Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
     SECOND AMENDMENT TO CREDIT AGREEMENT (hereinafter referred to as the
“Amendment”) executed to be effective as of September 11, 2007, 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”) and JPMORGAN CHASE BANK, N.A., as Administrative Agent (in
its such capacity, “Administrative Agent”). 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, Administrative Agent and Lenders have
entered into that certain Credit Agreement, dated as of May 25, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”); and
     WHEREAS, Borrower has requested that Administrative Agent and Lenders amend
the Credit Agreement to, among other things, (i) permit additional investments
and (ii) increase the Borrowing Base and Conforming Borrowing Base; and
     WHEREAS, Administrative Agent and Lenders have agreed to do so on the terms
and conditions hereinafter set forth;
     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,
Borrower, Administrative Agent and Lenders 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 3 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 Additional Definitions. The following definitions shall be and they
hereby are added to Section 1.01 of the Credit Agreement in appropriate
alphabetical order:
     “Conforming Date” means November 1, 2008.
     “Second Amendment Effective Date” means September 11, 2007.
     1.2 Amended Definitions. The following definitions in Section 1.01 of the
Credit Agreement shall be and they hereby are amended in their entirety to read
as follows:
     “Borrowing Base Usage” means, as of any date and for all purposes, the
quotient, expressed as a percentage, of (i) the Aggregate Credit Exposure as of
such date, divided by (ii) the Conforming Borrowing Base as of such date.
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     “Conforming Borrowing Base” means, at any time, an amount equal to the
amount determined in accordance with Section 3.01, as the same may be
redetermined, adjusted or reduced from time to time pursuant to Section 3.02,
Section 3.03, Section 3.04 and Section 3.05 or as otherwise adjusted or
redetermined pursuant to Section 7.04, provided that (i) in no event shall the
Conforming Borrowing Base exceed the Borrowing Base and (ii) in the event no
Conforming Borrowing Base is designated pursuant to Article III or Section 7.04,
the Conforming Borrowing Base shall be deemed equal to the Borrowing Base.
     1.3 Deleted Definition. The defined term “Adjustment Percentage” and the
definition thereof shall be and it hereby is deleted from Section 1.01 of the
Credit Agreement.
     1.4 Proposed Borrowing Base and Proposed Conforming Borrowing Base. The
last sentence of Section 3.01 of the Credit Agreement shall be and it hereby is
amended in its entirety to read as follows:
     Promptly after the receipt by the Administrative Agent of such Reserve
Report and Borrower’s requested amount for the Borrowing Base, the
Administrative Agent shall submit to the Lenders a recommended amount of the
Borrowing Base and, with respect to any Redetermination prior to the Conforming
Date, the Conforming Borrowing Base as of the next Redetermination Date;
provided that no Redetermination of the Conforming Borrowing Base shall be
required after the Conforming Date.
     1.5 Scheduled Redeterminations of the Borrowing Base and Conforming
Borrowing Base. The first sentence of Section 3.02 of the Credit Agreement shall
be and it hereby is amended in its entirety to read as follows:
     Based in part on the Reserve Reports made available to the Administrative
Agent and the Lenders pursuant to Section 3.01, the Lenders shall redetermine
the Borrowing Base on or prior to the next Redetermination Date and, if such
Redetermination Date is prior to the Conforming Date, the Conforming Borrowing
Base (or such date promptly thereafter as reasonably possible based on the
engineering and other information available to the Lenders).
     1.6 Borrowing Base Adjustments. Section 3.05 of the Credit Agreement shall
be and it hereby is amended in its entirety to read as follows:
     (a) In the event the Redetermination of the Borrowing Base is not made on
or prior to January 1, 2008, as a result of the Borrower failing to comply with
the requirements of this ARTICLE III with respect to such Redetermination on the
dates required without giving effect to any grace or cure period provided in
ARTICLE IX with respect to such failure, the Borrowing Base shall be reduced by
$3,000,000 on January 1, 2008 and by $3,000,000 on the first day of each month
thereafter (the “Monthly Reduction”) until the Borrowing Base and Monthly
Reduction are otherwise redetermined pursuant to this Article III.
     (b) In the event the outstanding principal balance of the Indebtedness
under the Second Lien Facility exceeds $225,000,000 at any time after the First
Amendment Effective Date, the Borrowing Base then in effect shall be reduced by
$1.00 for every $4.00 of such additional Indebtedness as of the date such
additional Indebtedness is incurred.
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     1.7 Notice of Redetermination. Section 3.06 of the Credit Agreement shall
be and hereby is amended in its entirety to read as follows:
     Section 3.06 Notice of Redetermination. Promptly following any
Redetermination of the Borrowing Base or the Conforming Borrowing Base, the
Administrative Agent shall notify the Borrower of the amount of the redetermined
Borrowing Base, Conforming Borrowing Base and Monthly Reduction, which Borrowing
Base, Conforming Borrowing Base and Monthly Reduction shall be effective as of
the date specified in such notice, and such Borrowing Base, Conforming Borrowing
Base and Monthly Reduction shall remain in effect for all purposes of this
Agreement until the next Redetermination.
     1.8 Investment Basket. Clause (n) of Section 7.05 of the Credit Agreement
shall be and it hereby is amended in its entirety to read as follows:
     (n) any other investments in any Person having an aggregate fair market
value (measured on the date each such investment was made and without giving
effect to subsequent changes in value), when taken together with all other
investments made pursuant to this clause (n) do not exceed $30,000,000; provided
that not more than $20,000,000 of such investments may be made with the proceeds
of Loans and any such investments made in excess of $20,000,000 must be made
with the proceeds of cash equity offerings of the Borrower after the Second
Amendment Effective Date.
     1.9 Amendments and Waivers. The first sentence of Section 11.02(b) of the
Credit Agreement shall be and it hereby is amended by replacing “August 1, 2007”
with “the Conforming Date”.
     1.10 Redetermined Borrowing Base; Conforming Borrowing Base. This Amendment
shall constitute a notice of the redetermination of the Borrowing Base and the
Conforming Borrowing Base pursuant to Section 3.03 of the Credit Agreement and
Administrative Agent hereby notifies Borrower that, as of the Second Amendment
Effective Date, the redetermined Borrowing Base is $117,000,000, and the
redetermined Conforming Borrowing Base is $100,000,000.
     1.11 Amendment to Schedule. Schedule 2.01 of the Credit Agreement shall be
and it hereby is amended in its entirety by substituting Schedule 2.01 which is
attached hereto.
     1.12 Consent and Waiver. Notwithstanding anything to the contrary in
Section 3.01 or Section 6.01(e) of the Credit Agreement, Administrative Agent
and each Lender hereby consents the extension of the deadline for delivery of
the Reserve Report required as of September 1, 2007 (the “September 2007 Reserve
Report”) to November 15, 2007 and the date of the Scheduled Redetermination to
be made based on such Reserve Report to December 1, 2007. As requested by
Borrower, the Lenders hereby waive the Event of Default pursuant to Article IX,
clause (d) or clause (e) of the Credit Agreement arising as a result of
Borrower’s failure to deliver the September 2007 Reserve Report on or before
September 1, 2007. The foregoing waiver is expressly limited as follows:
(a) such waiver is limited to the failure to deliver the September 2007 Reserve
Report and (b) such waiver is a limited, one-time waiver, and nothing contained
herein shall obligate any Lender to grant any additional or future waiver
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of Sections 3.01 or 6.01(e) of the Credit Agreement for any other Reserve Report
or grant any additional or future waiver of any other provision of the Credit
Agreement or any other Loan Document.
SECTION 2. Assignment of Commitments and Loans. JPMorgan Chase Bank, N.A., as a
Lender, has agreed to assign a portion of its Commitment and the Loans to
Guaranty Bank. After such assignment of the Commitments and the Loans on the
date hereof, Guaranty Bank and JPMorgan Chase Bank, N.A. shall own the
Applicable Percentages set forth on Schedule 2.01 of this Amendment. With
respect to such assignment, Guaranty Bank shall be deemed to have acquired the
Commitments and Loans allocated to it from JPMorgan Chase Bank, N.A., as a
Lender, pursuant to the terms of the Assignment and Assumption Agreement
attached as “Exhibit A” to the Credit Agreement as if Guaranty Bank and JPMorgan
Chase Bank, N.A., as a Lender, had executed an Assignment and Assumption
Agreement with respect to such allocation. The funds delivered to Administrative
Agent by Guaranty Bank shall be allocated such that after giving effect to such
allocation each of the Lenders shall own the Commitment Percentages set forth on
Schedule 2.01 to the Credit Agreement. Borrower and the Administrative Agent
hereby consent to such assignment.
SECTION 3. Conditions. The amendments to the Credit Agreement contained in
Section 1 of this Amendment, the consent and waiver contained in Section 1 of
this Amendment and the assignment contained in Section 2 of this Amendment shall
be effective upon the satisfaction of each of the conditions set forth in this
Section 3.
     3.1 Execution and Delivery. Each Credit Party, each Lender, including
Guaranty Bank, and the Administrative Agent shall have executed and delivered
this Amendment.
     3.2 No Default. No Default shall have occurred and be continuing or shall
result from effectiveness of this Amendment.
     3.3 No Material Adverse Effect. No Material Adverse Effect shall have
occurred since December 31, 2006.
     3.4 Fees. Borrower shall have paid to the Administrative Agent, for the
benefit of the Lenders, fees payable in the amounts and at the times separately
agreed upon between the Administrative Agent and the Borrower.
     3.5 Note. Borrower shall have executed and delivered a promissory note
payable to Guaranty Bank in accordance with Section 2.08(e) of the Credit
Agreement.
     3.6 Other Documents. The Administrative Agent shall have received such
other instruments and documents incidental and appropriate to the transaction
provided for herein as the Administrative Agent or its special counsel may
reasonably request, and all such documents shall be in form and substance
satisfactory to the Administrative Agent.
SECTION 4. Representations and Warranties of Borrower. To induce the Lenders to
enter into this Amendment, the Borrower hereby represents and warrants to the
Lenders as follows:
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     4.1 Reaffirmation of Representations and Warranties/Further Assurances.
After giving effect to the amendments herein, each representation and warranty
of the Borrower contained in the Credit Agreement or in any of the other Loan
Documents is true and correct in all material respects as of the Second
Amendment Effective Date (except to the extent such representations and
warranties specifically refer to an earlier date).
     4.2 Corporate Authority; No Conflicts. The execution, delivery and
performance by the Borrower (to the extent a party hereto or thereto) of this
Amendment and all documents, instruments and agreements contemplated herein are
within Borrower’ corporate or other organizational powers, have been duly
authorized by necessary action, require no action by or in respect of, or filing
with, any court or agency of government and do not violate or constitute a
default under any provision of any applicable law or other agreements binding
upon Borrower or result in the creation or imposition of any Lien upon any of
the assets of Borrower except for Permitted Liens and otherwise as permitted in
the Credit Agreement.
     4.3 Enforceability. This Amendment constitutes the valid and binding
obligation of Borrower enforceable in accordance with its terms, except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditor’s rights generally, and (ii) the availability of
equitable remedies may be limited by equitable principles of general
application.
SECTION 5. Miscellaneous.
     5.1 Reaffirmation of Loan Documents and Liens. Any and all of the terms and
provisions of the Credit Agreement and the Loan Documents shall, except as
amended and modified hereby, remain in full force and effect. Borrower hereby
agrees that the amendments and modifications herein contained shall in no manner
affect or impair the liabilities, duties and obligations of Borrower under the
Credit Agreement and the other Loan Documents or the Liens securing the payment
and performance thereof.
     5.2 Parties in Interest. All of the terms and provisions of this Amendment
shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns.
     5.3 Legal Expenses. Borrower hereby agrees to pay all reasonable fees and
expenses of special counsel to the Administrative Agent incurred by the
Administrative Agent in connection with the preparation, negotiation and
execution of this Amendment and all related documents.
     5.4 Counterparts. This Amendment may be executed in one or more
counterparts and by different parties hereto in separate counterparts each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. However, this Amendment shall bind no party until Borrower,
the Lenders, and the Administrative Agent have executed a counterpart. Delivery
of photocopies of the signature pages to this Amendment by facsimile or
electronic mail shall be effective as delivery of manually executed counterparts
of this Amendment.
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     5.5 Complete Agreement. THIS AMENDMENT, THE CREDIT AGREEMENT, AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
     5.6 Headings. The headings, captions and arrangements used in this
Amendment are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify or modify the terms of this Amendment, nor affect the
meaning thereof.
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     IN WITNESS WHEREOF, the parties have caused the Second Amendment to Credit
Agreement to be duly executed by their respective authorized officers to be
effective as of the date first above written.

                  BORROWER:    
 
                CARRIZO OIL & GAS, INC.    
 
           
 
  By:   /s/ Paul F. Boling    
 
                Name: Paul F. Boling         Title:   Vice President and Chief
Financial Officer    
 
                GUARANTORS:    
 
                CCBM, INC.    
 
           
 
  By:   /s/ Paul F. Boling    
 
                Name: Paul F. Boling         Title:   Vice President    
 
                CLLR, INC.    
 
           
 
  By:   /s/ Paul F. Boling    
 
                Name: Paul F. Boling         Title:   Vice President    
 
                ADMINISTRATIVE AGENT AND LENDER:           JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION, individually and as Administrative Agent    
 
           
 
  By:   /s/ Kimberly A. Coil    
 
           
 
  Name: Kimberly A. Coil    
 
  Title:   Vice President    

Second Amendment to Credit Agreement
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                  GUARANTY BANK         as a Lender    
 
           
 
  By:   /s/ Kelly L. Elmore III    
 
           
 
  Name:   Kelly L. Elmore III    
 
  Title:   Senior Vice President    

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SCHEDULE 2.01
Applicable Percentages And Commitments

                                              Applicable           Maximum
Lender   Title   Percentage   Commitment1   Facility Amount
JPMorgan Chase Bank,

  Administrative Agent     55.555556 %   $ 65,000,000     $ 111,111,112  
National Association
10 SouthDearborn, Fl 7
Mail Code IL1-0010
Chicago, Illinois 60603-2003
Attention: Marlene Zanoria
Telephone: (312) 385-7071
Facsimile: (312) 385-7096
marlene.e.zanoria@jpmchase.com

                               
 
                               
With a copy to:

JPMorgan Chase Bank, N.A.
712 Main Street
8th Floor, South
Houston, Texas 77002
Attention: Jo Linda Papadakis
Telephone: (713) 216-7743
Facsimile: (713) 216-7770
jo.l.papadakis@jpmorgan.com
                               
 
                               
Guaranty Bank

            44.444444 %   $ 52,000,000     $ 88,888,888  
333 Clay Street
Suite 4400
Houston, TX 77002
Attention: Kelly L. Elmore III
Telephone: (713) 890-8849
Facsimile: (713) 890-8868
kelly.elmore@guarantybank.com
                               
 
                               
TOTAL
            100.00000 %   $ 117,000,000     $ 200,000,000  

 

1   As of the Second Amendment Effective Date and subject to adjustment as a
result of changes in the Borrowing Base.

Second Amendment to Credit Agreement