereto and shall be refunded promptly to Borrower. All amounts paid or agreed to
be paid in connection with the indebtedness evidenced by this Note which would
under Applicable Law be deemed "Interest" shall, to the extent permitted by
Applicable Law, be amortized, prorated, allocated and spread throughout the full
term of this Note.
This Note is secured by all security agreements, collateral
assignments, mortgages and lien instruments executed by Borrower (or by any
other party) in favor of Bank, including those executed simultaneously herewith,
those executed heretofore and those hereafter executed, and including
specifically and without limitation the "Security Instruments" described and
defined in the Loan Agreement.
This Note is the Second Term Note issued pursuant to the Fourth
Amendment to the Loan Agreement. Reference is hereby made to the Loan Agreement
for a statement of the rights and obligations of the holder of this Note and the
duties and obligations of Borrower in relation thereto; but neither this
reference to the Loan Agreement nor any provisions thereof shall affect or
impair the absolute and unconditional obligation of Borrower to pay any
outstanding and unpaid principal of and interest on this Note when due, in
accordance with the terms of the Loan Agreement.
In the event of default in the payment when due of any of the principal
of or any interest on this Note, or in the event of default under the terms of
the Loan Agreement or any of the Security Instruments, or if any event occurs or
condition exists which authorizes the acceleration of the maturity of this Note
under any agreement made by Borrower, Bank (or other holder of this Note) may,
at its option, without presentment or demand or any notice to Borrower or any
other person liable herefor, declare the unpaid principal balance of and accrued
interest on this Note to be immediately due and payable.
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If this Note is collected by suit or through the Probate or Bankruptcy
Court, or any judicial proceeding, or if this Note is not paid at maturity,
however such maturity may be brought about, and is placed in the hands of an
attorney for collection, then Borrower agrees to pay reasonable attorneys' fees,
not to exceed 10% of the full amount of principal and interest owing hereon at
the time this Note is placed in the hands of an attorney.
Borrower and all sureties, endorsers and guarantors of this Note waive
demand, presentment for payment, notice of nonpayment, protest, notice of
protest, notice of intent to accelerate maturity, notice of acceleration of
maturity, and all other notices, filing of suit and diligence in collecting this
Note or enforcing any of the security herefor, and agree to any substitution,
exchange or release of any such security or the release of any party primarily
or secondarily liable hereon and further agrees that it will not be necessary
for Bank, in order to enforce payment of this Note by them, to first institute
suit or exhaust its remedies against any Borrower or others liable herefor, or
to enforce its rights against any security herefor, and consent to any one or
more extensions or postponements of time of payment of this Note on any terms or
any other indulgences with respect hereto, without notice thereof to any of
them. Bank may transfer this Note, and the rights and privileges of Bank under
this Note shall inure to the benefit of Bank's representatives, successors or
assigns.
Executed this 24th day of September 1998.
CARRIZO OIL & GAS, INC.
By:
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Frank A. Wojtek
Vice President
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COMPLIANCE CERTIFICATE
I, Frank A. Wojtek, Vice President of CARRIZO OIL & GAS, INC. (the
"Company"), pursuant to Section 3.18 of the First Amended, Restated, and
Combined Loan Agreement dated as of August 28, 1997, as amended, by and among
COMPASS BANK ("Bank") and the Company (the "Agreement") do hereby certify, as of
the date hereof, that to my knowledge:
1. No Event of Default (as defined in the Agreement) has occurred
and is continuing, and no Unmatured Event of Default (as
defined in the Agreement) has occurred and is continuing;
2. No material adverse change has occurred in the business
prospects, financial condition, or the results of operations
of the Company since the date of the previous Financial
Statements (as defined in the Agreement) provided to Bank;
3. Each of the representations and warranties of the Company
contained in Article IV of the Agreement is true and correct
in all respects.
This certificate is executed this 24th day of September 1998.
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Frank A. Wojtek