EXHIBIT 99.5
CARRIZO OIL & GAS, INC.,
A TEXAS CORPORATION
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REGISTRATION RIGHTS AGREEMENT
February 20, 2002
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TABLE OF CONTENTS
PAGE
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SECTION 1. CERTAIN DEFINITIONS..................................................................................1
SECTION 2. [INTENTIONALLY OMITTED]..............................................................................3
SECTION 3. [INTENTIONALLY OMITTED]..............................................................................3
SECTION 4. [INTENTIONALLY OMITTED]..............................................................................3
SECTION 5. REGISTRATION RIGHTS..................................................................................3
5.1. REQUESTED REGISTRATION..........................................................................3
5.2. COMPANY REGISTRATION............................................................................5
5.3. REGISTRATION ON FORM S-3........................................................................6
5.4. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS...................................................9
5.5. EXPENSES OF REGISTRATION........................................................................9
5.6. REGISTRATION PROCEDURES.........................................................................9
5.7. INDEMNIFICATION................................................................................11
5.8. CERTAIN AGREEMENTS OF HOLDERS..................................................................14
5.9. RULE 144 REPORTING.............................................................................15
5.10. TRANSFER OF REGISTRATION RIGHTS................................................................15
5.11. LOCKUP AGREEMENT...............................................................................16
5.12. TERMINATION OF REGISTRATION RIGHTS.............................................................16
SECTION 6. MISCELLANEOUS.......................................................................................16
6.1. GOVERNING LAW..................................................................................16
6.2. SUCCESSOR AND ASSIGNS..........................................................................16
6.3. EFFECTIVENESS..................................................................................17
6.4. ENTIRE AGREEMENT; AMENDMENT....................................................................17
6.5. NOTICES, ETC...................................................................................17
6.6. DELAYS OR OMISSIONS............................................................................17
6.7. SEVERABILITY...................................................................................18
6.8. TITLES AND SUBTITLES...........................................................................18
6.9. GENDER.........................................................................................18
6.10. COUNTERPARTS...................................................................................18
THIS
REGISTRATION RIGHTS AGREEMENT is entered into as of the
20th day of February, 2002 by and among CARRIZO OIL & GAS, INC., a
Texas
corporation (the "Company"), and the shareholders of the Company listed on Annex
A attached hereto (the "Purchasers").
Recitals
The Company is entering into a Securities Purchase Agreement
(the "Securities Purchase Agreement") dated as of the date hereof, with the
Purchasers pursuant to which the Company is issuing to the Purchasers (i) 60,000
shares of its Series B Convertible Preferred Stock (as defined below), and (ii)
Warrants (as defined below) to purchase 252,632 shares of Common Stock (as
defined below). In order to induce the Purchasers to enter into the Securities
Purchase Agreement, the Company wishes to grant registration rights to the
Purchasers as more fully set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, the parties hereby agree as follows:
Section 1. Certain Definitions.
As used in this Agreement, the following terms shall have the
following respective meanings:
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the common stock of the Company, par
value $.01 per share, and any other securities issued in respect of Common Stock
upon any stock split, stock dividend, recapitalization, merger, consolidation,
share exchange or similar event.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Holder" shall mean any Purchaser holding Registrable
Securities and any Person holding Registrable Securities to whom the rights
under this Agreement have been transferred in accordance with Section 5.10
hereof.
"Initiating Holders" shall mean any Holder(s) who in the
aggregate are Holders of not less than 51% of the then outstanding Sponsor
Registrable Securities.
"Person" means any individual, any foreign or domestic
corporation, general partnership, limited partnership, limited liability
company, firm, joint venture, association, individual retirement account, joint
stock company, trust, estate, unincorporated organization, governmental or
regulatory body or other entity.
"Registrable Securities" shall mean the shares of Common Stock
of the Company issuable (for purposes of clarity, "issuable" includes the shares
of Common Stock of the Company that are issuable upon the date hereof and are
issued subsequent to the date hereof) upon (a) the conversion of the Series B
Convertible Preferred Stock or (b) the exercise of the Warrants; provided,
however, that securities shall be treated as Registrable Securities only if and
only for so long as they are held by a Holder or a permitted transferee pursuant
to the terms hereof, and (i) they have not been disposed of pursuant to a
registration statement declared effective by the Commission, so that all
transfer restrictions and restrictive legends with respect thereto are removed
upon the consummation of such sale, or (ii) they have not been sold in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act, so that all transfer restrictions and restrictive legends
with respect thereto are removed upon the consummation of such sale, or (iii)
the registration rights as to the Holder of such Registrable Securities have not
expired pursuant to Section 5.12.
The terms "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, other than
Selling Expenses (as defined below), incurred by the Company in complying with
Section 5.1, 5.2 or 5.3 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company) and the reasonable fees and disbursements
of one counsel for all Holders.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
"Selling Expenses" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and, except as set forth above, all fees and
disbursements of counsel for any Holder.
"Series B Convertible Preferred Stock" means the Series B
Convertible Participating Preferred Stock, par value $0.01 per share, of the
Company, and any other securities issued in respect of the Series B Convertible
Participating Preferred Stock upon any stock split, stock dividend,
recapitalization, merger, consolidation, share exchange or similar event.
"Sponsor" shall mean Mellon Ventures, L.P.
"Sponsor Registrable Securities" shall mean the Registrable
Securities issuable upon conversion of the Series B Preferred Stock purchased by
the Sponsor and upon exercise of the Warrants issued to the Sponsor.
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"Warrant Agreement" shall mean the Warrant Agreement dated as
of the date hereof among the Company and the parties named therein.
"Warrants" has the meaning given to such term in the Warrant
Agreement.
Section 2. [Intentionally Omitted]
Section 3. [Intentionally Omitted]
Section 4. [Intentionally Omitted]
Section 5. Registration Rights.
5.1. Requested Registration.
(a) Request for Registration. In case the Company shall
receive from Initiating Holders a written request that the Company effect any
registration, qualification or compliance with respect to not less than 5% of
the shares of Sponsor Registrable Securities then outstanding, the Company will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its reasonable best
lawful efforts to effect such registration, qualification or compliance
(including, without limitation, appropriate qualification under
applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act
and any other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and distribution
of all or such portion of such Sponsor Registrable Securities as are
specified in such request, together with all or such portion of the
Sponsor Registrable Securities of any Holders joining in such request
as are specified in a written request received by the Company within 20
days after receipt of such written notice from the Company; provided,
however, that the Company shall not be obligated to take any action to
effect any such registration, qualification or compliance pursuant to
this Section 5.1:
(A) In any particular jurisdiction in which
the Company would be required to execute a general consent to
service of process in effecting such registration,
qualification or compliance unless the Company is already
subject to service in such jurisdiction and except as may be
required by the Securities Act;
(B) During the period starting with the date
sixty (60) days prior to the Company's estimated date of
filing of, and ending on the date three (3) months immediately
following the effective date of, a Company-initiated
registration statement pertaining to securities of the Company
(other than a registration of securities in a Rule 145
transaction or with respect to an employee benefit plan),
provided that the Company is actively employing in good faith
all
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reasonable efforts to cause such registration statement to
become effective (and provided, further, that the Company
cannot pursuant to this Section 5.1(a)(ii)(B) or pursuant to
Section 5.3(a)(ii)(B) delay implementation of a demand for
registration more than once in any 24-month period);
(C) After the Company has effected one
registration which may be effected at the option of the
Holders pursuant to either this Section 5.1(a) or Section
5.3(a), and such registration has been declared or ordered
effective; or
(D) If the Company shall furnish to such
Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of
Directors it would be seriously detrimental to the Company or
its shareholders for a registration statement to be filed in
the near future, then the Company's obligation to use its
reasonable best lawful efforts to register, qualify or comply
under this Section 5.1 shall be deferred once (with respect to
any demand for registration hereunder) for a period not to
exceed ninety (90) days from the date of receipt of written
request from the Initiating Holders, provided that the Company
cannot pursuant to this Section 5.1(a)(ii)(D) or pursuant to
Section 5.3(a)(ii)(D) delay implementation of a demand for
registration more than once in any 12-month period.
Subject to the foregoing clauses (A) through (D), the Company
shall file a registration statement covering the Registrable Securities so
requested to be registered as soon as practicable, after receipt of the request
or requests of the Initiating Holders.
(b) Underwriting. In the event that a registration pursuant to
Section 5.1 is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as part of the notice given pursuant to
Section 5.1(a)(i). In such event, the right of any Holder to registration
pursuant to Section 5.1 shall be conditioned upon such Holder's participation in
the underwriting arrangements required by this Section 5.1, and the inclusion of
such Holder's Registrable Securities, as the case may be, in the underwriting to
the extent requested shall be limited to the extent provided herein.
The Company shall (together with all Holders and other holders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by a majority in interest of the Initiating
Holders, but subject to the Company's reasonable approval. Notwithstanding any
other provision of this Section 5.1, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the underwriter may limit the Registrable Securities to be
included in such registration and underwriting (provided that securities of
other securityholders are not included therein). In the event of a limitation on
the number of Registrable Securities to be included in a registration, then the
Company shall so advise all Holders and the number of Registrable Securities
that may be included in the registration and underwriting shall be allocated
among all Holders thereof in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders. No
Registrable Securities excluded from the underwriting by reason of the
4
underwriter's marketing limitation shall be included in such registration. To
facilitate the allocation of Registrable Securities in accordance with the above
provisions, the Company or the underwriters may round the number of Registrable
Securities allocated to any Holder to the nearest 100 shares.
If any Holder of Registrable Securities disapproves of the
terms of the underwriting, such Person may elect to withdraw therefrom by
written notice to the Company, the managing underwriter and the Initiating
Holders. The Registrable Securities so withdrawn shall also be withdrawn from
registration, and such Registrable Securities shall not be transferred in a
public distribution prior to 180 days after the effective date of such
registration, or such other shorter period of time as the underwriters may
require.
(c) The Company shall not register securities for sale for its
own account in any registration requested pursuant to this Section 5.1 unless
permitted to do so by the written consent of Holders who hold at least 2/3 of
the Registrable Securities as to which registration has been requested or unless
the underwriter shall indicate in writing to the Initiating Holders that the
inclusion of the shares to be sold for the account of the Company will not
adversely affect the registration, the price of the shares to be sold and the
number of shares to be sold for the account of the Holders. The Company may not
cause any other registration of securities for sale for its own account (other
than a registration effected solely to implement an employee benefit plan or
stock option plan or a transaction contemplated by Rule 145 of the Commission)
to be initiated after a registration requested pursuant to Section 5.1 and to
become effective less than 90 days after the effective date of any registration
requested pursuant to Section 5.1.
5.2. Company Registration.
(a) Notice of Registration. If at any time or from time to
time the Company shall determine to register any of its securities, either for
its own account or the account of a security holder or holders, other than (x) a
registration relating solely to employee benefit plans, or (y) a registration
relating solely to a Commission Rule 145 transaction, the Company will:
(i) promptly give to each Holder written notice
thereof; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified
in a written request or requests, made within 20 days after receipt of
such written notice from the Company, by any Holder.
(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 5.2(a)(i). In such event the right of any Holder to
registration pursuant to Section 5.2 shall be conditioned upon such Holder's
participation in such underwriting, and the inclusion of Registrable Securities
in the underwriting shall be limited to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
5
form with the managing underwriter selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 5.2, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the underwriters may exclude some or
all Registrable Securities from such registration and underwriting (provided
that securities of other securityholders are similarly excluded) (although
securities to be sold by the Company need not be excluded under any provision of
this Section 5.2). In the event of a limitation (or elimination) on the number
of Registrable Securities and other securities to be included in a registration,
the Company shall so advise all Holders and any other holders requesting to
distribute their securities through such underwriting pursuant to piggy-back
registration rights and the number of Registrable Securities and other such
securities that may be included in the registration and underwriting shall
(except as set forth below) be allocated among all Holders thereof and such
other holders in proportion, as nearly as practicable, to the respective amounts
of securities requested to be included in such registration. To facilitate the
allocation of Registrable Securities in accordance with the above provisions,
the Company may round the number of Registrable Securities and other securities
allocated to any Holder or other holder to the nearest 100 shares. If any Holder
disapproves of the terms of any such underwriting, it may elect to withdraw
therefrom by written notice to the Company and the managing underwriter. Any
securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration, and shall not be transferred in a public distribution prior
to 180 days after the effective date of the registration statement relating
thereto, or such other shorter period of time as the underwriters may require.
Notwithstanding anything to the contrary in this Section 5.2, in the case of
registrations requested pursuant to Section 5.1 or 5.3 of both the
Registration
Rights Agreement dated December 15, 1999 by and among the Company and the
Purchasers listed therein (the "Chase Agreement") and the
Registration Rights
Agreement dated as of June 4, 1997 as amended by Amendment No. 1 dated as of
December 15, 1999, among the Company and the Purchasers listed therein (the
"Founders Agreement", and, together with the Chase Agreement, the "Prior
Agreements"), the Holders may participate in any such registration only in
respect of that portion of any such registration as remains after inclusion of
all Registrable Securities (as defined in the Prior Agreements) requested by the
Holders (as defined in the Prior Agreements) with registration rights under the
Prior Agreements to be included in such registration, provided, however, that
the foregoing is not intended to limit or impair the registration rights, if
any, a holder may have pursuant to any other
registration rights agreement with
the Company to which such holder is a party, including any registration rights a
holder may have under the Prior Agreements.
(c) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 5.2 prior to or after the effectiveness of such registration whether or
not any Holder has elected to include securities in such registration.
5.3. Registration on Form S-3.
(a) In addition to the registration rights provided in
Sections 5.1 and 5.2, if the Company shall receive from Initiating Holders a
written request that the Company file a registration statement on Form S-3 (or
any successor form to Form S-3) for a public offering of shares of the Sponsor
Registrable Securities and the Company is a registrant entitled to use Form
6
S-3 to register the Sponsor Registrable Securities for such an offering by the
Initiating Holders, the Company will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its best lawful
efforts to effect such registration, qualification or compliance
(including, without limitation, appropriate qualification under
applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act
and any other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and distribution
of all or such portion of such Sponsor Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any Holders joining in such request as are
specified in a written request received by the Company within 20 days
after receipt of such written notice from the Company; provided,
however, that the Company shall not be obligated to take any action to
effect any such registration, qualification or compliance pursuant to
this Section 5.3:
(A) In any particular jurisdiction in which
the Company would be required to execute a general consent to
service of process in effecting such registration,
qualification or compliance unless the Company is already
subject to service in such jurisdiction and except as may be
required by the Securities Act;
(B) During the period starting with the date
sixty (60) days prior to the Company's estimated date of
filing of, and ending on the date three (3) months immediately
following the effective date of, any registration statement
pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with
respect to an employee benefit plan), provided that the
Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become
effective (and provided, further, that the Company cannot
pursuant to this Section 5.3(a)(ii)(B) or pursuant to Section
5.1(a)(ii)(B) delay implementation of a demand for
registration more than once in any 24-month period);
(C) After the Company has effected one
registration which may be effected at the option of the
Holders pursuant to either this Section 5.3(a) or Section
5.1(a), and such registration has been declared or ordered
effective; or
(D) If the Company shall furnish to such
Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of
Directors it would be seriously detrimental to the Company or
its shareholders for a registration statement to be filed in
the near future, then the Company's obligation to use its
reasonable best lawful efforts to register, qualify or comply
under this Section 5.3 shall be deferred once (with respect to
any demand for registration hereunder) for a period not to
exceed ninety (90) days
7
from the date of receipt of written request for registration;
provided, however, that the Company cannot pursuant to this
Section 5.3(a)(ii)(D) or pursuant to Section 5.1(a)(ii)(D)
delay implementation of a demand for registration more than
once in any 12-month period.
Subject to the foregoing clauses (A) through (D), the Company
shall file a registration statement covering the Registrable Securities so
requested to be registered as soon as reasonably practicable, after receipt of
the request or requests for registration.
(b) Underwriting. In the event that a registration pursuant to
Section 5.3 is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as part of the notice given pursuant to
Section 5.3(a)(i). In such event, the right of any Holder to registration
pursuant to Section 5.3 shall be conditioned upon such Holder's participation in
the underwriting arrangements required by this Section 5.3, and the inclusion of
such Holder's Registrable Securities, as the case may be, in the underwriting to
the extent requested shall be limited to the extent provided herein.
The Company shall (together with all Holders and other holders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by a majority in interest of the Initiating
Holders, but subject to the Company's reasonable approval. Notwithstanding any
other provision of this Section 5.3, if the managing underwriter determines that
marketing factors require a limitation of the number of Registrable Securities
to be underwritten, the underwriters may limit the Registrable Securities to be
included in such registration and underwriting (provided that securities of
other securityholders are not included therein). In the event of a limitation on
the number of Registrable Securities to be included in a registration, the
Company shall so advise all Holders, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all Holders thereof in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by such Holders at the
time of filing the registration statement. No Registrable Securities excluded
from the underwriting by reason of the underwriter's marketing limitation shall
be included in such registration. To facilitate the allocation of Registrable
Securities in accordance with the above provisions, the Company or the
underwriters may round the number of Registrable Securities allocated to any
Holder to the nearest 100 shares.
If any Holder disapproves of the terms of the underwriting,
such Person may elect to withdraw therefrom by written notice to the Company,
the managing underwriter and the Initiating Holders. The Registrable Securities
so withdrawn shall also be withdrawn from registration, and such securities
shall not be transferred in a public distribution prior to 180 days after the
effective date of such registration, or such other shorter period of time as the
underwriters may require.
(c) The Company shall not register securities for sale for its
own account in any registration requested pursuant to this Section 5.3 unless
permitted to do so by the written consent of Holders who hold at least 2/3 of
the Registrable Securities as to which registration has been requested or unless
the underwriter shall indicate in writing to the Initiating Holders that the
8
inclusion of the shares to be sold for the account of the Company will not
adversely affect the registration, the price of the shares to be sold and the
number of shares to be sold for the account of the Holders. The Company may not
cause any other registration of securities for sale for its own account (other
than a registration effected solely to implement an employee benefit plan or
stock option plan or a transaction contemplated by Rule 145 of the Commission)
to be initiated after a registration requested pursuant to Section 5.3 and to
become effective less than 90 days after the effective date of any registration
requested pursuant to Section 5.3.
5.4. Limitations on Subsequent Registration Rights.
(a) The Company represents and warrants to the Purchasers that
the registration rights granted to the Purchasers hereby do not conflict with
any other registration rights granted by the Company.
(b) Within the limitations prescribed by this Section 5.4(b),
but not otherwise, the Company may grant to subsequent investors in the Company
piggy-back registration rights such as those provided in Section 5.2. Such
rights may only pertain to shares of Common Stock, including shares of Common
Stock into which any other securities may be converted. Such rights may be
granted with respect to (i) registrations requested pursuant to Section 5.1 or
5.3, but only in respect of that portion of any such registration as remains
after inclusion of all Registrable Securities requested by Holders to be
included in such registration and (ii) registrations initiated by the Company,
provided that such rights shall be limited in all cases to sharing pro rata in
the available portion of the registration in question with Holders, such sharing
to be based on the number of shares of Common Stock held by the respective
Holders and held by such other investors, plus the number of shares of Common
Stock into which other securities held by the Holders and such other investors
are convertible, which are entitled to registration rights. The Company shall
not, after the date hereof, grant any registration rights which conflict with or
impair the registration rights granted hereby, provided that the foregoing shall
not limit the ability of the Company to grant subsequent demand registration
rights.
5.5. Expenses of Registration.
All Registration Expenses incurred in connection with the
registrations pursuant to Section 5.1, Section 5.2 and Section 5.3 shall be
borne by the Company. Unless otherwise stated, all Selling Expenses relating to
securities registered on behalf of the Holders or other holders registering
securities shall be borne by the Holders or holders of such securities pro rata
on the basis of the number of shares so registered.
5.6. Registration Procedures.
In the case of each registration, qualification or compliance
effected by the Company pursuant to this Agreement, the Company will keep each
Holder advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. At its expense
the Company will:
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(a) Prepare and file with the Commission a registration
statement with respect to such securities and use its best lawful efforts to
cause such registration statement to become and remain effective for a period of
one hundred twenty (120) days or until the Holder or Holders have completed the
distribution described in the registration statement relating thereto, whichever
first occurs; provided, however, that (i) such 120-day period shall be extended
for a period of time equal to the period the Holder refrains from selling any
securities included in such registration at the request of an underwriter of
Common Stock (or other securities) of the Company; and (ii) in the case of any
registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such 120-day period shall be extended,
if necessary, to keep the registration statement effective until all such
Registrable Securities are sold, provided that Rule 415, or any successor rule
under the Securities Act, permits an offering on a continuous or delayed basis,
and provided further that applicable rules under the Securities Act governing
the obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment that (I) includes any prospectus required by Section
10(a)(3) of the Securities Act or (II) reflects facts or events representing a
material or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be included
in (I) and (II) above to be contained in periodic reports filed pursuant to
Section 13 or 15(d) of the Exchange Act in the registration statement;
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(c) Furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the prospectus, as
a Holder from time to time may reasonably request;
(d) Notify each seller of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing;
(e) Cause all such Registrable Securities registered pursuant
hereto to be listed on each securities exchange or quoted on a quotation system
on which similar securities issued by the Company are then listed or quoted;
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(f) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration;
(g) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
securities holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, but not more than 18 months,
beginning with the first month after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act; and
(h) If requested by Holders of 50% of all of the Registrable
Securities that are being registered in such registration, furnish to each
prospective seller a signed counterpart, a "comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included in the registration statement, covering substantially the
same matters with respect to the registration statement (and the prospectus
included therein) and with respect to events subsequent to the date of the
financial statements, as are customarily covered (at the time of such
registration and closing) in "comfort" letters delivered to the underwriters in
underwritten public offerings of securities.
5.7. Indemnification.
(a) To the extent permitted by law, the Company will indemnify
each Holder, each of its officers and directors, partners and legal counsel and
each Person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification or compliance
has been effected pursuant to this Agreement, and each underwriter, if any, and
each Person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages or liabilities (or
actions or proceedings in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, not misleading, or any violation by
the Company of the Securities Act or any rule or regulation promulgated under
the Securities Act applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, each of its officers and directors, partners and legal counsel and
each Person controlling such Holder, each such underwriter and each Person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing, settling or defending any
such claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by such Holder,
controlling Person or underwriter and stated to be specifically for use therein.
Notwithstanding the foregoing, insofar as the foregoing indemnity relates to any
such
11
untrue statement (or alleged untrue statement) or omission (or alleged omission)
made in the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the Commission at the time the registration statement
becomes effective or in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Commission, the indemnity agreement herein shall not inure
to the benefit of any underwriter if a copy of the final prospectus filed
pursuant to Rule 424(b) was not furnished to the Person or entity asserting the
loss, liability, claim or damage at or prior to the time such furnishing is
required by the Securities Act.
(b) To the extent permitted by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors, officers and legal counsel, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each Person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act, and each other such Holder, each of
its officers and directors and each Person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such Holders, such directors,
officers, legal counsel, Persons, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein. Notwithstanding the foregoing,
the liability of each Holder under this subsection (b) shall be limited in an
amount equal to the net proceeds from the sale of the Registrable Securities
sold by such Holder. In addition, insofar as the foregoing indemnity relates to
any such untrue statement (or alleged untrue statement) or omission (or alleged
omission) made in the preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the Commission at the time the registration
statement becomes effective or in the final prospectus filed pursuant to Rule
424(b) of the Commission, the indemnity agreement herein shall not inure to the
benefit of the Company, any underwriter or (if there is no underwriter) any
Holder if a copy of the final prospectus filed pursuant to Rule 424(b) was not
furnished to the Person or entity asserting the loss, liability, claim or damage
at or prior to the time such furnishing is required by the Securities Act.
(c) Each party entitled to indemnification under this Section
5.7 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and
12
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement unless the failure to give such notice is materially
prejudicial to an Indemnifying Party's ability to defend such action and
provided further, that the Indemnifying Party shall not assume the defense for
matters as to which there is a conflict of interest or separate and different
defenses. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnified Party shall consent to entry of any judgment or enter
into any settlement without the consent of each Indemnifying Party (which
consent shall not be unreasonably withheld). Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with defense of such claim and litigation resulting
therefrom.
(d) If the indemnification provided for in this Section 5.7 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any losses, claims, damages, expenses or liabilities
referred to therein, then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, expenses or
liabilities in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and all shareholders offering securities in the
offering (the "Selling Shareholders") on the other in connection with the
statements or omissions which resulted in such losses, claims, damages, expenses
or liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and the Selling Shareholders on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Selling Shareholders and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Selling Shareholders agree that it would not be
just and equitable if contribution pursuant to this Section 5.7(d) were based
solely upon the number of entities from whom contribution was requested or by
any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 5.7(d). The amount paid or
payable by an Indemnified Party as a result of the losses, claims, damages,
expenses and liabilities referred to above in this Section 5.7(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim, subject to the provisions of Section 5.7(c) hereof. Notwithstanding
the provisions of this Section 5.7(d), no Selling Shareholder shall be required
to contribute any amount or make any other payments under this Agreement which
in the aggregate exceed the proceeds received by such Selling Shareholder. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in
13
connection with an underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.
5.8. Certain Agreements of Holders.
(a) The Holder(s) included in any registration shall furnish
to the Company such information regarding such Holder(s), the Registrable
Securities and the distribution proposed by such Holder(s), as the Company may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification or compliance referred to in Section 5.
(b) The failure of any Holder(s) to be included in a
registration to furnish the information requested pursuant to Section 5.8(a)
shall not affect the obligation of the Company under Section 5 to the remaining
Holder(s) who furnish such information unless, in the reasonable opinion of
counsel to the Company or the underwriters, such failure impairs or may impair
the legality of the registration statement or the underlying offering.
(c) Each Holder agrees that, upon receipt of any notice from
the Company of the happening of any event requiring the preparation of a
supplement or amendment to a prospectus relating to Registrable Securities so
that, as thereafter delivered to such Holder, such prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, each Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statements contemplated by this
Agreement until its receipt of copies of the supplemented or amended prospectus
from the Company and, if so directed by the Company, each Holder shall deliver
to the Company all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities that
is current at the time of receipt of such notice.
(d) Each Holder agrees to notify the Company, at any time when
a prospectus relating to the registration statement contemplated by this
Agreement is required to be delivered by it under the Act, of the occurrence of
any event relating to such Holder which requires the preparation of a supplement
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading
relating to such Holder, and such Holder shall promptly make available to the
Company information necessary to enable the Company to prepare any such
supplement or amendment. Each Holder agrees not to take any action with respect
to any distribution deemed to be made pursuant to such registration statement
that constitutes a violation of Rule 10(b)6 under the Exchange Act or any other
applicable rule, regulation or law.
(e) Each Holder acknowledges and agrees that in the event of
sales under a shelf registration statement pursuant to this Agreement, (1) the
Registrable Securities sold pursuant to such registration statement are not
transferable on the books of the Company unless the share certificate submitted
to the transfer agent evidencing such Registrable Securities is accompanied by a
certificate reasonably satisfactory to the Company to the effect that (A) the
14
Registrable Securities have been sold in accordance with such registration
statement and (B) the requirement of delivering a current prospectus has been
satisfied and (2) such Holder will not effect any public sale or distribution of
Registrable Securities pursuant to such shelf registration statement pursuant to
this Agreement at any time that the Company shall have advised the Holders in
writing that the sale by such Holders pursuant to such shelf registration could
reasonably be expected to adversely affect, or require the premature disclosure
of any proposed acquisition, disposition or other transaction involving the
Company; provided, however, the Company may not restrict any such sales unless
at least five (5) days' prior written notice is provided to each Holder and
provided further the Company may not restrict sales by Holders for a total of
more than 60 (sixty) days during any one year period.
5.9. Rule 144 Reporting.
With a view to making available the benefits of certain rules
and regulations of the Commission which may at any time permit the sale of the
Restricted Securities to the public without registration, after such time as a
public market exists for the Common Stock of the Company, the Company agrees to
use its best lawful efforts to:
(a) Make and keep public information regarding the Company
available, as those terms are understood and defined in Rule 144 under the
Securities Act, at all times from and after 90 days following the effective date
of the first registration under the Securities Act filed by the Company for an
offering of its securities to the general public.
(b) File with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements);
(c) So long as a Holder owns any Restricted Securities,
furnish to such Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time from and after 90 days following the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as a Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing such Holder
to sell any such securities without registration.
5.10. Transfer of Registration Rights.
The rights granted to a Holder under Section 5 may be assigned
to a transferee or assignee in connection with any transfer or assignment of
Registrable Securities by a Holder provided that: (i) such transfer may
otherwise be effected in accordance with applicable securities laws, (ii) such
assignee or transferee acquires at least the lesser of (a) one-half of the
number of Registrable Securities originally held by the Holder that owned such
Registrable Securities on the date hereof and (b) Registrable Securities
consisting of or convertible into
15
150,000 shares of Common Stock (subject to appropriate adjustment for any stock
splits, dividends, subdivisions, combinations, recapitalizations and the like)
and (iii) the Holder notifies the Company in writing of the transfer or
assignment, stating the name and the address of the transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned and the assignee or transferee agrees in writing
to be bound by the provisions of this Agreement.
5.11. Lockup Agreement.
In consideration for the Company's agreeing to its obligations
under this Agreement, each Holder hereby agrees in connection with any
registration of the Company's securities other than (x) a registration relating
solely to employee benefit plans, or (y) a registration relating solely to a
transaction contemplated by Rule 145 of the Commission (whether or not the
Holder's Registrable Securities are included in a registration statement
pursuant thereto) not to sell, make any short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any Registrable Securities (other
than those included in the registration) other than intra-family transfers and
transfer to trusts for estate planning purposes without the prior written
consent of the Company or underwriters managing the offering, as the case may
be, during the 90-day period beginning on the effective date of a registration
statement filed pursuant hereto; provided, however, that such Holder shall be
relieved of its obligations under this Section 5.11 unless all executive
officers and directors of the Company enter into similar agreements. Each Holder
hereby agrees that, upon the request of the Company or the underwriters, it will
confirm in writing the provisions of this Section 5.11. The Company may impose
stock-transfer instructions with respect to securities subject to the foregoing
restriction until the end of said restriction.
5.12. Termination of Registration Rights.
The registration rights granted pursuant to this Agreement
shall terminate as to any Holder at such time as such Holder may sell under Rule
144(k) all Registrable Securities then held by such Holder.
Section 6. Miscellaneous.
6.1. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS
OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAWS EXCEPT TO THE EXTENT THAT THE NEW YORK CONFLICTS OF LAWS PRINCIPLES WOULD
APPLY THE APPLICABLE LAWS OF THE STATE OF
TEXAS TO INTERNAL MATTERS RELATING TO
CORPORATIONS THEREUNDER).
6.2. Successor and Assigns.
Except as otherwise provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto.
16
6.3. Effectiveness.
This Agreement shall become effective upon its execution by
each Purchaser.
6.4. Entire Agreement; Amendment.
This Agreement constitutes the full and entire understanding
and agreement between the parties with regard to the subject hereof. Except as
expressly provided herein, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought; provided, however, that any provisions
hereof may be amended, waived, discharged or terminated upon the written consent
of the Company and the holders of a majority in interest of the aggregate of the
then outstanding Registrable Securities; and provided further, that any such
amendment, waiver, discharge or termination that would adversely affect in any
material respect the rights hereunder of any Holder, in its capacity as such,
without similarly affecting the rights hereunder of all of the Holders may not
be made without the prior written consent of such adversely affected of Holder.
6.5. Notices, Etc.
All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, or otherwise delivered by hand or by messenger, including
Federal Express or similar courier service, or by facsimile transmission
addressed (a) if to a Purchaser, at such Purchaser's address and/or telefax
number set forth in Annex A attached hereto, or at such other address as such
Purchaser shall have furnished to the Company in writing, or (b) if to the
Company, to Carrizo Oil & Gas, Inc., 00000 Xx. Xxxx'x Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000, Attn: President; telefax number (000) 000-0000, or at such other
address as the Company shall have furnished to the Holders.
Each such notice or other communication shall for all purposes
of this Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or five
days after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid, or, if
sent by courier, on the next business day following the day of dispatch or sent
by facsimile transmission, on the date of such transmission if confirmation of
such transmission is received.
6.6. Delays or Omissions.
Except as expressly provided herein, no delay or omission to
exercise any right, power or remedy accruing to any party upon any breach or
default of another party the Company under this Agreement shall impair any such
right, power or remedy of such party that is not in breach or default nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or
17
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
6.7. Severability.
In the event that any provision of this Agreement becomes or
is declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision; provided that no such severability shall be effective if it
materially changes the economic benefit of this Agreement to any party.
6.8. Titles and Subtitles.
The titles and subtitles used in this Agreement are used for
convenience only and are not considered in construing or interpreting this
Agreement.
6.9. Gender.
As used herein, masculine pronouns shall include the feminine
and neuter, neuter pronouns shall include the masculine and the feminine.
6.10. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
18
IN WITNESS WHEREOF, the undersigned or each of their
respective duly authorized officers or representatives have executed this
agreement effective upon the date first set forth above.
"COMPANY"
CARRIZO OIL & GAS, INC.
By: /s/ XXXXX X. XXXXXX
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer and
Vice President
"PURCHASERS"
MELLON VENTURES, L.P.
By: MVMA, L.P., its general partner
By: MVMA, Inc., its general partner
By: /s/ XXXX X. XXXX
-------------------------------
Name: Xxxx X. Xxxx
Title: Associate
/s/ XXXXXX X. XXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxx
ANNEX A
PURCHASERS
Mellon Ventures, L.P.
1114 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Dechert
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Xxxxxx X. Xxxxxxx
00000 Xx. Xxxx'x Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
