Exhibit 10.1
 
EXECUTION VERSION
 
FIFTH AMENDMENT TO CREDIT AGREEMENT
 
FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) executed to be effective
as of June 11, 2008, 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 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 (i)
increase the Borrowing Base and the Conforming Borrowing Base and (ii) amend the
Credit Agreement as provided herein; 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, 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 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 Definition.  The following definition shall be and it
hereby is added to Section 1.01 of the Credit Agreement in appropriate
alphabetical order:
 
“Fifth Amendment Effective Date” means June 11, 2008.
 
1.2           Amended Definition.  The following definition in Section 1.01 of
the Credit Agreement shall be and it hereby is amended in its entirety to read
as follows:
 
“Initial Borrowing Base” means $40,000,000.
 
1.3           Reserve Report; Proposed Borrowing Base; Conforming Borrowing
Base.  Section 3.01 of the Credit Agreement shall be and it hereby is amended in
its entirety to read as follows:
 
Section 3.01.  Reserve Report; Proposed Borrowing Base; Conforming Borrowing
Base.  During the period from the Fifth Amendment Effective Date
 

 
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until the first Redetermination after the Fifth Amendment Effective Date, the
Borrowing Base shall be $165,000,000 and the Conforming Borrowing Base shall be
$140,000,000.  As soon as available and in any event by April 1 and October 1 of
each year, beginning October 1, 2008, the Borrower shall deliver to the
Administrative Agent and each Lender a Reserve Report, prepared as of the
immediately preceding December 31 and June 30, respectively, in form and
substance reasonably satisfactory to the Administrative Agent and prepared by an
Approved Petroleum Engineer (or, in the case of any Reserve Report other than
the Reserve Report due on April 1 of each year, by petroleum engineers employed
by the Borrower or its Subsidiaries) together with such other information,
reports and data concerning the value of the Borrowing Base Properties as the
Administrative Agent shall deem reasonably necessary to determine the value of
such Borrowing Base Properties.  Simultaneously with the delivery to the
Administrative Agent and the Lenders of each Reserve Report, the Borrower shall
submit to the Administrative Agent and each Lender the Borrower’s requested
amount of the Borrowing Base as of the next Redetermination Date.  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.
 
1.4           Potential Monthly Reductions and Other Adjustments.  Clause (c) of
Section 3.05 of the Credit Agreement shall be and it hereby is amended in its
entirety to read as follows:
 
(c)           In the event the outstanding principal balance of the Indebtedness
under the Convertible Notes Indenture (or any Permitted Refinancing thereof)
exceeds $373,750,000 at any time, 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.
 
1.5           Financial Statements; Other Information.  Clause (e) of Section
6.01 of the Credit Agreement shall be and it hereby is amended in its entirety
to read as follows:
 
(e)           as soon as available, and in any event no later than April 1 and
October 1 of each year, the Reserve Reports required on such dates pursuant
to Section 3.01;
 
1.6           Investments, Loans, Advances, Guarantees and Acquisitions.  Clause
(o) of Section 7.05 of the Credit Agreement shall be and it hereby is amended in
its entirety to read as follows:
 
(o)           investments made with up to 50% of the cash proceeds of any
issuance of common Equity Securities of Borrower; provided that, with respect to
each investment made pursuant to this clause (o), (i) such investment is made
 

 
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within 150 days after the date of the equity issuance the proceeds of which are
being used to make such investment, (ii) at the time such investment is made, no
Default or Event of Default shall have occurred and be continuing or be caused
by such investment and (iii) before and after giving effect to such investment,
Borrowing Base Usage (calculated by using the Borrowing Base rather than the
Conforming Borrowing Base, at any time prior to the Conforming Date) is not
greater than 75%;
 
1.7           Investments, Loans, Advances, Guarantees and Acquisitions.  Clause
(p) of Section 7.05 of the Credit Agreement shall be and it hereby is amended in
its entirety to read as follows:
 
(p)           investments in an aggregate amount not to exceed $15,000,000 at
any time outstanding made at any time prior to March 31, 2009 from the cash
proceeds of the equity issuance made by Borrower on or about February 15, 2008;
provided that, with respect to each investment made pursuant to this clause (p),
(i) at the time such investment is made, no Default or Event of Default shall
have occurred and be continuing or be caused by such investment and (ii) before
and after giving effect to such investment, Borrowing Base Usage (calculated by
using the Borrowing Base rather than the Conforming Borrowing Base, at any time
prior to the Conforming Date) is not greater than 75%.; and
 
1.8           Investments, Loans, Advances, Guarantees and
Acquisitions.  Section 7.05 of the Credit Agreement shall be and it hereby is
amended by adding a new clause (q) to the end thereof to read as follows:
 
(q)           any other investments in any Person in an aggregate amount not to
exceed $50,000,000 at any time outstanding; provided that, with respect to each
investment made pursuant to this clause (q), (i) immediately after giving effect
to such investment, the total outstanding amount of investments made pursuant to
this clause (q) with the proceeds of Loans shall not exceed $40,000,000, (ii) at
the time such investment is made, no Default or Event of Default shall have
occurred and be continuing or be caused by such investment and (iii) before and
after giving effect to such investment, Borrowing Base Usage (calculated by
using the Borrowing Base rather than the Conforming Borrowing Base, at any time
prior to the Conforming Date) is not greater than 75%.
 
1.9           Investments, Loans, Advances, Guarantees and
Acquisitions.  Section 7.05 of the Credit Agreement shall be and it hereby is
amended by adding a new paragraph following clause (q) to read as follows:
 
The amount of any investment made pursuant to clauses (o), (p) and (q) of this
Section 7.05 shall be the original cost of such investment plus the cost of all
additions thereto, minus the amount of any portion of such investment repaid to
the Person making such investment as a dividend, repayment of loan or advance,
return of capital or transfer of property, as the case may be, but without any
other adjustments for increases or decreases in value, or write-ups, write-downs
or
 

 
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 write-offs with respect to such investment or interest earned on such
investment.  In determining the amount of any investment involving a transfer of
property other than cash, such property shall be valued at its fair market value
at the time of such transfer; provided that in the case of investments involving
a transfer of property other than cash that are repaid to the Person making such
investment as a transfer of property, such property at the time of repayment
shall be valued at its fair market value at the time such property was initially
transferred by the Person making such investment.
 
1.10           Notices.  Subclauses (i) and (ii) of Section 11.01(a) of the
Credit Agreement shall be and they hereby are amended in their respective
entireties to read as follows:
 
(i)           if to the Borrower, to Carrizo Oil & Gas, Inc., 1000 Louisiana
Street, Suite 1500, Houston, Texas 77002, Attention:  Chief Financial Officer;
 
(ii)           if to the Administrative Agent or Issuing Bank, to JPMorgan Chase
Bank, N.A., 10 South Dearborn, Floor 17, Mail Code IL1-0010, Chicago, Illinois,
60603-2003, Telecopy No.: (312) 385-7096, Attention:  Marlene Zanoria, with a
copy to JPMorgan Chase Bank, N.A., 712 Main Street, 8th Floor South, Houston,
Texas  77002, Attention:  Jo Linda Papadakis, Vice President, Telecopy
Number:  (713) 216-7770;
 
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.
 
SECTION 2.  New Lenders and Reallocation of Commitments and Loans.  The Lenders
have agreed among themselves to reallocate their respective Applicable
Percentages of the Aggregate Commitment and to, among other things, allow
certain financial institutions identified by J.P. Morgan Securities, Inc., in
its capacity as Lead Arranger, in consultation with Borrower, to become a party
to the Credit Agreement as a Lender (each, a “New Lender”) by acquiring an
interest in the Aggregate Commitment.  Administrative Agent and Borrower hereby
consent to such reallocation and to each New Lender’s acquisition of an interest
in the Aggregate Commitment.  On the Fifth Amendment Effective Date and after
giving effect to such reallocation of the Aggregate Commitment, the Applicable
Percentage of each Lender shall be as set forth on Schedule 2.01 of this
Amendment.  With respect to such reallocation, each New Lender shall be deemed
to have acquired its Commitment from each of the other Lenders pursuant to the
terms of the Assignment and Assumption attached as Exhibit A to the Credit
Agreement as if such New Lender and the other Lenders had executed an Assignment
and Assumption with respect to such allocation.  Borrower and Administrative
Agent hereby consent to such assignment to the New Lenders.
 
SECTION 3.  Conditions.  The amendments to the Credit Agreement contained in
Section 1 of this Amendment and the assignment and reallocation 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
the New Lenders, and the Administrative Agent shall have executed and delivered
this Amendment.
 

 
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3.2           No Default.  No Default shall have occurred and be continuing or
shall result from the effectiveness of this Amendment.
 
3.3           Fees.  Borrower shall have paid to the Lead Arranger and to the
Administrative Agent, for the benefit of the Lenders (including the New
Lenders), fees payable in the amounts and at the times separately agreed upon
among the Lead Arranger, the Administrative Agent and Borrower.
 
3.4           Note.  Borrower shall have executed and delivered a promissory
note to each New Lender that has requested a promissory note in accordance with
Section 2.08(e) of the Credit Agreement.
 
3.5           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 prior to the date hereof, 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, each Credit Party hereby represents and warrants
to the Lenders as follows:
 
4.1           Reaffirmation of Representations and Warranties/Further
Assurances.  After giving effect to the amendments herein, each representation
and warranty of such Credit Party contained in the Credit Agreement or in any of
the other Loan Documents is true and correct in all material respects as of the
Fifth 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 such Credit Party (to the extent a party hereto or thereto) of
this Amendment and all documents, instruments and agreements contemplated herein
are within such Credit Party’s corporate or other organizational powers, have
been duly authorized by all 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 such Credit Party or result in the creation or
imposition of any Lien upon any of the assets of such Credit Party except for
Permitted Liens and otherwise as permitted in the Credit Agreement.
 
4.3           Enforceability.  This Amendment constitutes the valid and binding
obligation of such Credit Party 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.  Each
Credit Party hereby agrees that the
 

 
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amendments and modifications herein contained shall in no manner affect or
impair the liabilities, duties and obligations of such Credit Party 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 Guarantors, 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.
 
5.5           Complete Agreement.  THIS AMENDMENT, THE CREDIT AGREEMENT, AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG 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.
 
5.7           Governing Law.  This Amendment shall be construed in accordance
with and governed by the law of the State of Texas.
 
 
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IN WITNESS WHEREOF, the parties have caused this Amendment 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          

 
 

  HONDO PIPELINE, INC.          
 
By:
/s/Paul F. Boling     Name: Paul F. Boling     Title: Vice President          

 

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ADMINISTRATIVE AGENT AND LENDER:
          JPMORGAN CHASE BANK, NATIONAL     ASSOCIATION, individually and as
Administrative Agent          
 
By:
/s/Kimberly Coil     Name: Kimberly Coil     Title: Vice President          

 
 

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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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  BANK OF SCOTLAND PLC, as a Lender          
 
By:
/s/Julia R. Franklin     Name: Julia R. Franklin     Title: Assistant Vice
President          

 
 

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  U.S. BANK NATIONAL ASSOCIATION, as a Lender          
 
By:
/s/Justin M. Alexander     Name: Justin M. Alexander     Title: Vice President  
       

 
 

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  CREDIT SUISSE, Cayman Islands Branch, as a Lender          
 
By:
/s/Vanessa Gomez     Name: Vanessa Gomez     Title: Director             By:
 /s/Nupur Kumar     Name:  Nupur Kumar     Title:  Associate  

 
 

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  FORTIS CAPITAL CORP., as a Lender          
 
By:
/s/Michele Jones     Name: Michele Jones     Title: Director             By:
 /s/Ilene Fowler     Name:  Ilene Fowler     Title:  Director  

 

 
 

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SCHEDULE 2.01
 
APPLICABLE PERCENTAGES AND COMMITMENTS
 
Lender
Title
Applicable Percentage
Commitment1
Maximum
Facility Amount
JPMorgan Chase Bank ,
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, TX  77002
Attention:  Jo Linda Papadakis
Telephone: (713) 216-7743
Facsimile: (713) 216-7770
jo.l.papadakis@jpmorgan.com
Administrative Agent
24.2424242%
$40,000,000.00
$48,484,848.485
Guaranty Bank
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
 
24.2424242%
$40,000,000.00
$48,484,848.485

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

 
 

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Bank of Scotland plc
One City Centre
1021 Main Street, Suite 1370
Houston, TX  77002
Attention: Richard Butler
Telephone: (713) 650-0609
Facsimile: (713) 651-9714
RichardButler@bankofscotlandusa.com
With a copy to:
 
Bank of Scotland plc, New York Office
565 Fifth Avenue, 5th Floor
New York, NY  10017
Telephone:  (212) 450-0877/0809
Facsimile:  (212) 479-2806
KarenWeich@bankofscotlandusa.com
 
15.1515152%
$25,000,000.00
$30,303,030.303
U.S. Bank National Association
950 17th St., DNCOT8E
Denver, CO  80202
Attention:  Justin M. Alexander
Telephone:  (303) 585-4201
Facsimile:  (303) 585-4362
justin.alexander@usbank.com
 
With a copy to:
 
U.S. Bank
555 SW Oak, PDORP7LS
Attention:  Tony Wong
Telephone:  (503) 275-3252
Facsimile:  (503) 973-6900
tony.wong@usbank.com
 
15.1515152%
$25,000,000.00
$30,303,030.303

 
 

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Credit Suisse
Eleven Madison Avenue
New York, New York  10010
Attention: Vanessa Gomez
Telephone: (212) 538-2993
Facsimile: (212) 448-3755
Vanessa.gomez@credit-suisse.com
 
With a copy to:
 
Credit Suisse
One Madison Avenue
New York, New York  10010
Attention: Loan Closers
Telephone: (212) 325-9041
Facsimile: (212) 538-9120
loan.closers@credit-suisse.com
 
10.6060606%
$17,500,000.00
$21,212,121.212
Fortis Capital Corp.
15455 North Dallas Parkway
Suite 1400
Addison, TX  75001
Attention: Michele Jones
Telephone: (214) 953-9303
Facsimile: (214)754-5982
Michele.jones@us.fortis.com
 
 
10.6060606%
$17,500,000.00
$21,212,121.212
TOTAL
 
100.00%
$165,000,000.00
$200,000,000.00

 
 
 

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