EXHIBIT 10.3
THIS STOCK PLEDGE AND SECURITY AGREEMENT IS SUBJECT TO THAT CERTAIN
SUBORDINATION AGREEMENT, DATED OCTOBER 29, 2004, BETWEEN PCRL INVESTMENTS L.P.,
AND OTHERS, SAME BEING MORE PARTICULARLY IDENTIFIED AND DESCRIBED AT SECTION 20
BELOW.
STOCK PLEDGE AND SECURITY AGREEMENT
THIS STOCK PLEDGE AND SECURITY AGREEMENT (this "Agreement") is dated and
effective as of October 29, 2004 by Carrizo Oil & Gas, Inc., a Texas corporation
(hereinafter referred to as "Grantor"), in favor of PCRL Investments L.P., a
Texas limited partnership (the "Collateral Agent"), as Collateral Agent for
itself and each of the financial institutions (the "Holders") which now or
hereafter become a holder of any of the Notes pursuant to that certain Purchase
Agreement (as defined below), to secure the Indebtedness (as defined below) of
the Grantor.
Recitals
A. The Grantor, the Collateral Agent, and the Holders are the parties to
that certain Purchase Agreement of even date herewith.
B. Pursuant to the Purchase Agreement, the Grantor has agreed to enter into
and execute this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the Grantor and the
Collateral Agent (for the ratable benefit of the Holders) do hereby agree and
obligate themselves as follows:
Section 1. Definitions. Any capitalized term defined in the Purchase
Agreement (as defined below) and not otherwise defined herein shall have the
meaning given to such term in the Purchase Agreement. In addition, the following
terms shall have the following meanings when used in this Agreement:
AGREEMENT. The term "Agreement" refers to this Stock Pledge and Security
Agreement as this agreement may be modified, restated, or amended in
writing from time to time, and to any exhibits or attachments to this
Agreement.
CCBM. The term "CCBM" means CCBM, Inc., a Delaware corporation, and its
successors and assigns.
COLLATERAL. The term "Collateral" refers individually, collectively and
interchangeably to the Collateral as more fully described in Section 2 (A)
of this Agreement.
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GRANTOR. The term "Grantor" means Carrizo Oil & Gas, Inc., a Texas
corporation, and its successors and assigns.
HOLDERS. The term "Holders" means each Purchaser listed on Schedule 2 of
the Purchase Agreement (so long as it holds the Notes) and any other holder
of any of the Notes.
INDEBTEDNESS. The term "Indebtedness" refers individually, collectively and
interchangeably to (i) the present and future indebtedness, obligations,
and liabilities of Grantor arising under the Purchase Agreement, including
the Notes, as well as any future renewals, modifications, or extensions to
any one or more of the Notes, (ii) all present and future indebtedness,
obligations and liabilities of Company or any Guarantor to the Holders, or
any Affiliate of any Holders, arising under or in connection with any
Hedging Agreements and (iii) all obligations of Grantor arising under the
Registration Rights Agreement, including, without limitation, all
obligations of Grantor to repurchase shares of Common Stock issued in
satisfaction of the Indebtedness described in the foregoing clause (i).
NOTES. The term "Notes" refers to the 10% Senior Subordinated Secured Notes
due December 15, 2008 in the maximum aggregate initial principal amount of
up to $28,000,000, issued by the Grantor to any Holder as amended,
modified, restated or supplemented from time to time.
PURCHASE AGREEMENT. The term "Purchase Agreement" means that certain Note
Purchase Agreement of even dated herewith by and among Grantor, the
Collateral Agent, and the Purchasers, as the same may hereafter be amended,
modified, and/or restated from time to time and in effect.
REGISTRATION RIGHTS AGREEMENT. The term "Registration Rights Agreement"
means that certain Registration Rights Agreement of even dated herewith by
and among Grantor and the Purchasers, as the same may hereafter be amended,
modified, and/or restated from time to time and in effect.
SECURITYHOLDERS AGREEMENT. The term "Securityholders Agreement" means that
certain SECURITYHOLDERS AGREEMENT, dated as of June 23, 2003 by and among
Pinnacle Gas Resources, Inc., a Delaware corporation, CCBM, Inc., a
Delaware corporation, Rocky Mountain Gas, Inc., a Wyoming corporation ,
each of the CSFB Parties (as defined herein), Xxxxx X. Xxxxxxxxxxx, a
natural person , Xxxx Xxxxxx, a natural person, Carrizo Oil & Gas, Inc., a
Texas corporation and U.S. Energy Corporation, a Delaware corporation.
"CSFB Parties" means, collectively, DLJ MB Partners III GmbH & Co. KG, a
limited company organized under the laws of Germany, DLJ Offshore Partners
III, C.V., a partnership organized under the laws of the Netherland
Antilles, DLJ Offshore Partners III1, C.V., a partnership
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organized under the laws of the Netherland Antilles, DLJ Offshore Partners
III2, C.V., a partnership organized under the laws of the Netherland
Antilles, Millennium Partners II, L.P., a Delaware limited partnership, DLJ
Merchant Banking Partners III, L.P., a Delaware limited partnership, and
MBP III Plan Investors, L.P., a Delaware limited partnership.
Section 2. Security Interest. (A) To secure the full and punctual payment
and performance of all present and future Indebtedness, the Grantor hereby
pledges, transfers and grants to the Collateral Agent (for the ratable benefit
of the Holders) a continuing security interest in and to all of the following
property of the Grantor, whether now owned or existing or hereafter acquired or
arising (collectively the "Collateral"):
1000 shares of the capital stock of CCBM represented by Certificate No. 1,
dated June 29, 2001, registered in the Grantor's name, together with any
additional shares of stock issued by CCBM to the Grantor hereafter as stock
dividends, stock splits or otherwise, or shares received as a result of any
merger or consolidation of CCBM, all cash, liquidation and other dividends
now or hereafter declared thereon, all stock redemption payments and all
other monies due or to become due thereunder, all stock warrants, options,
pre-emptive rights, rights of first refusal, and other rights to subscribe
to, purchase or receive any shares of common stock or other securities now
or hereafter incident thereto or declared or granted in connection
therewith, and all distributions (whether made in cash, instruments,
income, or other property) made or to be made in connection therewith or
incident thereto, and all proceeds of all or any of the foregoing, in
whatever form, and all proceeds of such proceeds.
(B) The security interest is granted as security only and shall not subject
the Collateral Agent and/or the Holders to, or transfer or in any way affect or
modify, any obligation or liability of the Grantor with respect to any of the
Collateral or any transaction in connection therewith.
Section 3. Delivery of Collateral. Subject to the terms and conditions of
the Subordination Agreement, the Collateral Agent, or its designated
representative, hereby accepts the delivery of the Collateral on behalf the
Holders and on behalf of any future transferee of the Indebtedness. Subject to
the terms and conditions of the Subordination Agreement, the Grantor will
execute and deliver to the Collateral Agent, or its designated representative,
all assignments, endorsements, powers and other documents reasonably requested
at any time and from time to time by the Collateral Agent or the Holders with
respect to the Collateral and the rights and powers granted to the Collateral
Agent or the Holders hereunder, and will deliver to the Collateral Agent, or its
designated representative, any stock certificates representing stock dividends
on, or stock splits of, any of the Collateral, together with a stock power fully
executed in blank.
Section 4. Representations. Subject to the terms and conditions of the
Subordination Agreement, the Grantor has not performed any acts or signed any
agreements which might prevent the Collateral Agent from enforcing any of the
terms of this Agreement or which would limit any of them in any such
enforcement. Except for the Senior Credit Documents, no security agreement or
similar or equivalent document or instrument covering all or any part of the
Collateral has been executed by the Grantor and remains in effect. Subject to
the terms and conditions of the
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Subordination Agreement, no Collateral is in the possession of any Person (other
than the Grantor) asserting any claim thereto or security interest therein,
except that the Collateral Agent or its designee may have possession of
Collateral as contemplated hereby. The Grantor further represents and warrants
as follows:
(a) There are no outstanding options, warrants or similar rights with
respect to the Collateral;
(b) The Grantor has the full power and authority to grant to the
Collateral Agent a valid and enforceable perfected and continuing lien
on and security interest in the Collateral pursuant to this Agreement;
(c) The Collateral delivered to the Collateral Agent is fully paid and
non-assessable, duly and validly authorized and issued and, upon
execution hereof, will be duly and validly pledged to the Collateral
Agent in accordance with all provisions of applicable law;
(d) The Grantor has good and marketable title to, and is the legal and
registered owner of, the Collateral, free and clear of all liens,
except for the security interest created pursuant to this Agreement,
and except for the lien and security interest granted to the Senior
Agent;
(e) Upon the execution and delivery of this Agreement and the delivery to
the Collateral Agent of the Collateral, the Collateral Agent (for the
ratable benefit of the Holders) shall have a valid and enforceable
lien on and security interest in and to the Collateral; such lien and
security interest shall constitute a perfected security interest in
such Collateral, and except for the lien and security interest granted
to the Senior Agent, superior to the rights and equitable interests of
all other persons in the Collateral;
(f) The execution, delivery and performance of this Agreement by the
Grantor and the granting of a valid and enforceable lien and security
interest in the Collateral will not (i) violate any provision of any
law, any judgment, order, rule or regulation of any court, arbitration
panel, or other governmental authority, domestic or foreign, or other
person, (ii) violate any provision of any indenture, agreement,
mortgage, contract or other instrument to which the Grantor is a party
or by which any of its properties, assets or revenues are bound, or be
in conflict with, result in an acceleration of any obligation or a
breach of or constitute (with notice or lapse of time or both) a
default under, any such indenture, agreement, mortgage, contract or
other instrument, or (iii) result in the creation or imposition of any
lien on any of the properties, assets or revenues of the Grantor,
except those in favor of the Collateral Agent as provided herein.
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(g) This Agreement has been duly executed and delivered by the Grantor and
constitutes the legal, valid and binding obligation of the Grantor
enforceable against it in accordance with its terms;
(h) No registration with or consent or approval of, or other action by,
any governmental authority, domestic or foreign, or other person is
required (other than such approvals or consents which may have been
obtained) in connection with the execution, delivery and performance
of this Agreement and the granting of the valid and enforceable lien
and security interest in the Collateral in favor of the Collateral
Agent;
(i) The Collateral constitutes not less than 100% of the issued and
outstanding Capital Stock of CCBM;
(j) The Grantor represents and warrants that until the Collateral Agent's
security interest in the Collateral is terminated by the Collateral
Agent, that the Collateral shall at all times constitute not less than
100% of the issued and outstanding Capital Stock of CCBM. To the
extent necessary, the Grantor agrees that it shall not approve or
authorize any issuance of Capital Stock by CCBM if such issuance would
reduce the Collateral below the 100% calculation mentioned in the
preceding sentence;
(k) The Grantor represents and warrants that it is a corporation duly
organized under the laws of its state of incorporation. As of the date
hereof, Grantor's mailing address and the location of is its principal
place of business (if it only has one) or its chief executive office
(if it has more than one place of business) is at 00000 Xx. Xxxx'x
Xxxx, Xxxxx 000, Xxxxxxx, XX 00000. Grantor also represents and
warrants that it has not conducted business under any name except the
name in which it has executed this Agreement, which is the exact name
as it appears in the Grantor's organizational documents, as amended,
as filed with the Grantor's jurisdiction of organization. Grantor
represents and warrants that its Federal employer identification
number is 00-0000000. Grantor agrees that it will notify Collateral
Agent in writing should Grantor ever change its name, legal status, or
change or obtain a new Federal employer identification number. Grantor
further agrees to notify Collateral Agent in writing of any change in
Grantor's mailing address or the location of Grantor's principal
office; and
(l) The Grantor represents and warrants that it shall not execute any
amendment to or modification of the Securityholders Agreement without
first obtaining the prior written consent of Collateral Agent.
Section 5. Voting Rights. (A) So long as no Event of Default (as such term
is defined in the Purchase Agreement) shall have occurred and be continuing, the
Grantor shall have the right, from time to time, to exercise voting and other
consensual rights to give approvals, ratifications and
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waivers pertaining to the Collateral, and the Collateral Agent upon receiving a
written request from the Grantor accompanied by a certificate stating that no
Event of Default has occurred will deliver to the Grantor (or as specified in
such request) such proxies, approvals, ratifications, waivers and other
instruments pertaining to the Collateral as may be specified in such request and
be in form and substance satisfactory to the Collateral Agent.
(B) Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right, at the Collateral Agent's option, to
exercise the voting and other consensual rights to give approvals, ratifications
and waivers and to take any other action with respect to all the Collateral with
the same force and effect as if the Collateral Agent (for the ratable benefit of
the Holders) was the absolute and sole owner thereof, and the Grantor's right to
exercise such voting and other consensual rights shall, at the Collateral
Agent's option, cease and become vested in the Collateral Agent.
Section 6. Remedies upon Default. (A) Upon the occurrence and during the
continuance of an Event of Default (as such term is defined in the Purchase
Agreement) the Collateral Agent may exercise all rights of a secured party under
the Uniform Commercial Code and other applicable law (including the Uniform
Commercial Code as in effect from time to time in any applicable jurisdiction)
and, in addition, the Collateral Agent may, without being required to give any
notice, except as herein provided or as may be required by mandatory provisions
of law, (i) transfer the whole or any part of the Collateral into the name of
Collateral Agent or its nominee(s); (ii) sell the Collateral or any part thereof
at a broker's board or on a securities exchange; or (iii) sell the Collateral or
any part thereof at public or private sale, for cash, upon credit or for future
delivery, and at such price or prices as the Collateral Agent may deem
satisfactory. The Collateral Agent may be the purchaser of any or all of the
Collateral so sold at any public sale (or, if the Collateral is of a type
customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, at any private sale). The Grantor
will execute and deliver such documents and take such other action as the
Collateral Agent deems necessary or advisable in order that any such sale may be
made in compliance with law. Upon any such sale the Collateral Agent shall have
the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale shall hold the Collateral so
sold to it absolutely and free from any claim or right of whatsoever kind,
including any equity or right of redemption of the Grantor which may be waived,
and the Grantor, to the extent permitted by law, hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under any law
now existing or hereafter adopted. The Grantor agrees that ten (10) days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral constitutes "reasonable notification" within the
meaning of Section 9-612 of the Uniform Commercial Code (or any successor
provision from time to time in effect) except that shorter or no notice shall be
reasonable as to any Collateral which is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market. The
notice (if any) of such sale shall (1) in case of a public sale, state the time
and place fixed for such sale, and (2) in the case of a private sale, state the
day after which such sale may be consummated. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may determine. The Collateral Agent shall not be obligated to
make any such sale
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pursuant to any such notice. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by the Collateral
Agent until the selling price is paid by the purchaser thereof, but the
Collateral Agent shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice.
(B) The Collateral Agent, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the security interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction. The Grantor does by these presents consent, agree and stipulate
that upon the occurrence of an Event of Default it shall be lawful for the
Collateral Agent, and the Grantor does hereby authorize the Collateral Agent, to
cause all and singular the Collateral to be seized and sold under executory or
ordinary process, at the Collateral Agent's sole option, without appraisement,
appraisement being hereby expressly waived, as an entirety or in parcels as the
Collateral Agent may determine, to the highest bidder, and otherwise exercise
the rights, powers and remedies afforded herein and under applicable New York
law.
(C) The Grantor recognizes that the Collateral Agent may be unable to
effect a public sale of all or part of the Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and applicable
state securities laws but may be compelled to resort to one or more private
sales to a restricted group of purchasers who will be obligated to agree, among
other things, to acquire all or a part of the Collateral for their own account,
for investment, and not with a view to the distribution or resale thereof. If
the Collateral Agent deems it advisable to do so for the foregoing or for other
reasons, the Collateral Agent is authorized to limit the prospective bidders on
or purchasers of any of the Collateral to such a restricted group of purchasers
and may cause to be placed on certificates for any or all of the Collateral a
legend to the effect that such security has not been registered under the
Securities Act of 1933, as amended, and may not be disposed of in violation of
the provision of said act, and to impose such other limitations or conditions in
connection with any such sale as the Collateral Agent deems necessary or
advisable in order to comply with said act or any other securities or other
laws. The Grantor acknowledges and agrees that any private sale so made may be
at prices and on other terms less favorable to the seller than if such
Collateral were sold at public sale and that the Collateral Agent has no
obligation to delay the sale of such Collateral for the period of time necessary
to permit the registration of such Collateral for public sale under any
securities laws. The Grantor agrees that a private sale or sales made under the
foregoing circumstances shall be deemed to have been made in a commercially
reasonable manner. If any consent, approval, or authorization of any federal,
state, municipal or other governmental department, agency or authority should be
necessary to effectuate any sale or other disposition of the Collateral, or any
partial sale or other disposition of the Collateral, the Grantor will execute
all applications and other instruments as may be required in connection with
securing any such consent, approval or authorization and will otherwise use its
best efforts to secure same. In addition, if the Collateral is disposed of
pursuant to Rule 144, the Grantor agrees to complete and execute a Form 144, or
comparable successor form, at the Collateral Agent's request; and the
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Grantor agrees to provide any material adverse information in regard to the
current and prospective operations of any corporation whose stock constitutes
all or a portion of the Collateral of which the Grantor has knowledge and which
has not been publicly disclosed, and the Grantor hereby acknowledges that the
Grantor's failure to provide such information may result in criminal and/or
civil liability.
(D) In addition, to the extent permitted by applicable law, the Grantor
hereby unconditionally and irrevocably authorizes and instructs CCBM, upon the
occurrence and continuance of an Event of Default, to transfer record ownership
of the Collateral to the Holders. Notice of said occurrence and continuance of
an Event of Default to CCBM shall be the issuance of a written notification
thereof by the Collateral Agent to CCBM.
(E) Application of Proceeds. All payments received by the Collateral Agent
and/or the Holders hereunder shall be applied by the Holders to payment of the
Indebtedness in the following order unless a court of competent jurisdiction
shall otherwise direct:
(i) FIRST, to payment of all costs and expenses of the Collateral Agent
incurred in connection with the collection and enforcement of the
Indebtedness or of any security interest granted to the Collateral
Agent for the benefit of the Holders in connection with any collateral
securing the Indebtedness;
(ii) SECOND, to payment of that portion of the Indebtedness constituting
accrued and unpaid interest and fees, to the Collateral Agent and the
Holders and their Affiliates in accordance with the amount of such
accrued and unpaid interest and fees owing to each of them;
(iii)THIRD, to payment of the principal outstanding under the Notes and
any amount due by the Grantor to Holders (or any affiliate of Holders)
under Hedging Agreements (to the extent constituting Indebtedness);
and
(iv) FOURTH, to payment of any remaining Indebtedness.
(F) Notwithstanding anything herein to the contrary, the Grantor and the
Collateral Agent hereby acknowledge and agree, among themselves and for the
benefit of Pinnacle that (i) insofar and only insofar as the Pinnacle Shares (as
defined below) are concerned, each agrees to be bound by the terms of the
Securityholders Agreement, (ii) the Collateral Agent shall notify (using the
names and addresses of such parties as provided in Section 9.5 of the
Securityholders Agreement) Pinnacle and the nonpledging Shareholder (as defined
in the Securityholders Agreement) of the date, time and location of any
foreclosure upon pledged or encumbered Collateral at least 60 days prior to the
foreclosure, (iii) that any notice of foreclosure shall be deemed to be an
Involuntary Transfer subject to Section 5.6 of the Securityholders Agreement,
and (iv) if Pinnacle elects to purchase the Pinnacle shares held by Grantor (the
"Pinnacle Shares") pursuant to Section 5.6 of the Securityholders Agreement, the
foreclosure shall not be held and the Pinnacle Shares shall be sold and
delivered by the Collateral Agent and the Grantor to the Persons entitled to
purchase such Pinnacle Shares under Section 5.6 of the Securityholders
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Agreement in accordance with Section 5.6 of the Securityholders Agreement. If
for any reason the pledged Collateral is foreclosed upon, the foreclosure shall
be considered an Involuntary Transfer and the provisions of Section 5.6 of the
Securityholders Agreement shall govern.
Section 7. Limitation on Duty. Beyond the exercise of reasonable care in
the custody thereof, the Collateral Agent shall have no duty as to any
Collateral in its possession or control or in the possession or control of the
Holders or bailee or any income thereon. The Collateral Agent shall be deemed to
have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property, and shall not be liable or responsible for
any loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any broker or other Holder or
bailee selected by the Collateral Agent in good faith. The Collateral Agent
shall be deemed to have exercised reasonable care with respect to any of the
Collateral in its possession if the Collateral Agent takes such action for that
purpose as the Grantor shall reasonably request in writing; but no failure to
comply with any such request shall, of itself, be deemed a failure to exercise
reasonable care.
Section 8. Appointment of Collateral Agent. At any time or times, in order
to comply with any legal requirement in any jurisdiction, the Holders may
appoint a bank or trust company or one or more other Persons with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment.
Section 9. Revised Article 9. Grantor hereby confirms that by signing this
Agreement, that Grantor has authenticated this Agreement, within the meaning of
Revised Article 9 of the Uniform Commercial Code as now or hereafter in effect
in any jurisdiction ("Revised Article 9"). This Agreement shall constitute full
authorization in favor of the Collateral Agent to file appropriate financing
statements, initial or "in lieu" financing statements, continuation statements,
and statements of amendment, with or without Grantor's signature, as may be
necessary or advisable to perfect and maintain the perfection and priority of
the security interest granted to the Holders in this Agreement, including any
such filings containing such information required by Part 5 of Revised Article 9
for the sufficiency or filing office acceptance of any financing statement,
continuation statement or amendment, including whether Grantor is an
organization, the type of organization and any organization number issued to the
Grantor. Grantor shall furnish such information to Collateral Agent upon
Collateral Agent's request. Any such financing statements, continuation
statements or amendments requiring the signature of Grantor may be signed by
Collateral Agent on Grantor's behalf. Any such filings by Collateral Agent may
be by delivery of originals or photocopies, by electronic communication, or such
other authorized form of communication as may be therein permitted.
Section 10. Expenses. In the event that the Grantor fails to comply with
any provisions of the Purchase Agreement or this Agreement, such that the value
of any Collateral or the validity, perfection, rank or value of any security
interest hereunder is thereby diminished or potentially diminished or put at
risk, the Collateral Agent may upon reasonable prior notice, but shall not be
required to, effect such compliance on behalf of the Grantor, and the Grantor
shall reimburse the Collateral Agent for the costs thereof on demand. All
insurance expenses and all expenses of
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protecting, storing, appraising, preparing for sale, handling, maintaining and
shipping the Collateral, any and all excise, property, sales, and use taxes
imposed by any federal, state or local authority on any of the Collateral, all
expenses in respect of periodic appraisals and inspections of the Collateral to
the extent the same may be reasonably requested from time to time, and all
expenses in respect of the sale or other disposition thereof shall be borne and
paid by the Grantor, and if the Grantor fails to promptly pay any portion
thereof when due, the Collateral Agent may, at its option, but shall not be
required to, pay the same and charge the Grantor's account therefor, and the
Grantor agrees to reimburse the Collateral Agent therefor on demand. Subject to
Section 11.8 of the Purchase Agreement, all sums so paid or incurred by the
Collateral Agent for any of the foregoing and any and all other sums for which
the Grantor may become liable hereunder and all costs and expenses (including
reasonable attorneys' fees, legal expenses and court costs) incurred by the
Collateral Agent in enforcing or protecting any of the rights or remedies under
this Agreement, together with interest thereon until paid at the rate equal the
then highest rate of interest charged on the principal of any of the
Indebtedness due under the Notes plus one percent (1%), shall be additional
Indebtedness hereunder and the Grantor agrees to pay all of the foregoing sums
promptly on demand.
Section 11. Termination. This Agreement shall terminate upon the
satisfaction of all of the following conditions: (1) upon the payment in full of
the Indebtedness, (2) the termination of the Purchase Agreement (and all
obligations of the Holders thereunder), (3) the termination of all obligations
with respect to Hedging Agreements (to the extent constituting Indebtedness),
(4) the payment of all obligations with respect to Hedging Agreements (to the
extent constituting Indebtedness), and, (5) in the event any portion of the
Indebtedness was paid by the issuance of shares of Common Stock to any Holder of
a Note, the earlier of (a) the expiration of the Repurchase Period (as such term
is defined in the Registration Rights Agreement) or (b) sale by such Holder of
all such shares of Common Stock. Upon request of the Grantor, the Collateral
Agent shall deliver the remaining Collateral (if any) to the Grantor unless any
Senior Indebtedness (as defined in the Subordination Agreement) is outstanding.
Section 12. Notices. Any notice or demand which, by provision of this
Agreement, is required or permitted to be given or served to the Grantor, the
Collateral Agent, the Holders, and/or CCBM shall be deemed to have been
sufficiently given and served for all purposes if made in accordance with the
Purchase Agreement.
Section 13. Amendment. Neither this Agreement nor any provisions hereof may
be changed, waived, discharged or terminated orally or in any manner other than
by an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
Section 14. Waivers. No course of dealing on the part of the Collateral
Agent or the Holders, their officers, employees, consultants or agents, nor any
failure or delay by the Collateral Agent or the Holders with respect to
exercising any of its rights, powers or privileges under this Agreement shall
operate as a waiver thereof.
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Section 15. Cumulative Rights. The rights and remedies of the Collateral
Agent and the Holders under this Agreement shall be cumulative and the exercise
or partial exercise of any such right or remedy shall not preclude the exercise
of any other right or remedy.
Section 16. Titles of Sections. All titles or headings to sections of this
Agreement are only for the convenience of the parties and shall not be construed
to have any effect or meaning with respect to the other content of such
sections, such other content being controlling as to the agreement between the
parties hereto.
SECTION 17. GOVERNING LAW. THIS AGREEMENT IS A CONTRACT MADE UNDER AND
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE UNITED
STATES OF AMERICA AND THE STATE OF NEW YORK.
Section 18. Successors and Assigns. All covenants and agreements made by or
on behalf of the Grantor in this Agreement shall bind Grantor's successors and
assigns and shall inure to the benefit of the Collateral Agent, the Holders (and
in the case of Hedging Agreements, Affiliates of any Holders) and their
successors and assigns. This Agreement is for the benefit of the Collateral
Agent and the Holders and for such other Person or Persons as may from time to
time become or be the holders of any of the Indebtedness (including any
Affiliates of any Holders with respect to obligations under Hedging Agreements),
and this Agreement shall be transferable with the same force and effect and to
the same extent as the Indebtedness may be transferable, it being understood
that, upon the transfer or assignment by the Collateral Agent or the Holders of
any of the Indebtedness, the legal holder of such Indebtedness shall have all of
the rights granted to the Collateral Agent and the Holders (or Affiliates of
such Holders with respect to obligations under Hedging Agreements) under this
Agreement.
Section 19. Counterparts. This Agreement may be executed in two or more
counterparts, and it shall not be necessary that the signatures of all parties
hereto be contained on any one counterpart hereof, each counterpart shall be
deemed an original, but all of which when taken together shall constitute one
and the same instrument.
Section 20. Subordination Agreement. Reference is made herein for all
purposes to that certain Subordination Agreement (the "Subordination Agreement")
dated as of October 29, 2004, executed among the Collateral Agent, in its
capacity as collateral agent for the financial institutions and investment funds
party to the Purchase Agreement, Hibernia National Bank, in its capacity as
administrative agent (the "Senior Agent") for the financial institutions party
to the Senior Credit Agreement and Company. Notwithstanding anything to the
contrary herein, until such time as the Senior Indebtedness (as such term is
defined in the Subordination Agreement) is paid in full and the commitments
evidenced by the Senior Credit Documents have been terminated, the provisions of
this Stock Pledge and Security Agreement are subject to the terms, covenants,
conditions and provisions of the Subordination Agreement, which, among other
things, provide that the interests of the Collateral Agent in and to the
Collateral shall be inferior, and subordinate to the interests of Senior Agent
in accordance with the Subordination Agreement. In the event of any
inconsistency between the terms and provisions of this Stock
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Pledge and Security Agreement and the Subordination Agreement, the terms,
covenants, conditions and provisions of the Subordination Agreement shall
prevail until such time as the Senior Indebtedness (as such term is defined in
the Subordination Agreement) is paid in full and the commitments evidenced by
the Senior Credit Documents have been terminated.
THIS WRITTEN STOCK PLEDGE AND SECURITY AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
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IN WITNESS WHEREOF, the Grantor and the Collateral Agent have caused this
Agreement to be duly executed as of the date first above written.
GRANTOR:
CARRIZO OIL & GAS, INC.
By: /s/ XXXX X. XXXXXX
-------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and
Chief Financial Officer
COLLATERAL AGENT:
PCRL INVESTMENTS L.P.,
Collateral Agent for the Holders
By: /s/ XXXXXXX X. XXXX
-------------------
Name: Xxxxxxx X. Xxxx
Title: Authorized Signatory
