EXHIBIT 10.2
COMMERCIAL GUARANTY
COMMERCIAL GUARANTY (this "Agreement") made and entered into as of
September 30, 2004 by CCBM, Inc., a Delaware corporation (hereinafter referred
to as "Guarantor"), in favor of Hibernia National Bank, a national banking
association, as Agent for itself and each of the financial institutions (the
"Lenders") which now or hereafter become a party to that certain Credit
Agreement (as defined below), guarantying the Indebtedness (as defined below) of
CARRIZO OIL & GAS, INC., a Texas corporation (hereinafter referred to as
"Borrower").
WITNESSETH:
FOR VALUE RECEIVED, and in consideration of and for credit and
financial accommodations extended, to be extended, or continued to or for the
account of the above named Borrower, the undersigned Guarantor, hereby jointly,
severally and solidarily, agrees as follows:
SECTION 1. CONTINUING GUARANTY OF BORROWER'S INDEBTEDNESS. Guarantor
hereby absolutely and unconditionally agrees to, and by these presents does
hereby, guarantee the prompt and punctual payment, performance and satisfaction
of any and all loans, extensions of credit and/or other obligations that
Borrower may now and/or in the future owe to and/or incur in favor of Lender
under or pursuant to that certain Second Amended and Restated Credit Agreement
dated of even date herewith, by and among Borrower, Guarantor, the Agent, and
Lenders, as the same may be amended and/or restated from time to time and in
effect (the "Credit Agreement"), including the indebtedness of Borrower
evidenced by certain Notes dated of even date herewith, in the maximum aggregate
principal amount of $100,000,000.00, executed by Borrower pursuant to the Credit
Agreement, and any and all renewals, extensions, substitutions, modifications
and replacements of said Notes from time to time and in effect, and whether such
indebtedness and/or obligations are absolute or contingent, liquidated or
unliquidated, due or to become due, secured or unsecured, and whether now
existing or hereafter arising, of any nature or kind whatsoever, up to a maximum
principal amount outstanding at any one or more times not to exceed ONE HUNDRED
MILLION AND NO/100 DOLLARS (U.S. $100,000,000.00), together with interest, costs
and attorneys' fees thereon (with all of Borrower's indebtedness and/or
obligations being hereinafter individually and collectively referred to under
this Agreement as "Borrower's Indebtedness" or the "Indebtedness").
SECTION 2. LIMITATION ON LIABILITY. The liability of Guarantor
hereunder with respect to the Indebtedness shall be limited to the maximum
amount of liability that can be incurred without rendering this Commercial
Guaranty, as it relates to Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount.
SECTION 3. JOINT, SEVERAL AND SOLIDARITY LIABILITY. Guarantor further
agrees that its obligations and liabilities for the prompt and punctual payment,
performance and satisfaction of all of Borrower's Indebtedness shall be on a
"joint and several" and "solidary"
basis along with Borrower to the same degree and extent as if Guarantor had been
and/or will be a co-borrower, co-principal obligor and/or co-maker of all of
Borrower's Indebtedness. In the event that there is more than one guarantor
under this Agreement, or in the event that there are other guarantors, endorsers
or sureties of all or any portion of Borrower's Indebtedness, Guarantor's
obligations and liabilities hereunder shall be on a "joint and several" and
"solidary" basis along with such other guarantor or guarantors, endorsers and/or
sureties.
SECTION 4. DURATION; CANCELLATION OF AGREEMENT. This Agreement and
Guarantor's obligations and liabilities hereunder shall remain in full force and
effect until such time as each and every Indebtedness of Borrower shall be paid,
performed and/or satisfied in full, in principal, interest, costs and attorneys'
fees, or until such time as this Agreement may be cancelled or otherwise
terminated by Agent under a written cancellation instrument in favor of
Guarantor (subject to the automatic reinstatement provision hereinbelow). Unless
otherwise indicated under such a written cancellation instrument, Agent's
agreement to terminate or otherwise cancel this Agreement shall only effect and
shall be expressly limited to Guarantor's continuing obligations and liabilities
to guarantee the prompt and punctual payment, performance and satisfaction of
Borrower's Indebtedness incurred, originated and/or extended or committed to by
Agent and/or Lenders after the date of such a written cancellation instrument;
with Guarantor remaining fully obligated and liable under this Agreement for the
prompt and punctual payment, performance and satisfaction of any and all of
Borrower's then outstanding Indebtedness together with continuing assessment of
interest thereon) that was incurred, originated, extended or committed to prior
to the date of such a written cancellation instrument. Nothing under this
Agreement or under any other agreement or understanding by and between
Guarantor, Agent, and Lenders, shall in any way obligate, or be construed to
obligate, Agent and/or Lenders to agree to the subsequent termination or
cancellation of Guarantor's obligations and liabilities hereunder, it being
fully understood and agreed by Guarantor that Agent and/or Lenders may, within
their sole and uncontrolled discretion and judgment, refuse to release Guarantor
from any of its obligations and liabilities under this Agreement for any reason
whatsoever as long as any of Borrower's Indebtedness remains unpaid and
outstanding.
SECTION 5. DEFAULT OF BORROWER. Upon the occurrence of an Event of
Default as provided in the Credit Agreement, Guarantor unconditionally and
absolutely agrees to pay in full the then unpaid amount of all of Borrower's
Indebtedness guaranteed hereunder, in principal interest, costs and reasonable
attorneys' fees. Such payment or payments shall be made immediately following
demand by Agent at its offices at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx
00000. Other than the demand referred to in the immediately preceding sentence,
Guarantor hereby waives notice of acceptance of this Agreement and of any
Indebtedness to which it applies or may apply. Guarantor further waives
presentation and demand for payment of Borrower's Indebtedness, notice of
dishonor and of nonpayment, notice of intention to accelerate, notice of
acceleration, protest and notice of protest, collection or institution of any
suit or other action by Agent in collection thereof, including any notice of
default in payment thereof or other notice to, or demand for payment thereof on
any party. Guarantor additionally waives any and all rights and pleas of
division and discussion as provided under Louisiana law, as well as, to the
degree applicable, any similar rights as may be provided under the laws of any
other state.
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SECTION 6. GUARANTOR'S SUBORDINATION OF RIGHTS TO LENDERS. In the
event that Guarantor should for any reason (i) make any payment for and on
behalf of Borrower under any of Borrower's Indebtedness, and/or (ii) make any
payments to Agent and/or Lenders in total or partial satisfaction of Guarantor's
obligations and liabilities hereunder, Guarantor hereby agrees that any and all
rights that Guarantor may have or acquire to collect or to be reimbursed by
Borrower (or by any guarantor, endorser or surety of Borrower's Indebtedness),
whether Guarantor's rights of collection or reimbursement arise by way of
subrogation to the rights of Lenders or otherwise, shall in all respects be
subordinate, inferior and junior to Agent's and/or Lenders' rights to collect
and enforce payment, performance and satisfaction of Borrower's then remaining
Indebtedness, until such time as all of Borrower's Indebtedness is fully paid
and satisfied. Upon the occurrence and continuance of an Event of Default (as
defined in the Credit Agreement) any and all amounts owed by Borrower to
Guarantor shall in all respects be subordinate, inferior and junior to Agent's
and/or Lenders' rights to collect and enforce payment, performance and
satisfaction of Borrower's then remaining Indebtedness, until such time as all
of Borrower's Indebtedness is fully paid and satisfied. Guarantor further agrees
to refrain from attempting to collect and/or enforce any of Guarantor's
aforesaid rights against Borrower (or any other guarantor, surety or endorser of
Borrower's Indebtedness), arising by way of subrogation or otherwise, until such
time as all of Borrower's then remaining Indebtedness in favor of Lenders is
fully paid and satisfied, in principal, interest, costs and attorneys' fees.
SECTION 7. ADDITIONAL COVENANTS. Guarantor further agrees that Agent
and/or Lenders may, at its/their sole option, at any time, and from time to
time, without the consent of or notice to Guarantor, or to any other party, and
without incurring any responsibility to Guarantor or to any other party (other
than the Borrower to the extent provided in the Loan Documents as such term is
defined in the Credit Agreement), and without impairing or releasing the
obligations of Guarantor under this Agreement
(A) Discharge or release any party (including, but not limited
to, Borrower or any guarantor under this Agreement) who is or may be liable to
Agent and/or Lenders for any of Borrower's Indebtedness;
(B) Sell, exchange, release, surrender, realize upon or otherwise
deal with, in any manner and in any order, any collateral directly or indirectly
securing repayment of any of Borrower's Indebtedness;
(C) Change the manner, place or terms of payment, or change or
extend the time of payment of or renew, as often and for such periods as Agent
and/or Lenders may determine, or after, any of Borrower's Indebtedness;
(D) Settle or compromise any of Borrower's Indebtedness;
(E) Subordinate and/or agree to subordinate the payment of all or
any of Borrower's Indebtedness or Agent's and/or Lenders' security rights in
and/or to any collateral directly or indirectly securing any such indebtedness,
to the payment and/or security rights of any other present and/or future
creditors of Borrower;
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(F) Apply any sums paid to any of Borrower's Indebtedness, with
such payments being applied in such priority or with such preferences as Agent
and/or Lenders may determine in its/their sole discretion, regardless of what
Indebtedness of Borrower remains unpaid;
(G) Take or accept any other security for any or all of
Borrower's Indebtedness; and/or
(H) Enter into, deliver, modify, amend or waive compliance with,
any instrument or arrangement (other than this Agreement) evidencing, securing
or otherwise affecting, all or any part of Borrower's Indebtedness.
In addition, no course of dealing between Agent and Borrower,
and/or the Lenders and Borrower (or any other guarantor, surety or endorser of
Borrower's Indebtedness), nor any failure or delay on the part of Agent and/or
Lenders to exercise any of its/their rights and remedies, or any other agreement
or agreements by and between Agent and Borrower and/or Lenders and Borrower (or
any other guarantor, surety or endorser) shall have the affect of impairing or
releasing Guarantor's obligations and liabilities to Agent and Lenders or of
waiving any of Agent's and/or Lenders' rights and remedies. Any partial exercise
of any rights and remedies granted to Agent and/or Lenders shall furthermore not
constitute a waiver of any of Agent's and/or Lenders' other rights and remedies,
it being Guarantor's intent and agreement that Agent's and Lenders' rights and
remedies shall be cumulative in nature. Guarantor further agrees that, should
Borrower default under any of its Indebtedness, any waiver or forbearance on the
part of Agent and/or Lenders to pursue the rights and remedies available to
Agent shall be binding upon Agent and Lenders only to the extent that Lenders
specifically agree to such waiver or forbearance in writing. A waiver or
forbearance on the part of Agent and/or Lenders as to one event of default shall
not constitute a waiver of forbearance as to any other default.
SECTION 8. NO RELEASE OF GUARANTOR. Guarantor's obligations and
liabilities under this Agreement shall not be released, impaired, reduced or
otherwise affected by, and shall continue in full force and effect,
notwithstanding the occurrence of any event (other than performance hereunder),
including without limitation any one of the following events:
(A) Insolvency, bankruptcy, arrangement, adjustment, composition,
liquidation, disability, dissolution or lack of authority (whether corporate,
partnership or trust) of Borrower (or any person acting on Borrower's behalf),
or any other guarantor, surety or endorser of any of Borrower's Indebtedness;
(B) Partial payment or payments of any amount due and/or
outstanding under any of Borrower's Indebtedness;
(C) Any payment of Borrower or any other party to Agent is held
to constitute a preferential transfer or a fraudulent conveyance under any
applicable law, or for any reason, Agent and/or Lenders are required to refund
such payment or pay such amount to Borrower or to any other person;
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(D) Any dissolution of Borrower or any sale, lease or transfer of
all or any part of Borrower's assets; and/or
(E) Any failure of Agent to notify Guarantor of the acceptance of
this Agreement or of the making of loans or other extensions of credit in
reliance on this Agreement or of the failure of Borrower to make any payment due
by Borrower to Agent.
(F) Apply any sums paid to any of Borrower's Indebtedness, with
such payments being applied in such priority or with such preferences as Agent
and/or Lenders may determine in its/their own discretion, regardless of what
Indebtedness of Borrower remains unpaid;
(G) Take or accept any other security for any or all of
Borrower's Indebtedness; and/or
(H) Enter into, deliver, modify, amend or waive compliance with,
any instrument or arrangement evidencing, securing or otherwise affecting, all
or any part of Borrower's Indebtedness.
This Agreement and Guarantor's obligations and liabilities
hereunder shall continue to be effective, and/or shall automatically and
retroactively be reinstated if a release or discharge has occurred, as the case
may be, if at any time any payment or part thereof to Agent with respect to any
of Borrower's Indebtedness is rescinded or must otherwise be restored by Agent
and/or Lenders pursuant to any insolvency, bankruptcy, reorganization,
receivership, or any other debt relief granted to Borrower or to any other
party. In the event that Agent and/or Lenders must rescind or restore any
payment received by Agent and/or Lenders in satisfaction of Borrower's
Indebtedness, any prior release or discharge from the terms of this Agreement
given to Guarantor shall be without effect, and this Agreement and Guarantor's
obligations and liabilities hereunder shall automatically be renewed or
reinstated and shall remain in full force and effect to the same degree and
extent as if such a release or discharge was never granted. It is the intention
of Agent, Lenders and Guarantor that Guarantor's obligations and liabilities
hereunder shall not be discharged except by Guarantor's full and complete
performance of such obligations and liabilities and then only to the extent of
such performance.
SECTION 9. ENFORCEMENT OF GUARANTOR'S OBLIGATIONS AND LIABILITIES.
Guarantor agrees that, should Agent and/or Lenders deem it necessary to file an
appropriate collection action to enforce Guarantor's obligations and liabilities
under this Agreement, Agent may commence such a civil action against Guarantor
without the necessity of first (i) attempting to collect Borrower's Indebtedness
from Borrower or from any other guarantor, surety or endorser, whether through
filing of suit or otherwise, (ii) attempting to exercise against any collateral
directly or indirectly securing repayment of any of Borrower's Indebtedness,
whether through the filing of an appropriate foreclosure action or otherwise, or
(iii) including Borrower or any other guarantor, surety or endorser of any of
Borrower's Indebtedness as an additional party defendant in such a collection
action against Guarantor. In the event that Agent should ever deem it necessary
to refer this Agreement to an attorney-at-law for the purpose of enforcing
Guarantor obligations and liabilities hereunder, or of protecting or preserving
Agent's and/or
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Lenders' rights hereunder, Guarantor (on a joint, several and solidary basis)
agrees to reimburse Agent and/or Lenders for the reasonable fees of such an
attorney. Guarantor additionally agrees that Agent and/or Lenders shall not be
liable for failure to use diligence in the collection of any of Borrower's
Indebtedness or any collateral security therefor, or in creating or preserving
the liability of any person liable on any such Indebtedness, or in creating,
perfecting or preserving any security for any such Indebtedness.
SECTION 10. ADDITIONAL DOCUMENTS. Upon the reasonable request of
Agent, Guarantor will, at any time, and from time to time, duly execute and
deliver to Lender any and all such further instruments and documents, and supply
such additional information as may be reasonably necessary or advisable in the
opinion of Agent, to obtain the full benefits of this Agreement.
SECTION 11. TRANSFER OF INDEBTEDNESS. This agreement is for the
benefit of Lenders and for such other person or persons as may from time to time
become or be the holders of any of Borrower's Indebtedness hereby guaranteed and
this Agreement shall be transferable and negotiable, with the same force and
effect and to the same extent as Borrower's Indebtedness may be transferable
under Sections 16.7, 16.8, and 16.9 of the Credit Agreement, it being understood
that, upon the transfer or assignment by Lenders of any of Borrower's
Indebtedness hereby guaranteed, the legal holder of such Indebtedness shall have
all the rights granted to Lenders under this Agreement.
Guarantor hereby recognizes and agrees that Lenders may, from time to
time, one or more times, transfer all or any portion of Borrower's Indebtedness
to one or more third parties. Such transfers may include, but are not limited
to, sales of a participation or syndication interest in such Indebtedness in
favor of one or more third parties in accordance with Sections 16.7 and/or 16.8
of the Credit Agreement. Guarantor specifically agrees and consents to all such
transfers and assignments in accordance with Sections 16.7, 16.8, and/or 16.9 of
the Credit Agreement and Guarantor further waives any subsequent notice of and
right to consent to any such transfers and assignments as may be provided under
applicable Louisiana law. Guarantor additionally agrees that the purchaser of a
syndication interest in Borrower's Indebtedness will be considered as the
absolute owner of an interest in, or a percentage interest of, such Indebtedness
and that such a purchaser shall have all of the rights granted to the purchaser
under any agreement governing the sale of such a syndication interest and all
rights of Lenders from whom the syndication interest was purchased under the
Credit Agreement. Guarantor further waives any right of offset that Guarantor
may have against Lenders and/or any purchaser of such a participation or
syndication interest in Borrower's Indebtedness and Guarantor unconditionally
agrees that either Lenders or such a purchaser may enforce Guarantor's
obligations and liabilities under this Agreement, irrespective of the failure or
insolvency of Lenders or any such purchaser. Guarantor further agrees that, upon
any transfer, in accordance with Sections 16.7 and 16.9 of the Credit Agreement,
of all or any portion of Borrower's Indebtedness, Lenders may transfer and
deliver any and all collateral securing repayment of such Indebtedness
including, but not limited to, any collateral provided by Guarantor) to the
transferee of such Indebtedness and such collateral (again, including but not
limited to Guarantor's collateral) shall secure any and all of Borrower's
Indebtedness in favor of such transferee. Guarantor additionally agrees that,
after any such transfer or assignment has taken place in accordance with
Sections 16.7. 16.8, and/or
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16.9 of the Credit Agreement, Lenders shall be fully discharged from any and all
liability and responsibility to Borrower (and Guarantor) with respect to such
collateral, and the transferee thereafter shall be vested with all the powers
and rights with respect to such collateral.
SECTION 12. RIGHT OF OFFSET. As collateral security for the repayment
of Guarantor's obligations and liabilities under this Agreement, Guarantor
hereby grants Lenders, as well as their successors and assigns, the right to
apply, upon the occurrence of an Event of Default under the Credit Agreement and
the expiration of any applicable grace period allowed to cure the Event of
Default, any and all funds that Guarantor may then have on deposit with or in
the possession or control of any Lender and its successors or assigns (with the
exception of funds deposited in XXX, pension or other tax-deferred deposit
accounts), towards repayment of any of Borrower's Indebtedness subject to this
Agreement.
SECTION 13. CONSTRUCTION. The provisions of this Agreement shall be in
addition to and cumulative of, and not in substitution, novation or discharge
of, any and all prior or contemporaneous guaranty or other agreements by
Guarantor, in favor of Agent or assigned to Agent by others, all of which shall
be construed as complementing each other. Nothing herein contained shall prevent
Agent from enforcing any and all such guaranties or agreements in accordance
with their respective terms.
SECTION 14. AMENDMENT. No amendment, modification, consent or waiver
of any provision of this Agreement, and no consent to any departure by Guarantor
therefrom, shall be effective unless the same shall be in writing signed by the
Agent, and then shall be effective only to the specific instance and for the
specific purpose for which given.
SECTION 15. SUCCESSORS AND ASSIGNS BOUND. Guarantor's obligations and
liabilities under this Agreement shall be binding upon Guarantor's successors,
heirs, legatees, devisees, administrator executors and assigns. The rights and
remedies granted to Agent and Lenders under this Agreement shall also inure to
the benefit of Agent's and Lenders' successors and assigns, as well as to any
and all subsequent holder or holders of any of Borrower's Indebtedness subject
to this Agreement.
SECTION 16. CAPTION HEADING. Caption headings of the section of this
Agreement are for convenience purposes only and are not to be used to interpret
or to define their provisions. In this Agreement, whenever the context so
requires, the singular includes the plural and the plural also includes the
singular.
SECTION 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF LOUISIANA.
SECTION 18. SEVERABILITY. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws effective
during the term hereof; such provision shall be fully severable, this Agreement
shall be construed and enforceable as if the illegal, invalid or unenforceable
provision had never comprised a part of it, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
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illegal, invalid or unenforceable provision or by its severance herefrom.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as a part of this Agreement, a provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible
and legal, valid and enforceable.
IN WITNESS WHEREOF, Guarantor has executed this Agreement in favor of
Agent for the ratable benefit of the Lenders on the day, month, and year first
written above.
GUARANTOR:
CCBM, INC.
a Delaware corporation
By:
Name:
Title:
