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EXHIBIT 4.1
FIFTH AMENDMENT
TO
FIRST AMENDED, RESTATED, AND COMBINED LOAN AGREEMENT
BY AND BETWEEN CARRIZO OIL & GAS, INC.
AND COMPASS BANK
This Fifth Amendment to the Loan Agreement (this "Fifth 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 effective on
the 22nd day of March 1999, 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 Combined
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 thereto dated July 30, 1998 and the Fourth Amendment thereto
dated September 24, 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 increase the existing term loan to
Borrower by $2,000,000.00 up to a principal amount of $9,000,000.00, extend the
maturity date of the term loan and modify the Borrowing Base supporting the
Revolving Loan, 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:
"Borrowing Base Properties" means the Borrowing Base Oil and
Gas Properties, the Borrowing Base Cash, and the Borrowing Base
Securities.
"Cash Equivalent" means certificates of deposit issued by the
Bank, other certificates of deposit approved by the Bank in its sole
discretion and Collateral Letters of Credit
"Notes" means, collectively, the Note and the Second Term Note
and any extension, renewal, rearrangement of, or substitute for either
of such Notes. All references to the
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defined term, "Note," throughout this Agreement, as it existed prior to
the Second Amendment, shall be construed to refer to both of the Notes,
with the exception of the references to the term, "Note," in the
definitions of Loan Excess, and 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.
"Subsidiary" means, with respect to Borrower and Guarantor,
respectively, (a) any corporation in which Borrower or Guarantor,
directly or indirectly through its Subsidiaries, owns more than fifty
percent (50%) of the stock of any class or classes having by the terms
thereof the ordinary voting power to elect a majority of the directors
of such corporation; and (b) any partnership, association, joint
venture, or other entity in which Borrower or Guarantor, respectively,
directly or indirectly through its Subsidiaries, has more than a fifty
percent (50%) equity interest at the time.
Article I of the Loan Agreement is hereby amended by adding the
following definitions thereto:
"Borrowing Base Securities" means Eligible Marketable
Securities of Borrower that are added to the Borrowing Base Properties
pursuant to Section 2.14.
"Certificate of Liquidity" shall have the meaning set forth in
Section 5.28.
"Collateral Letter(s) of Credit" means any irrevocable,
standby letter of credit naming Bank as the beneficiary with a
termination date not sooner than thirty (30) days after the Maturity
Date or the Second Term Loan Maturity Date, whichever is later, issued
by another bank on terms and conditions satisfactory to Bank, in its
sole discretion, which may be drawn upon by the Bank's draft
accompanied by a certificate that an Event Default has occurred and is
continuing.
"Eligible Marketable Securities" means the unrestricted shares
of stock in R&B Falcon Corporation, and any other unrestricted shares
of stock that are approved by the Bank in its sole discretion.
"Fifth Amendment" means the Fifth Amendment to this Agreement
executed by Borrower and Bank effective on March 22, 1999.
"Guarantor" means, individually and collectively, Paul B.
Loyd, Jr., Steven A. Webster, and Douglas A.P. Hamilton.
"Guaranty" means the limited guaranty of Borrower's
Obligations to Bank with respect to the Second Term Loan, in form and
substance satisfactory to Bank, duly executed by each Guarantor.
"Liquid Assets" shall have the meaning ascribed to that term
in the Guaranty.
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"Pledge of Brokerage Account" means a pledge agreement in form
and substance satisfactory to Bank pursuant to which Borrower or any
Guarantor, as Debtor, pledges to Bank, as Secured Party, a brokerage
account of Borrower or such Guarantor, in which are deposited Cash,
Cash Equivalent, or Eligible Marketable Securities owned by such party.
"Second Term Loan" means that certain $9,000,000.00 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 additional equity of Borrower if the
proceeds of such issuance is sufficient to repay the Second Term Loan;
(2) the date of closing of the issuance of convertible subordinated
debt of Borrower if the proceeds of such issuance is sufficient to
repay the Second Term Loan; (3) the date of repayment of the Revolving
Loan; and (4) January 1, 2001.
"Second Term Note" means the promissory note in the original
face amount of $9,000,000.00 dated of even date herewith, made by
Borrower payable to the order of Bank, in substantially the form
attached to the Fifth Amendment as Exhibit "B," 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.
"Stock Pledge Agreement" means a pledge agreement in form and
substance satisfactory to Bank pursuant to which Borrower or any
Guarantor, as Debtor, pledges to Bank, as Secured Party, Eligible
Marketable Securities owned by such party.
Article II of the Loan Agreement is hereby amended by revising the
following sections as follows:
Section 2.09, Mandatory Prepayment of the Notes, is hereby amended by
replacing the number "thirty (30)" in the third line thereof with the number
"fifteen (15)" and by replacing the text: "Cash and/or Cash Equivalent of
Borrower" in the eighth and ninth lines thereof with the text: "Cash, Cash
Equivalent and/or Eligible Marketable Securities of Borrower or any Guarantor".
Section 2.10, Borrowing Base Determination, is hereby amended by
re-lettering paragraph "c. Equity Cushion" and paragraph "d. Unscheduled
Borrowing Base Redetermination" as paragraphs "d" and "e", respectively, and by
inserting the following paragraph "c":
c. Borrowing Base Securities. At each time that the Bank
redetermines the Borrowing Base attributable to the Borrowing Base Oil
and Gas Properties, as set forth in Section 2.10(a), it shall also
include in the Borrowing Base calculation seventy-five percent (75%) of
the market value of the Borrowing Base Securities that are either in
the Bank's possession and are subject to one or more of the applicable
Security Agreements, or are in a brokerage account that has been
pledged to Bank on terms and conditions satisfactory to Bank, in its
sole discretion, with the market value thereof to be determined based
on the announced value at which such securities were trading as of the
close of trading on the last
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trading day of the month preceding the month in which the Bank notifies
Borrower of the redetermination of the Borrowing Base.
Section 2.10, Borrowing Base Determination, is hereby further amended
with respect to paragraph "e", formerly paragraph "d", by inserting the
following text in the fourth line between the words "time" and "which":
and Bank intends to monitor the Borrowing Base value of the
Borrowing Base Securities on a weekly basis and redetermine
the Borrowing Base whenever Bank deems it prudent based on
changes in the weekly value of the Borrowing Base Securities,
Section 2.11, Assignment of Production, is hereby amended by replacing
the section references "3.17 and/or 3.19" in the third line from the end thereof
with the section references "3.14 and/or 3.16".
Section 2.14 Addition of Borrowing Base Properties is hereby amended by
replacing that section in its entirety with the following:
2.14 Addition of Borrowing Base Properties. Borrower may,
from time to time upon thirty (30) days prior written notice to Bank,
propose to add Oil and Gas Properties, Cash, Cash Equivalent, and/or
Eligible Marketable Securities of Borrower or any Guarantor to the
Borrowing Base Properties. Any such proposal to add Oil and Gas
Properties of Borrower or any Guarantor to the Borrowing Base
Properties shall be accompanied by an engineering report applicable to
such Oil and Gas Properties that conforms to the requirements of
Section 2.10, evidence sufficient to establish that Borrower and/or
such Guarantor, as applicable, has Marketable Title to such Oil and Gas
Properties, and such other data as Bank may reasonably request. Any
such proposal to add Eligible Marketable Securities of Borrower or any
Guarantor to the Borrowing Base properties shall be accompanied by
evidence sufficient to establish that Borrower or such Guarantor has
Marketable Title to such Eligible Marketable Securities, and such other
data as Bank may reasonably request. Any such additions shall become
effective at such time as: (a) Bank has made its determination in the
ordinary course of business of the amount by which the Borrowing Base
would be increased as the result of such addition and (b) the
conditions set forth in Article III hereof, to the extent they are
applicable to such additional Borrowing Base Properties of Borrower or
any Guarantor, have been satisfied.
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Article II of the Loan Agreement is hereby amended by replacing the
following sections in their entirety as follows:
2.22 Second Term Loan. Based on the terms and conditions and
relying on the representations and warranties contained in this
Agreement, (i) Bank has heretofore advanced $7,000,000.00 of the Second
Term Loan to Borrower, and (ii) subject to the terms and conditions and
relying on the representations and warranties contained in this
Agreement, Bank agrees to advance $2,000,000.00 of the Second Term Loan
at the closing of the Fifth Amendment.
2.23 Second Term Note. The obligation of Borrower to repay the
Second Term Loan shall be evidenced by the Second Term Note.
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 Term Loan Maturity Date. For the period
beginning on the date of the Fifth Amendment until December 1, 2000,
principal payments on the Second Term Loan evidenced by this Note shall
not be due, unless preceded by the Second Term Loan Maturity Date, when
the entire unpaid balance of this Note, inclusive of principal and
interest, shall be paid in full. Except as provided for in the
preceding sentence, the principal payments under the Second Term Loan
evidenced by the Second Term Note will be repaid in twelve (12) equal
consecutive monthly installments in the amount of $750,000.00 each,
beginning on January 1, 2000, and continuing on the first day of each
calendar month thereafter until 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 without penalty,
the entire balance outstanding on the Second Term Note, together with
all accrued, unpaid interest.
Article III of the Loan Agreement is hereby amended by replacing the
following sections in their entirety as follows:
3.14 Security Instruments. As security for the payment of the
Notes and the performance of the Obligations of Borrower under this
Agreement, Bank shall have received the Security Instruments, duly
executed by Borrower with respect to Borrowing Base properties owned by
Borrower and duly executed by the applicable Guarantor with respect to
Borrowing Base Properties owned by such Guarantor.
3.16 Documents Required for Subsequent Disbursements. As of
the time of funding any additional advances to Borrower that are made
in conjunction with the addition to the Borrowing Base Properties of
Oil and Gas Properties, Cash, Cash Equivalent, and/or Eligible
Marketable Securities owned by Borrower or any Guarantor, Borrower
shall have duly delivered or caused to be delivered to Bank: (i) the
Security Instruments that are
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necessary or appropriate, in the opinion of Bank, relating to such
additional Borrowing Base Properties, (ii) Transfer Order Letters
applicable to the production of oil and gas from any additional Oil and
Gas Properties added to the Borrowing Base Properties, and (iii)
possession of any such additional Borrowing Base Cash and Borrowing
Base Securities.
Article III of the Loan Agreement is hereby amended by adding the
following Section 3.19.
3.19 Conditions Precedent in Connection with the Fifth
Amendment. The obligation of Bank to make the $2,000,000.00
disbursement pursuant to 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, Fifth Amendment and
Certificate of Compliance. Bank shall have received the Second Term
Note, multiple counterparts of the Fifth Amendment, as requested by
Bank, and the Certificate of Compliance duly executed by an authorized
officer for Borrower.
(b) Receipt of Collateral Documents. As security for the
payment of the Notes and the performance of the obligations of Borrower
under this Agreement, Bank shall have received:
(i) a duly executed Guaranty from each Paul B. Loyd, Jr.,
Steven A. Webster, and Douglas A.P. Hamilton, as
Guarantors, of Borrower's Obligations to Bank with respect
to the Second Term Loan, in form and substance
satisfactory to Bank;
(ii) a duly executed Stock Pledge Agreement from Steven A.
Webster covering 143,800 shares of stock of R&B Falcon
Corporation owned by Steven A. Webster, along with a duly
executed corresponding stock power;
(iii) a duly executed Pledge of Brokerage Account from
Paul B. Loyd, Jr. covering Compass Brokerage, Inc.
Account No. 5AC-036699; and
(iv) satisfactory evidence that Douglas A.P. Hamilton has
obtained the issuance of a Collateral Letter of Credit
in the amount of $670,000.00.
(c) 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 Fifth Amendment and the execution of the
Fifth 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
Fifth 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.
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(d) 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; and no Event of Default shall have occurred and be continuing or
will have occurred at the completion of the making of such Loan.
(e) Legal Matters Satisfactory to Special Counsel to Bank. All
legal matters incident to the consummation of the transactions
contemplated by the Fifth Amendment shall be satisfactory to the firm
of Porter & Hedges, L.L.P., special counsel for Bank.
(f) 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.
(g) Facility Fee. Bank shall have received the Facility Fee in
the amount of $40,000.00 prior to or at closing of the Fifth Amendment.
Article IV of the Loan Agreement is hereby amended as follows:
References to Borrower's Representations and Warranties under Sections
4.03, 4.05, 4.12, 4.14, 4.15, 4.16, 4.18, and 4.20 shall also apply with equal
force and effect to each Guarantor under those sections.
Section 4.11 Scope and Accuracy of Financial Statements of the Loan
Agreement is hereby amended by replacing the text of that section as follows:
4.11 Scope and Accuracy of Financial Statements. All Financial
Statements submitted and to be submitted to Bank hereunder, including,
without limitation, the Financial Statements of Borrower and Guarantor,
are and will be complete and correct in all material respects; with
respect to Borrower, are and will be prepared in accordance with GAAP
and practices consistently applied; with respect to Guarantor, are and
will be prepared on a cash accounting basis and tax accounting
practices consistently applied; and do and will fairly reflect the
financial condition and the results of the operations of Borrower and
Guarantor in all material respects as of the dates and for the period
stated therein (subject only to normal year-end audit adjustments with
respect to such unaudited interim statements of Borrower); and no
material adverse change has since occurred in the condition, financial
or otherwise, of Borrower or Guarantor, or their respective
Subsidiaries (taken as a whole).
Article V of the Loan Agreement is hereby amended as follows:
References to Borrower's Affirmative Covenants under Sections 5.08 and
5.16 shall also apply with equal force and effect to each Guarantor under those
sections.
Article V of the Loan Agreement is hereby amended by adding the
following new sections:
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5.26 Annual Unaudited Financial Statements of Guarantor.
Deliver or cause to be delivered to Bank, on or before the ninetieth
(90th) day after the close of each calendar year, unaudited personal
Financial Statements of Guarantor as at the end of such year, which
Financial Statements shall include cash flow and contingent liability
information, and shall be certified by the Guarantor as being true and
correct.
5.27 Guarantor's Tax Returns. Deliver or cause to be delivered
to Bank, on or before the forty-fifth (45th) day after each Guarantor's
annual personal tax return for the preceding tax year is filed with the
Internal Revenue Service, copies of the first two pages of such annual
personal tax return of such Guarantor for the such tax year, certified
by such Guarantor as being true and correct.
5.28 Liquidity of Certain Guarantors. Borrower shall cause
each of the Guarantors to deliver to Bank a Certificate of Liquidity
pursuant to and in the form attached to the Guaranty, certifying the
value of such Guarantor's Liquid Assets.
Article VI of the Loan Agreement is hereby amended as follows:
Section 6.06, Sales of Assets, of the Loan Agreement is hereby amended
by replacing the text of that section as follows:
6.06 Sales of Assets. Sell, lease, assign, transfer or
otherwise dispose of, in one or any series of related transactions, all
or any part of its assets, if such transfer is material to Borrower's
operations, nor enter into any arrangement, directly or indirectly,
with any Person to sell and rent or lease back such assets or any part
thereof which are intended to be used for substantially the same
purpose or purposes as the assets sold or transferred; provided,
however, that Bank will consent to sales, leases, assignments,
transfers or other dispositions of assets representing not more than
ten percent (10%), in the aggregate, of the net present value, as
calculated by Bank in its sole discretion, of the Oil and Gas
Properties that are included in the Borrowing Base Properties at any
time, subject to a contemporaneous reduction in the Borrowing Base, in
an amount determined by Bank in its sole discretion, as the result of
the removal of such Oil and Gas Properties from the Borrowing Base
Properties, and if a Loan Excess would result from such reduction in
the Borrowing Base, such Loan Excess shall be repaid contemporaneously
with the consummation of such sale.
Article VII of the Loan Agreement is hereby amended as follows:
Section 7.01 is hereby amended by adding thereto the following new
clause (j):
(j) Borrower shall fail to cause each of the Guarantors to
deliver a Certificate of Liquidity of such Guarantor by the date
specified in the Guaranty, or any such Certificate of Liquidity shall
be false or misleading in any material respect or shall disclose that
such Guarantor owns Liquid Assets valued at less than $5,000,000.00.
Section 8.03 is hereby amended by adding thereto the following at the
end of clause (b):
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with copies to:
Steven A. Webster Paul B. Loyd, Jr. Douglas A. P. Hamilton
901 Threadneedle, 901 Threadneedle c/o Anatar Investments, Inc.
Suite 200 Suite 200 485 Madison Ave.
Houston, Texas 77079 Houston, Texas 77079 23rd Floor
Fax: (281) 589-4440 Fax: (281) 496-1749 New York, NY 10022
Fax: (212) 584-2195
Exhibit "A" (Form of Note) attached to the Fourth Amendment is hereby
replaced with Exhibit "A" attached to this Fifth Amendment.
Exhibit "C" (Security Instruments) attached to the Loan Agreement is
hereby amended by replacing paragraph 4 therein with the following paragraph 4:
4. SECURITY AGREEMENT (PLEDGE) granting Bank a first priority security
interest in all of Borrower's or any Guarantor's Borrowing Base Cash and
Borrowing Base Securities that are held in Borrower's or such
Guarantor's name, and all products and proceeds thereof, if, as and when
Borrowing Base Cash and/or Borrowing Base Securities are added to the
Borrowing Base Properties.
Exhibit "C" (Security Instruments) attached to the Loan Agreement is
hereby further amended by renumbering paragraphs 5 through 7 thereof as
paragraphs 7 through 9, and by adding the following new paragraphs 5 and 6:
5. PLEDGE OF DEPOSIT ACCOUNT granting Bank a first priority security
interest in all of Borrower's or any Guarantor's Borrowing Base
Securities that are held in a brokerage account, and all products and
proceeds thereof, if, as and when Borrowing Base Securities held in a
brokerage account are added to the Borrowing Base Properties.
6. COLLATERAL LETTERS OF CREDIT naming Bank as beneficiary, if, as and
when Collateral Letters of Credit are added to the Borrowing Base
Properties.
Exhibit "E" (Form of Monthly Borrowing Base Certificate) attached to the
Loan Agreement is hereby replaced with Exhibit "B" attached to this Fifth
Amendment.
II Reaffirmation of Representations and Warranties. To induce Bank to
enter into this Fifth 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 Fifth Amendment and the
performance by Borrower of its obligations under this Fifth 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
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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 Fifth 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 in this Fifth
Amendment.
IV Reaffirmation of Loan Agreement. This Fifth 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.
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 FIFTH 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 Fifth 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
Fifth 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 Fifth
Amendment shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Fifth 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 Fifth 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
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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 Fifth Amendment are
for convenience of reference only, and shall not affect the construction of this
Fifth Amendment.
X Successors and Assigns. This Fifth 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 FIFTH 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 Fifth Amendment
to be duly executed as of the day and year first above written.
BANK BORROWER
COMPASS BANK CARRIZO OIL & GAS, INC.
By: By:
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Kathleen J. Bowen Frank A. Wojtek
Vice President Vice President
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EXHIBIT "A"
AMENDED AND RESTATED TERM NOTE
$9,000,000.00 Houston, Texas March 22, 1999
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 NINE MILLION AND NO/100 DOLLARS ($9,000,000.00), 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 Combined 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, the Fourth Amendment dated September 24, 1998 and the Fifth Amendment
thereto 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 Street Journal in
the "Money Rates" or similar table, then Bank may select an alternative
published
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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 seven and three-fourths percent (7.75%) 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 Note which lawfully permits the charging and collection of
the highest permissible lawful, non-usurious rate of interest on this 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 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 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.
Interest on this Note, calculated pursuant to Section 2.04 of the Loan
Agreement, 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 of the Loan Agreement, through and including the Term Loan Maturity Date.
For the period beginning on the date hereof until December 1, 2000, principal
payments on the Second Term Loan evidenced by this Note shall not be due, unless
preceded by the Second Term Loan Maturity Date (as defined in the Loan
Agreement), when the entire unpaid balance of this Note, inclusive of principal
and interest, shall be paid in full. Except as provided for in the preceding
sentence, the principal payments under the Second Term Loan shall be repaid in
twelve (12) equal consecutive monthly installments in the amount of $750,000.00
each, beginning on January 1, 2000, and continuing on the first day of each
calendar month thereafter until the Second Term Loan Maturity Date, when the
entire unpaid balance of this Note, inclusive of principal and interest, shall
be paid in full.
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.
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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 Amended and Restated Second Term Note issued pursuant
to the Fifth Amendment to the Loan Agreement and it amends and restates, but
does not extinguish, the Term Note dated September 24, 1998 in the face amount
of $7,000,000.00, executed by Borrower and made payable to Bank. 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.
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
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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 effective the 22nd day of March 1999.
CARRIZO OIL & GAS, INC.
By:
---------------------------------
Frank A. Wojtek
Vice President
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EXHIBIT "B"
FORM OF MONTHLY BORROWING BASE CERTIFICATE
I, the undersigned officer of CARRIZO OIL & GAS, INC. (the "Company"),
pursuant to Section 5.06 of the First Amended, Restated, and Combined Loan
Agreement dated as of August 28, 1997, as amended from time to time, by and
between COMPASS BANK (the "Bank") and the Company (the "Agreement"), do hereby
certify that:
The Borrowing Base, calculated in accordance with the Agreement as of
the last day of the month preceding the month in which this certificate
is executed and delivered to the Bank (the "Effective Date"), is
$_________________. Such Borrowing Base is the sum of the following
Borrowing Base components calculated as of the Effective Date:
a. Borrowing Base Cash (including Collateral Letters of Credit) in the
amount of $___________; plus
b. Borrowing Base Securities valued, for Borrowing Base purposes(1), at
$___________; plus
c. Borrowing Base Oil and Gas Properties valued, pursuant to Section
2.10 of the Agreement, at $_________________, inclusive of the Monthly Borrowing
Base Reduction most recently established by the Bank pursuant to Section 2.10.
This certificate is executed this ____ day of ___________, 199____.
CARRIZO OIL & GAS, INC.
By:
--------------------------------
Frank A. Wojtek
Vice President
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(1) The Borrowing Base value of Borrowing Base Securities equals 75% of the
announced value of such securities as of the close of trading on the last
trading day of the month in which the Effective Date occurs.
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EXHIBIT "C"
COMPLIANCE CERTIFICATE
I, Frank A. Wojtek, Vice President of CARRIZO OIL & GAS, INC.
(the "Company"), pursuant to Section 3.19 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 22nd day of March 1999.
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Frank A. Wojtek