EXECUTION VERSION
TENTH AMENDMENT TO CREDIT AGREEMENT
TENTH AMENDMENT TO
CREDIT AGREEMENT (this “ Amendment ”) dated
as of May 20, 2009, 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 ”), GUARANTY BANK, as resigning administrative
agent for the Lenders (in such capacity, the “ Resigning
Agent ”) and as resigning issuing bank (in such capacity,
the “ Resigning Issuing Bank ”) and WELLS FARGO
BANK, N.A., as successor administrative agent for the Lenders (in
such capacity, the “ Successor Agent ”) and as
successor issuing bank (in such capacity, the “ Successor
Issuing Bank ”). 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, Resigning Agent and certain
Lenders are party to that certain Credit Agreement, dated as of May
25, 2006 (as the same has been and may hereafter be amended,
restated, supplemented or otherwise modified from time to time, the
“ Credit Agreement ”); and
WHEREAS,
Resigning Agent and Resigning Issuing Bank desire to resign as
Administrative Agent and Issuing Bank, respectively, under the
Credit Agreement and Successor Agent and Successor Issuing Bank
desire to be appointed as Administrative Agent and Issuing Bank,
respectively, under the Credit Agreement; and
WHEREAS,
Borrower, Guarantors, Successor Agent and Lenders have agreed to
amend the Credit Agreement as provided herein, subject to the terms
and conditions set forth herein.
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, the parties hereto 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 5 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
Cover Page . The cover page to the Credit
Agreement shall be and it hereby is amended in its entirety and
replaced with the cover page attached hereto as Annex A
.
1.2
Preamble. The preamble to the Credit Agreement
shall be and it hereby is amended by deleting the reference to
“GUARANTY BANK” and substituting in lieu thereof the
name “WELLS FARGO BANK, N.A.”.
1.3
Additional Definitions. The following
definitions shall be and they hereby are added to
Section 1.01 of the Credit Agreement in appropriate
alphabetical order:
“ Tenth
Amendment Effective Date ” means May 20, 2009.
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Page 1
“ Wells
Fargo ” means Wells Fargo Bank, N.A.
1.4
Amended Definitions. The following definitions
in Section 1.01 of the Credit Agreement shall be and
they hereby are amended in their respective entireties to read as
follows:
“
Administrative Agent ” means Wells Fargo Bank, N.A.,
in its capacity as contractual representative of the Lenders
hereunder pursuant to ARTICLE X and not in its individual capacity
as a Lender, and any successor agent appointed pursuant to ARTICLE
X.
“
Approved Counterparty ” means, at any time and from
time to time, (i) any Person engaged in the business of writing
Swap Agreements for commodity, interest rate or currency risk that
is acceptable to the Administrative Agent or has (or the credit
support provider of such Person has), at the time Borrower or any
Restricted Subsidiary enters into a Swap Agreement with such
Person, a long term senior unsecured debt credit rating of BBB+ or
better from S&P or Baa1 or better by Moody’s, (ii) any
Lender Counterparty, and (iii) Shell Energy North America (US)
L.P.
“
Aggregate Commitment ” means, as of the Tenth
Amendment Effective Date, $259,400,000 and thereafter as such
amount may be reduced or increased from time to time pursuant to
Section 2.02 and Section 2.02A and as a result of changes in the
Borrowing Base; provided that such amount shall not at any time
exceed the lesser of (i) the Maximum Facility Amount and (ii) the
Borrowing Base then in effect. If at any time the
Borrowing Base is reduced below the Aggregate Commitment, the
Aggregate Commitment shall be reduced automatically to the amount
of the Borrowing Base in effect at such time.
“ Cash
Management Obligations ” means, with respect to any
Credit Party, any obligations of such Credit Party owed to Wells
Fargo or any of its Affiliates in respect of treasury management
arrangements, depositary or other cash management services.
“ Fee
Letter ” means that certain Fee and Mandate Letter, dated
as of May 18, 2009, between the Borrower and Wells Fargo.
“ Issuing
Bank ” means Wells Fargo, in its capacity as the issuer
of Letters of Credit hereunder, and its predecessors and/or
successors in such capacity to the extent provided in Section
2.05(i). The Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term
“Issuing Bank” shall include any such Affiliate with
respect to Letters of Credit issued by such Affiliate.
“ Prime
Rate ” means the rate of interest per annum publicly
announced from time to time by Wells Fargo as its prime rate in
effect at its principal office in Houston, Texas. Each
change in the Prime Rate shall be effective from and including the
date such change is publicly announced as being effective.
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1.5
Deleted Definitions. Section 1.01 of the
Credit Agreement shall be and it hereby is amended by deleting the
following definition: “Guaranty Bank”.
1.6
Fees. Clause (b) of Section 2.11 of the
Credit Agreement shall be and it hereby is amended by deleting the
phrase “Seventh Amendment Effective Date” located twice
therein and twice substituting in lieu thereof the phrase
“Tenth Amendment Effective Date”.
1.7
Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
Clauses (a) and (b) of Section 2.17 of the
Credit Agreement shall be and they hereby are amended in their
respective entireties to read as follows:
(a) The
Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of
LC Disbursements, or of amounts payable under Section 2.14, Section
2.15 or Section 2.16, or otherwise) prior to 12:00 noon, on the
date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day
for purposes of calculating interest thereon. All such
payments shall be made to the Administrative Agent at its offices
at 1700 Lincoln Ave. 3 rd Floor, MAC C7300-035, Denver,
Colorado 80203, except payments to be made directly to the Issuing
Bank as expressly provided herein and except that payments pursuant
to Section 2.14, Section 2.15, Section 2.16 and Section 11.03 shall
be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient
promptly following receipt thereof in like funds as
received. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for
the period of such extension. All payments hereunder
shall be made in Dollars.
(b) If
at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and
fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to
such parties; provided that in the event such funds are received by
and available to the Administrative Agent as a result of the
exercise of any rights and remedies with respect to any collateral
under the Security Instruments, the parties entitled to a ratable
share of such funds pursuant to the foregoing clause (ii) and the
determination of each parties’ ratable share shall include,
on a pari passu basis, (x) the Lender Counterparties and the actual
aggregate amounts then due and owing to each Lender Counterparty by
the Borrower or any Guarantor as a result of the early termination
of any
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transactions under any Swap Agreements
included in the Obligations (after giving effect to any netting
agreements) and (y) Wells Fargo or any of its Affiliates with
respect to Cash Management Obligations then due and owing to Wells
Fargo or any of its Affiliates by any Credit Party.
1.8
Deposit Accounts. Section 4.18 of
the Credit Agreement shall be and it hereby is amended in its
entirety to read as follows:
Section
4.18. Deposit Accounts
. From and after forty-five (45) days after the Tenth
Amendment Effective Date (or such longer time as acceptable to
Administrative Agent in its sole discretion), except for deposit
and investment accounts maintained at financial institutions (other
than the Administrative Agent) the aggregate balance of which does
not exceed $200,000 at any time for all such other deposit and
investment accounts taken as a whole, no Credit Party maintains any
deposit or investment account (and no Affiliate of any Credit Party
maintains any deposit or investment account) into which either (a)
proceeds of Hydrocarbon production from the Oil and Gas Interests
included in the Borrowing Base Properties are deposited or (b)
distributions and dividends on Equity Interests owned by any Credit
Party are paid and deposited, in each case, other than Eligible
Accounts.
1.9
Mortgages. Section 6.09 of the Credit
Agreement shall be and it hereby is amended in its entirety to read
as follows:
Section
6.09. Mortgages
. From time to time as requested by the Administrative
Agent, the Borrower will, and will cause each Guarantor to, execute
and deliver to the Administrative Agent, for the benefit of the
Secured Parties, Mortgages in form and substance reasonably
acceptable to the Administrative Agent together with such other
assignments, conveyances, amendments, agreements and other
writings, including, without limitation, UCC-1 financing statements
(each duly authorized and executed, as applicable) as the
Administrative Agent shall reasonably deem necessary or appropriate
to grant, evidence and perfect a valid first priority
Lien, subject only to Permitted Liens, in (a) not less than eighty
percent (80%) of the Engineered Value of all Borrowing Base
Properties (excluding any Oil and Gas Interests in the area known
as the Camp Hill Field in Anderson County, Texas) and (b) not less
than eighty percent (80%) of the Engineered Value of the
Borrower’s and each Guarantor’s Oil and Gas Interests
in the area known as the Camp Hill Field in Anderson County,
Texas.
1.10
Title Data. Section 6.10 of the Credit
Agreement shall be and it hereby is amended in its entirety to read
as follows:
Section
6.10. Title Data
. From time to time as requested by the Administrative
Agent, the Borrower will, and will cause each Guarantor to, deliver
to the Administrative Agent such opinions of counsel and other
evidence of title as the Administrative Agent shall deem reasonably
necessary or appropriate
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to verify (a) (i) for the period from the
Tenth Amendment Effective Date until thirty (30) days after the
Tenth Amendment Effective Date (or such longer time as acceptable
to Administrative Agent in its sole discretion), such Credit
Party’s title to not less than fifty percent (50%) of the
Engineered Value of the Borrowing Base Properties (excluding any
Oil and Gas Interests in the area known as the Camp Hill Field in
Anderson County, Texas), and (ii) at any time thereafter, such
Credit Party’s title to not less than seventy-five percent
(75%) of the Engineered Value of the Borrowing Base Properties
(excluding any Oil and Gas Interests in the area known as the Camp
Hill Field in Anderson County, Texas), (b) such Credit
Party’s title to not less than fifty percent (50%) of the
Engineered Value of the Oil and Gas Interests in the area known as
the Camp Hill Field in Anderson County, Texas and (c) the validity,
perfection and priority of the Liens created by the Mortgages and
such other matters regarding the Mortgages as Administrative Agent
shall reasonably request. The Borrower will, and will
cause each Guarantor to, use commercially reasonable efforts to
deliver to the Administrative Agent, or its counsel on or before
April 2, 2007, reasonably satisfactory evidence demonstrating that
the Borrower or such Guarantor, as the case may be, has performed
all of the title curative actions described on Schedule
6.10. To the extent any such title curative action is
not performed on or before April 2, 2007, the Administrative Agent
may, in its reasonable discretion, reduce the Borrowing Base to
account for such failure to perform such title curative action and
such reduction shall be restored upon the performance of such title
curative action to the reasonable satisfaction of the
Administrative Agent.
1.11
Production Proceeds and Bank Accounts.
Section 6.15 of the Credit Agreement shall be and it hereby
is amended in its entirety to read as follows:
Section
6.15. Production Proceeds
and Bank Accounts . Within forty-five (45) days
after the Tenth Amendment Effective Date (or such longer time as
acceptable to Administrative Agent in its sole discretion), subject
to the terms and conditions of the Mortgages, each Credit Party
shall cause all production proceeds and revenues attributable to
the Oil and Gas Interests of such Credit Party and all
distributions and dividends on any Equity Interests owned by any
Credit Party to be paid and deposited into deposit accounts of such
Credit Party maintained with the Administrative Agent or with other
financial institutions acceptable to the Administrative Agent and
cause all such deposit accounts at other financial institutions
(other than deposit and investment accounts the aggregate balance
of which does not exceed $200,000 at any time for all such other
deposit and investment accounts taken as a whole) to be subject to
a control agreement in favor of the Administrative Agent for the
benefit of the Secured Parties, in form and substance reasonably
satisfactory to the Administrative Agent (each, an “
Eligible Account ”).
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1.12
Swap Agreements. Section 7.06 of the
Credit Agreement shall be and it hereby is amended in its entirety
to read as follows:
Section
7.06. Swap Agreements
. (a) The Borrower will not, nor will it permit any of
its Restricted Subsidiaries to, enter into or maintain any Swap
Agreement, except the Swap Agreements required under Section 6.11
and Swap Agreements entered into in the ordinary course of business
with Approved Counterparties and not for speculative purposes
to:
(i) hedge or
mitigate Crude Oil and Natural Gas price risks to which the
Borrower or any Restricted Subsidiary has actual exposure,
provided that:
(A) to the extent
any such Swap Agreements requires any Credit Party to deliver
money, assets or other security, including letters of credit,
against any event of nonperformance prior to actual default by such
Credit Party in the performance of its obligations thereunder
(excluding any such Swap Agreement with any Lender Counterparty
that only requires the delivery of the money, assets or other
security required pursuant to the Loan Documents), the aggregate
value of all money, assets or other security, including the amount
drawn or which could be drawn under any such letters of credit,
delivered by the Credit Parties, taken as a whole, shall not exceed
$10,000,000 in the aggregate at any time, and the term of any
transaction entered into after the Effective Date under any such
Swap Agreements requiring such delivery of money, assets or other
security shall not exceed twelve (12) months;
(B) the aggregate
notional volume per month of Crude Oil and Natural Gas, calculated
separately, under all Swap Agreements of the type described in this
clause (i) (including the Swap Agreements required under Section
6.11 but excluding Swap Agreements that constitute a put agreement
or a floor agreement) shall not at any time exceed eighty percent
(80%) of the “forecasted production from proved producing
reserves” (as defined below) of the Borrower and the
Restricted Subsidiaries for any month during the forthcoming four
year period ( provided that no violation of this Section
7.06 shall be deemed to occur with respect to any month for which,
as of May 18, 2009, the aggregate notional volume of Crude Oil and
Natural Gas, calculated separately, under all Swap Agreements then
in effect exceeds 80% of the “forecasted production from
proved producing reserves” of the Borrower and the Restricted
Subsidiaries for such month); and
(C) such Swap
Agreement (excluding any transaction under a Swap Agreement entered
into after the effective date of such Swap Agreement and related
documentation evidencing any such transaction) is in form and
substance reasonably satisfactory to the Administrative Agent and
the Required Lenders (it being understood that each Swap Agreement
to which the Borrower or any Restricted Subsidiary is a party as of
the
Tenth Amendment to Credit Agreement -
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Tenth Amendment Effective Date is
satisfactory to the Administrative Agent and the Required Lenders);
and
(ii) effectively
cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or
otherwise) with respect to any interest-bearing liability or
investment of any Credit Party; provided that:
(A) the aggregate
notional amount under all Swap Agreements of the type described in
this clause (ii) shall not at any time exceed the amount of Loans
then outstanding; and
(B) such Swap
Agreement (excluding any transaction under a Swap Agreement entered
into after the effective date of such Swap Agreement and related
documentation evidencing any such transaction) is in form and
substance reasonably satisfactory to the Administrative Agent and
the Required Lenders (it being understood that each Swap Agreement
to which the Borrower or any Restricted Subsidiary is a party as of
the Tenth Amendment Effective Date is satisfactory to the
Administrative Agent and the Required Lenders).
(b) As used in clause (a)(i)(B), “forecasted
production from proved producing reserves” means the
forecasted production of Crude Oil and Natural Gas
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