EXHIBIT 10.2
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT OR APPLICABLE STATE BLUE SKY LAWS.
ADDITIONALLY, THE TRANSFER OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS
SPECIFIED IN THE NOTE PURCHASE AGREEMENT, DATED AS OF OCTOBER 29, 2004, BY AND
AMONG THE ISSUER HEREOF, THE HOLDERS AND PCRL INVESTMENTS L.P., AS COLLATERAL
AGENT FOR THE HOLDERS ("PURCHASE AGREEMENT"), AND NO TRANSFER OF THESE
SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN
FULFILLED. UPON THE FULFILLMENT OF CERTAIN OF SUCH CONDITIONS, THE ISSUER HEREOF
HAS AGREED TO DELIVER TO THE HOLDER HEREOF A NEW CERTIFICATE, NOT BEARING THIS
LEGEND, FOR THE SECURITIES REPRESENTED HEREBY REGISTERED IN THE NAME OF THE
HOLDER HEREOF. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
ISSUER HEREOF.
THIS NOTE IS SUBJECT TO THE PROVISIONS OF THE SUBORDINATION AGREEMENT, DATED AS
OF OCTOBER 29, 2004, AMONG PCRL INVESTMENTS L.P., IN ITS CAPACITY AS PURCHASER
AND AS COLLATERAL AGENT FOR THE HOLDERS PURSUANT TO THE PURCHASE AGREEMENT,
HIBERNIA NATIONAL BANK, IN ITS CAPACITY AS ADMINISTRATIVE AGENT FOR THE
FINANCIAL INSTITUTIONS PARTY TO THE SENIOR CREDIT AGREEMENT (AS DEFINED IN THE
SUBORDINATION AGREEMENT) AND COMPANY (THE "SUBORDINATION AGREEMENT"). EACH
HOLDER OF THIS PROMISSORY NOTE SHALL BE DEEMED, BY VIRTUE OF SUCH HOLDER'S
ACQUISITION OF THIS PROMISSORY NOTE, TO HAVE AGREED TO PERFORM AND OBSERVE ALL
OF THE TERMS, COVENANTS, AND CONDITIONS TO BE PERFORMED OR OBSERVED BY THE
SUBORDINATED LENDER UNDER (AND AS DEFINED IN) THE SUBORDINATION AGREEMENT.
10% SENIOR SUBORDINATED SECURED NOTE DUE DECEMBER 15, 2008
No. 1
U.S. $18,000,000.00 Dated: October 29, 2004
FOR VALUE RECEIVED, the undersigned, CARRIZO OIL & GAS, INC., a Texas
corporation (the "Company"), HEREBY PROMISES TO PAY to the order of PCRL
INVESTMENTS L.P. (the "Holder") or its successors or assigns the principal sum
of EIGHTEEN MILLION AND NO/100 UNITED STATES DOLLARS ($18,000,000.00) or such
greater or lesser principal amount of this Note then outstanding, on December
15, 2008 (the "Maturity Date"), with interest (calculated on the basis of a year
of 360 days, consisting of twelve, 30-day months) (a) on the unpaid principal
amount hereof at the rate of 10% per annum from October 29, 2004, payable
quarterly in arrears each March 5, June 5, September 5 and December 5 (each a
"Payment Date"), commencing March 5, 2004, until the principal hereof
1
shall have become due and payable, and (b) on the unpaid balance hereof at a
rate of 12% per annum upon the occurrence and during the continuance of an Event
of Default as defined in the Purchase Agreement referred to below.
Except as otherwise provided in Sections 3.3, 3.5 and 3.6 of the Purchase
Agreement referred to below, payments of principal of, interest on and premium,
if any, with respect to this Note are to be made in lawful money of the United
States of America, by wire transfer of immediately available funds, to such
account as the holder of this Note shall have specified by written notice to the
Company from time to time; provided that notwithstanding the foregoing, on each
Payment Date occurring on or before June 5, 2007, the Company may defer fifty
percent (50%) of the interest due on such Payment Date and such deferred
interest shall become a part of the principal due hereunder as of the Payment
Date such interest became due, shall earn interest as provided hereunder and
shall be due and payable on the Maturity Date unless the maturity of the amounts
due hereunder are accelerated pursuant to the terms of this Agreement.
This Note is one of the Notes (herein called the "Notes") issued pursuant
to the Note Purchase Agreement, dated as of October 29, 2004 (as it may be
amended, supplemented or otherwise modified from time to time, being the
"Purchase Agreement"), by and among the Company, the Purchasers and PCRL
Investments L.P., as Collateral Agent. Each holder of' this Note will be deemed,
by its acceptance hereof, (i) to have made the representations set forth in
Article XIII of the Purchase Agreement; (ii) to have agreed to be bound by the
subordination provisions set forth in Article XIV of the Purchase Agreement; and
(iii) to have agreed to be bound by the confidentiality provisions set forth in
Section 16.15 of the Purchase Agreement.
This Note is a registered Note and, as provided in the Purchase Agreement,
upon surrender of this Note for registration of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
and compliance with other provisions of the Purchase Agreement, a new Note for a
like principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Company
may treat the person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes, and the Company
will not be affected by any notice to the contrary.
This Note is subject to prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Purchase Agreement, but not
otherwise.
If an Event of Default, under and as defined in the Purchase Agreement,
occurs and is continuing, the entire unpaid principal of this Note, together
with accrued interest thereon, may be declared or otherwise become due and
payable in the manner, at the price and with the effect provided in the Purchase
Agreement.
Demand, presentment, protest and notice of non-payment and protest are
hereby waived by the Company.
This Note shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.
2
All capitalized terms used but not defined herein have the meanings
ascribed to them in the Purchase Agreement referred to above.
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3
IN WITNESS WHEREOF, the Company has caused this Note to be executed by its
duly authorized officer as of the date first set forth above.
CARRIZO OIL & GAS, INC.
By: /s/ S. P. JOHNSON IV
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Name: S. P. Johnson IV
Title: President
GUARANTY
For value received, CCBM, INC., a Texas corporation, pursuant to that
certain Commercial Guaranty dated October 29, 2004, hereby unconditionally
guarantees to the Holder of the Note upon which this Guaranty is endorsed (a)
the due and punctual payment, on a limited and subordinated basis as set forth
in Article XIV of the Purchase Agreement pursuant to which such Note and this
Guaranty were issued, of the principal of, premium (if any) and interest on such
Note when and as the same shall become due and payable for any reason according
to the terms of such Note and Article IX of the Purchase Agreement, and (b) that
all other obligations of the Company under the Agreement or the Notes will be
promptly paid in full or performed in accordance with the terms of the Agreement
and the Notes.
CCBM, INC.
By: /s/ S. P. JOHNSON IV
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Name: S. P. Johnson IV
Title: President