Exhibit 10.1

Execution Version

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

CARRIZO OIL & GAS, INC.

AND

THE GSO FUNDS PARTY HERETO

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Table of Contents

 

          Page  

ARTICLE I DEFINITIONS

     1  

Section 1.01

   Definitions      1  

Section 1.02

   Registrable Securities      6  

ARTICLE II REGISTRATION RIGHTS

     6  

Section 2.01

   Shelf Registration      6  

Section 2.02

   Delay Rights      8  

Section 2.03

   Underwritten Offerings      9  

Section 2.04

   Sale Procedures      10  

Section 2.05

   Cooperation by Holders      14  

Section 2.06

   Restrictions on Sales      14  

Section 2.07

   Expenses      14  

Section 2.08

   Indemnification      15  

Section 2.09

   Rule 144 Reporting      17  

Section 2.10

   Transfer or Assignment of Registration Rights      18  

Section 2.11

   Preferred Share Sale Cooperation      18  

ARTICLE III MISCELLANEOUS

     19  

Section 3.01

   Termination and Effect of Termination      19  

Section 3.02

   Communications      19  

Section 3.03

   Successor and Assigns      20  

Section 3.04

   Assignment of Rights      20  

Section 3.05

   Recapitalization, Exchanges, Etc.      20  

Section 3.06

   Specific Performance      21  

Section 3.07

   Counterparts      21  

Section 3.08

   Headings      21  

Section 3.09

   Governing Law; Venue; Waivers      21  

Section 3.10

   Severability of Provisions      22  

Section 3.11

   Entire Agreement      22  

Section 3.12

   Amendment      23  

Section 3.13

   No Presumption      23  

Section 3.14

   Obligations Limited to Parties to Agreement      23  

Section 3.15

   Interpretation      24  

 

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This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of August 10, 2017, by and among Carrizo Oil & Gas, Inc., a Texas corporation
(the “Corporation”), and the funds managed by GSO that are identified in
Schedule A to the Purchase Agreement (as defined below) and specified on the
signature pages hereof (the “GSO Funds”).

WHEREAS, this Agreement is entered into in connection with the closing of the
issuance of the Preferred Shares (as defined below) and the Warrants (as defined
below) to the GSO Funds pursuant to the Preferred Stock Purchase Agreement,
dated June 28, 2017 (the “Purchase Agreement”), by and among the Corporation and
the GSO Funds; and

WHEREAS, the Corporation has agreed to provide the registration and other rights
set forth in this Agreement for the benefit of the GSO Funds pursuant to the
Purchase Agreement; and

WHEREAS, it is a condition to the obligations of the GSO Funds and the
Corporation under the Purchase Agreement that this Agreement be executed and
delivered.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each party hereto, the parties hereby agree as
follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. Capitalized terms used herein without definition shall
have the meanings given to them in the Purchase Agreement. The terms set forth
below are used herein as so defined:

“Affiliate” shall have the meaning ascribed to it, on the date hereof, in Rule
405 under the Securities Act. For purposes of this Agreement, (i) The Blackstone
Group, L.P. and all private equity funds, portfolio companies, parallel
investment entities, and alternative investment entities owned, managed, or
Controlled by The Blackstone Group, L.P. or its Affiliates that are not part of
the credit-related businesses of The Blackstone Group L.P. shall not be
considered or otherwise deemed to be an “Affiliate” of the Purchasers or their
Affiliates that are part of the credit-related businesses of The Blackstone
Group L.P., other than with respect to Section 2.08 and Section 3.14; and
(ii) any fund or account managed, advised or sub-advised by or Controlled by GSO
or its Affiliates within the credit-related businesses of The Blackstone Group
L.P. shall constitute an Affiliate of the Purchasers.

“Agreement” has the meaning specified therefor in the introductory paragraph of
this Agreement.

“Beneficially Own” has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular “person” (as that term is used in Section 13(d)(3)
of the Exchange Act), such “person” will be deemed to have beneficial ownership
of all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time.

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“Board” means the Board of Directors of the Corporation or, with respect to any
action to be taken by the Board of Directors, any committee of the Board of
Directors duly authorized to take such action.

“Business Day” means any day other than a Saturday, Sunday, any federal legal
holiday or day on which banking institutions in the State of New York or State
of Texas are authorized or required by law or other governmental action to
close.

“Closing Date” means August 10, 2017.

“Common Share Price” means the volume weighted average closing price of Common
Shares (as reported by the NASDAQ or, if the NASDAQ is not the Corporation’s
primary securities exchange or market, such primary securities exchange or
market) for the ten (10) trading days immediately preceding the date on which
the determination is made (or, if such price is not available, as determined in
good faith by the Board).

“Common Shares” means the shares of common stock, par value $0.01 per share, of
the Corporation.

“Control” means the possession, directly or indirectly, of the power to direct,
or cause the direction of, the management and policies of a Person whether
though the ownership of voting securities, by contract or otherwise. The terms
“Controlled” and “Controlling” shall have correlative meanings.

“Corporation” has the meaning specified therefor in the introductory paragraph
of this Agreement.

“Delay Notice” has the meaning specified thereof in Section 2.02 of this
Agreement.

“Effective Date” means, with respect to a particular Shelf Registration
Statement, the date of effectiveness of such Shelf Registration Statement.

“Effectiveness Period” means, with respect to a Shelf Registration Statement,
the period beginning on the Effective Date for the Shelf Registration Statement
and ending at the time all Registrable Securities covered by such Shelf
Registration Statement have ceased to be Registrable Securities; provided that
the Effectiveness Period shall recommence upon receipt of Registrable Securities
covered by such Shelf Registration Statement by the Holder from the Corporation
(or the receipt of other securities from the Corporation which causes securities
held by the Holder to be Registrable Securities) until such time as all such
securities cease to be Registrable Securities.

“Electing Holders” has the meaning specified therefor in Section 2.03 of this
Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.

 

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“FINRA” has the meaning specified therefor in Section 2.04(f) of this Agreement.

“First Redemption” means the first redemption of Preferred Shares for Common
Shares in accordance with the Statement of Resolutions.

“Freely Tradable” means, with respect to any Common Shares, that such security
is no longer subject to the restrictions on trading under the provisions of
Rule 144 under the Securities Act (or any successor rule or regulation to
Rule 144 then in force), including volume and manner of sale restrictions, and
the current public information requirement of Rule 144(c) (or any successor rule
or regulation to Rule 144 then in force) no longer applies; provided that if a
Holder becomes the Beneficial Owner of greater than 10% of the Corporation’s
then outstanding Common Shares as a result of the Corporation issuing Common
Shares to such Holder, such Holder’s securities in the Corporation shall be
deemed not to be Freely Tradable for so long as such Holder is the Beneficial
Owner of greater than 10% of the Corporation’s outstanding Common Shares.

“Governmental Authority” means any federal, state, local or foreign government,
or other governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body.

“GSO” means GSO Capital Partners LP, a Delaware limited partnership.

“GSO Funds” has the meaning specified therefor in the introductory paragraph of
this Agreement and shall include any transferee or assignee of Registrable
Securities that is a fund or account managed, advised or sub-advised by GSO or
its Affiliates that agrees with the Company to be bound by the terms of this
Agreement.

“Holder” means the record holder of any Registrable Securities.

“Interruption Period” has the meaning specified therefor in Section 2.04 of this
Agreement.

“Law” means any statute, law, ordinance, regulation, rule, order, code,
governmental restriction, decree, injunction or other requirement of law, or any
judicial or administrative interpretation thereof, of any Governmental
Authority.

“Losses” has the meaning specified therefor in Section 2.08(a) of this
Agreement.

“Managing Underwriter” means, with respect to any Underwritten Offering, the
book-running lead manager of such Underwritten Offering.

“NASDAQ” means the NASDAQ Global Select Market.

“Offering Persons” has the meaning specified therefor in Section 2.04(j) of this
Agreement.

 

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“Permitted Number of Underwritten Offerings” shall initially mean three;
provided, that, (x) if (A) immediately prior to the First Redemption, the
aggregate Liquidation Preference of outstanding Preferred Shares, or (B) at the
time of the delivery of the applicable Underwritten Offering Notice, the
aggregate Registrable Securities Amount of all Holders’ Registrable Securities,
is less than $300 million, the Permitted Number of Underwritten Offerings shall
be two, and, (y) if (A) immediately prior to the First Redemption, the aggregate
Liquidation Preference of outstanding Preferred Shares, or (B) at the time of
the delivery of the applicable Underwritten Offering Notice, the aggregate
Registrable Securities Amount of all Holders’ Registrable Securities, is less
than $150 million, the Permitted Number of Underwritten Offerings shall be one.
For the sake of clarity, any sale of Registrable Securities pursuant to an
Underwritten Offering Notice shall count against the Permitted Number of
Underwritten Offerings as determined at any given time, notwithstanding that
such sale may have occurred prior to a reduction in the Permitted Number of
Underwritten Offerings pursuant to the terms of this definition.

“Person” means an individual or a corporation, limited liability company,
corporation, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.

“Preferred Shares” means the shares of Series A preferred stock, par value $0.01
per share, of the Corporation issued by the Corporation to the GSO Funds
pursuant to the Purchase Agreement, and all securities issued upon division or
combination of, or in substitution for, such shares of Series A preferred stock,
including any Substantially Equivalent Security (as defined in the Statement of
Resolutions).

“Purchase Agreement” has the meaning specified therefor in the recitals of this
Agreement.

“Registrable Securities” means, subject to Section 1.02, (i) the Preferred
Shares, (ii) the Common Shares issued or issuable pursuant to the terms of the
Preferred Shares, including upon redemption of any Preferred Shares and in
payment of dividends thereon, (iii) the Common Shares issued or issuable upon
the exercise of the Warrants, (iv) any Common Shares purchased by a Holder from
the underwriters of a firm commitment offering by the Corporation and (v) any
other Common Shares owned by a Holder and issued to a Holder by the Corporation,
and includes, in each case, any type of ownership interest issued to the Holder
as a result of Section 3.05 of this Agreement.

“Registrable Securities Amount” means (i) with respect to Common Shares, the
calculation based on the product of the Common Share Price times the number of
applicable Registrable Securities and (ii) with respect to Preferred Shares, the
calculation based on the product of the Liquidation Preference (as defined in
the Statement of Resolutions) times the number of applicable Registrable
Securities.

“Registration Expenses” has the meaning specified therefor in Section 2.07(b) of
this Agreement.

“Required Holders” means Holders of greater than 50% of the Registrable
Securities; provided that for purposes of determining such amount, (i) the
amount of Preferred Shares will be calculated based on the product of the
Liquidation Preference (as defined in the Statement of Resolutions) times the
number of applicable Registrable Securities and (ii) the amount Common Shares
will be calculated based on the product of the Common Share Price times the
number of applicable Registrable Securities.

 

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“Resale Shelf Registration Statement” has the meaning specified therefor in
Section 2.01(a) of this Agreement.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

“Selling Expenses” has the meaning specified therefor in Section 2.07(b) of this
Agreement.

“Selling Holder” means a Holder who is selling Registrable Securities under a
registration statement pursuant to the terms of this Agreement.

“Selling Holder Indemnified Persons” has the meaning specified therefor in
Section 2.08(a) of this Agreement.

“Shelf Registration Statement” means a registration statement under the
Securities Act to permit the public resale of the Registrable Securities from
time to time as permitted by Rule 415 under the Securities Act (or any successor
or similar provision adopted by the SEC then in effect), including the Resale
Shelf Registration Statement or a Subsequent Shelf Registration Statement, as
applicable.

“Statement of Resolutions” means the Statement of Resolutions of 8.875%
Redeemable Preferred Stock of the Corporation, dated as of August 10, 2017.

“Subsequent Shelf Registration Statement” has the meaning specified therefor in
Section 2.01(b) of this Agreement.

“Underwritten Offering” means an offering (including an offering pursuant to a
Shelf Registration Statement) in which Registrable Securities are sold to one or
more underwriters on a firm commitment basis for reoffering to the public or an
offering that is a “bought deal” or “block trade” with one or more investment
banks.

“Underwritten Offering Notice” has the meaning specified therefor in
Section 2.03 of this Agreement.

“Underwritten Offering Threshold” means the lesser of (i) $100 million of
Registrable Securities (calculated based on the Registrable Securities Amount of
Common Shares) or (ii), upon or following the First Redemption, a number of
Common Shares that were issued to holders of Preferred Shares in redemption of
at least $100 million of Liquidation Preference pursuant to the Statement of
Resolutions.

 

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“Warrants” means the Series A warrants, and all warrants issued upon division or
combination of, or in substitution for such warrants, issued pursuant to the
Warrant Agreement, dated as of August 10, 2017, between the Corporation and
Wells Fargo Bank, N.A.

Section 1.02 Registrable Securities. Any Registrable Security shall cease to be
a Registrable Security at the earliest of the following: (a) when a registration
statement covering such Registrable Security becomes or has been declared
effective by the SEC and such Registrable Security has been sold or disposed of
pursuant to such effective registration statement; (b) when such Registrable
Security has been sold or disposed of (excluding transfers or assignments by a
Holder to an Affiliate) pursuant to Rule 144 under the Securities Act (or any
successor or similar provision adopted by the SEC then in effect) under
circumstances in which all of the applicable conditions of Rule 144 (as then in
effect) are met; (c) when such Registrable Security is held by the Corporation
or one of its Affiliates; or (d) when such Registrable Security has been sold or
disposed of in a private transaction in which the transferor’s rights under this
Agreement are not assigned to the transferee of such securities pursuant to
Section 2.10 hereof. In addition, any Registrable Security that is a Common
Share will not be a Registrable Security at any time that it is Freely Tradable
or if the number of Registrable Securities that are Common Shares represent less
than 1% of the then-outstanding Common Shares; provided that, for the avoidance
of doubt, a Common Share that is not a Registrable Security because it is Freely
Tradable or because the number of Registrable Securities that are Common Shares
represent less than 1% of the then-outstanding Common Shares will become a
Registrable Security to the extent it is subsequently not Freely Tradable or if
the number of Registrable Securities that are Common Shares represent at least
1% of the then-outstanding Common Shares.

ARTICLE II

REGISTRATION RIGHTS

Section 2.01 Shelf Registration.

(a) Resale Shelf Registration Statement. Within 90 days of the Closing Date, the
Corporation shall use its commercially reasonable efforts to prepare and file
with the SEC a registration statement covering the sale or distribution from
time to time by the Holders, on a delayed or continuous basis pursuant to Rule
415 of the Securities Act, to permit the public resale of all Registrable
Securities on the terms and conditions specified in this Section 2.01 (the
“Resale Shelf Registration Statement”). The Resale Shelf Registration Statement
shall not include the Registrable Securities of any Person who is not a Holder
under this Agreement. The Resale Shelf Registration Statement filed with the SEC
pursuant to this Section 2.01 shall be on Form S-3 or, if Form S-3 is not then
available to the Corporation, on Form S-1 or such other form of registration
statement as is then available to effect a registration for resale of the
Registrable Securities, covering the Registrable Securities, and shall contain a
prospectus in such form as to permit any Selling Holder covered by such Resale
Shelf Registration Statement to sell such Registrable Securities pursuant to
Rule 415 under the Securities Act (or any successor or similar provision adopted
by the SEC then in effect) at any time beginning on the Effective Date for such
Resale Shelf Registration Statement. The Corporation shall use its commercially
reasonable efforts to cause the Resale Shelf Registration Statement filed
pursuant to this Section 2.01 to be declared effective as soon as practicable
after the filing thereof (it being agreed that the Resale Shelf Registration
Statement shall be an automatic shelf registration statement that shall become
effective upon filing with the SEC pursuant to Rule 462(e) if Rule 462(e) is
available to the Corporation).

 

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(b) Subsequent Shelf Registration Statement. If a Shelf Registration Statement
filed pursuant to this Agreement ceases to be effective under the Securities Act
for any reason at any time during the Effectiveness Period, the Corporation
shall use its commercially reasonable efforts as promptly as is reasonably
practicable to cause such Shelf Registration Statement to again become effective
under the Securities Act (including obtaining the prompt withdrawal of any order
suspending the effectiveness of such Shelf Registration Statement), and shall
use its commercially reasonable efforts as promptly as is reasonably practicable
to amend such Shelf Registration Statement in a manner reasonably expected to
result in the withdrawal of any order suspending the effectiveness of such Shelf
Registration Statement or file an additional registration statement (a
“Subsequent Shelf Registration Statement”) for an offering to be made on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act
registering the resale from time to time by the Holders thereof of all
securities that are Registrable Securities as of the time of such filing and not
registered pursuant to another Shelf Registration Statement. If any Registrable
Securities are not included by the Corporation on the Resale Shelf Registration
Statement, the Corporation shall, upon request by the Required Holders, file a
Subsequent Shelf Registration Statement. No Subsequent Shelf Registration
Statement may include the Registrable Securities of any Person who is not a
Holder under this Agreement. If a Subsequent Shelf Registration Statement is
filed, the Corporation shall use its commercially reasonable efforts to
(a) cause such Subsequent Shelf Registration Statement to become effective under
the Securities Act as promptly as is reasonably practicable after the filing
thereof (it being agreed that the Subsequent Shelf Registration Statement shall
be an automatic shelf registration statement that shall become effective upon
filing with the SEC pursuant to Rule 462(e) if Rule 462(e) is available to the
Corporation) and (b) keep such Subsequent Shelf Registration Statement
continuously effective until the end of the Effectiveness Period. Any such
Subsequent Shelf Registration Statement shall be a registration statement on
Form S-3 to the extent that the Corporation is eligible to use such form.
Otherwise, such Subsequent Shelf Registration Statement shall be on another
appropriate form and shall provide for the registration of such Registrable
Securities for resale by the Holders in accordance with any reasonable method of
distribution elected by the Required Holders.

(c) Effectiveness Period. A Shelf Registration Statement shall provide for the
resale pursuant to any method or combination of methods legally available to,
and requested by, the Selling Holders, including by way of an Underwritten
Offering, if such an election has been made pursuant to Section 2.03 of this
Agreement. During the Effectiveness Period, the Corporation shall use its
commercially reasonable efforts to cause a Shelf Registration Statement filed
pursuant to this Section 2.01 to remain effective, and to be supplemented and
amended to the extent necessary to ensure that such Shelf Registration Statement
is available or, if not available, that another registration statement is
available for the resale of the Registrable Securities until all Registrable
Securities have ceased to be Registrable Securities. The Corporation shall
prepare and file all necessary information with the NASDAQ (or such other
national securities exchange on which the Registrable Securities are then listed
and traded) to list the Registrable Securities covered by a Shelf Registration
Statement and shall use its commercially reasonable efforts to have such
Registrable Securities approved for listing on the NASDAQ (or such other
national securities exchange on which the Registrable Securities are

 

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then listed and traded) by the date of any sale or distribution of such
Registrable Securities, subject only to official notice of issuance. As soon as
practicable following the Effective Date of a Shelf Registration Statement, but
in any event within three Business Days of such date, the Corporation shall
notify the Holders of the effectiveness of such Shelf Registration Statement.

(d) Underwriting. If the Managing Underwriter of any proposed Underwritten
Offering of Registrable Securities advises the Corporation that the inclusion of
all of the Selling Holders’ Registrable Securities that the Selling Holders
intend to include in such offering exceeds the number that can be sold in such
offering without being likely to have an adverse effect on the price, timing or
distribution of the Registrable Securities offered or the market for the
Registrable Securities, then the Registrable Securities to be included in such
Underwritten Offering shall include the number of Registrable Securities that
such Managing Underwriter advises the Corporation can be sold without having
such adverse effect, with such number to be allocated to the Selling Holders,
allocated among such Selling Holders pro rata on the basis of the number of
Registrable Securities held by each such Selling Holder or in such other manner
as such Selling Holders may agree. The Corporation will not include in any
Underwritten Offering of Registrable Securities pursuant to this Agreement any
securities that are not Registrable Securities without the prior written consent
of the Selling Holders.

Section 2.02 Delay Rights.

Notwithstanding anything to the contrary contained herein, the Corporation may,
upon written notice (a “Delay Notice”) to (i) all Holders, delay the filing of a
Shelf Registration Statement required under Section 2.01, or (ii) any Selling
Holder whose Registrable Securities are included in a Shelf Registration
Statement or other registration statement contemplated by this Agreement,
suspend such Selling Holder’s use of any prospectus that is a part of such Shelf
Registration Statement or other registration statement (in which event the
Selling Holder shall discontinue sales of the Registrable Securities pursuant to
such Shelf Registration Statement or other registration statement contemplated
by this Agreement but may settle any previously made sales of Registrable
Securities) if the Corporation (x) is pursuing an acquisition, merger, tender
offer, reorganization, disposition, financing, securities offering or other
similar transaction and the Board determines in good faith that (A) the
Corporation’s ability to pursue or consummate such a transaction would be
materially adversely affected by any required disclosure of such transaction in
such Shelf Registration Statement or other registration statement or (B) such
transaction renders the Corporation unable to comply with SEC requirements, in
each case under circumstances that would make it impractical or inadvisable to
cause the Shelf Registration Statement (or such filings) to become effective or
to promptly amend or supplement the Shelf Registration Statement on a
post-effective basis, as applicable, (y) has experienced some other material
non-public event the disclosure of which at such time, in the good faith
judgment of the Board, would materially adversely affect the Corporation or
(z) would, in the absence of such delay or suspension, either be required to
prematurely disclose material information that the Corporation has a bona fide
business purpose for preserving as confidential or would be rendered unable to
comply with the requirements under the Securities Act or the Exchange Act;
provided, however, in no event shall (A) such filing of such Shelf Registration
Statement be delayed under clauses (x), (y) or (z) of this Section 2.02 for a
period that exceeds 90 calendar days or (B) such Selling Holders be suspended
under clauses (x), (y) or (z) of this Section 2.02 from selling Registrable
Securities pursuant to such Shelf Registration Statement or other registration

 

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statement for a period that exceeds an aggregate of 90 calendar days in any
365 calendar-day period, in each case, exclusive of days covered by any lock-up
agreement executed by a Selling Holder in connection with any Underwritten
Offering. The Holders agree to keep the existence and contents of the Delay
Notice confidential and not to use such information for any other purpose. Upon
disclosure of such information or the termination of the condition described
above, the Corporation shall provide prompt notice, but in any event within one
Business Day of such disclosure or termination, to the Selling Holders whose
Registrable Securities are included in such Shelf Registration Statement and
shall promptly terminate any suspension of sales it has put into effect and
shall take such other reasonable actions to permit registered sales of
Registrable Securities as contemplated in this Agreement.

Section 2.03 Underwritten Offerings. In the event that the Required Holders
elect to sell or distribute at least the Underwritten Offering Threshold in the
aggregate pursuant to a Shelf Registration Statement pursuant to an Underwritten
Offering of Common Shares, the Required Holders shall deliver a notice of such
election to the Corporation (such request, an “Underwritten Offering Notice” and
such electing Holders, the “Electing Holders”); provided, however, that the
Required Holders shall have the option and right to require the Corporation to
effect not more than the Permitted Number of Underwritten Offerings pursuant to
and subject to the conditions of this Section 2.03. Upon delivery of such
Underwritten Offering Notice to the Corporation, the Corporation shall as soon
as practicable (but in no event later than one Business Day following the date
of delivery of the Underwritten Offering Notice to the Corporation) deliver
notice of such Underwritten Offering Notice to all other Holders, who shall then
have two Business Days (or one Business Day in the case of an underwritten
“bought deal” or “block trade”) from the date that such notice is given to them
to notify the Corporation in writing of the number of Registrable Securities
held by such Holder that they want to be included in such Underwritten Offering.
Upon receipt of an Underwritten Offering Notice, the Corporation shall as soon
as practicable use its commercially reasonable efforts to facilitate such
Underwritten Offering. In the case of an underwritten “bought deal” or “block
trade,” the Underwritten Offering Notice shall be given not less than three
Business Days prior to the day the offering is to commence. In connection with
any Underwritten Offering of Registrable Securities under this Agreement, the
Managing Underwriter or Underwriters shall be selected by the Electing Holders
and shall be reasonably acceptable to the Corporation. In connection with an
Underwritten Offering contemplated by this Agreement in which a Selling Holder
participates, each Selling Holder and the Corporation shall be obligated to
enter into an underwriting agreement that contains such representations,
covenants, indemnities and other rights and obligations as are customary in
underwriting agreements for firm commitment offerings of securities. No Selling
Holder may participate in such Underwritten Offering unless such Selling Holder
agrees to sell its Registrable Securities on the basis provided in such
underwriting agreement and completes and executes all questionnaires, powers of
attorney, indemnities and other documents reasonably required under the terms of
such underwriting agreement. No Selling Holder shall be required to make any
representations or warranties to or agreements with the Corporation or the
underwriters other than representations, warranties or agreements regarding such
Selling Holder, its authority to enter into such underwriting agreement and to
sell, and its ownership of, the securities whose offer and resale will be
registered, on its behalf, its intended method of distribution and any other
representation required by Law. If any Selling Holder disapproves of the terms
of an underwriting, such Selling Holder may elect to withdraw therefrom by
notice to the Corporation, the Electing Holders and the Managing Underwriter;
provided, however, that

 

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any such withdrawal must be made no later than the time of pricing of such
Underwritten Offering. If all Selling Holders withdraw from an Underwritten
Offering prior to the pricing of such Underwritten Offering or if the
registration statement relating to an Underwritten Offering is suspended
pursuant to Section 2.02, the events will not be considered an Underwritten
Offering and will not decrease the number of available Underwritten Offerings
the Required Holders have the right and option to request under this
Section 2.03. No such withdrawal or abandonment shall affect the Corporation’s
obligation to pay Registration Expenses pursuant to Section 2.07.

Section 2.04 Sale Procedures.

In connection with its obligations under this Article II, the Corporation shall,
as expeditiously as possible:

(a) prepare and promptly file with the SEC a Shelf Registration Statement with
respect to any Registrable Securities and use commercially reasonable efforts to
cause such Shelf Registration Statement to become and remain effective for the
period of the distribution contemplated thereby, in accordance with the
applicable provisions of this Agreement;

(b) furnish to the Holders’ legal counsel copies of each Shelf Registration
Statement and the prospectus included therein (including each preliminary
prospectus) proposed to be filed and provide such legal counsel a reasonable
opportunity to review and comment on any such Shelf Registration Statement;

(c) prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to any Shelf Registration Statement and the
prospectus used in connection herewith as may be necessary to keep any such
Shelf Registration Statement effective for the Effectiveness Period and as may
be necessary to comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by any such Shelf
Registration Statement in accordance with the Selling Holders’ intended method
of distribution set forth in such Shelf Registration Statement;

(d) to the extent not publicly available, furnish or otherwise make available to
each Selling Holder (i) as far in advance as reasonably practicable before
filing a Shelf Registration Statement or any other registration statement
contemplated by this Agreement or any supplement or amendment thereto, upon
request, copies of reasonably complete drafts of all such documents proposed to
be filed (including exhibits and each document incorporated by reference therein
to the extent then required by the rules and regulations of the SEC other than
annual or quarterly reports on Forms 10-K or 10-Q, respectively, current reports
on Form 8-K or proxy statements; provided, however, that such reports or proxy
statements shall be provided at least two Business Days prior to filing in
connection with any Underwritten Offering), and provide each such Selling Holder
the opportunity to object to any information pertaining to such Selling Holder
and its plan of distribution that is contained therein and make the corrections
reasonably requested by such Selling Holder with respect to such information
prior to filing a Shelf Registration Statement or such other registration
statement or supplement or amendment thereto, and (ii) such number of copies of
such Registration Statement or such other registration statement and the
prospectus included therein and any supplements and amendments thereto as such
Selling Holder may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities covered by such Shelf
Registration Statement or other registration statement;

 

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(e) if applicable, use its commercially reasonable efforts to register or
qualify the Registrable Securities covered by a Shelf Registration Statement or
any other registration statement contemplated by this Agreement under the
securities or blue sky laws of such jurisdictions as the Selling Holders or, in
the case of an Underwritten Offering, the Managing Underwriter, shall reasonably
request; provided, however, that the Corporation shall not be required to
qualify generally to transact business in any jurisdiction where it is not then
required to so qualify or to take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject;

(f) cooperate with the Selling Holders and each underwriter or agent
participating in the disposition of Registrable Securities and their respective
counsel in connection with any filings required to be made with Financial
Industry Regulatory Authority, Inc. (“FINRA”), including the use of commercially
reasonable efforts to obtain FINRA’s pre-clearance or pre-approval of the
registration statement and applicable prospectus upon filing with the SEC;

(g) upon request and subject to appropriate confidentiality obligations, furnish
to each Selling Holder copies of any and all transmittal letters or other
correspondence with the SEC or any other governmental agency or self-regulatory
body or other body having jurisdiction (including any domestic or foreign
securities exchange) relating to such offering of Registrable Securities;

(h) promptly notify each Selling Holder, at any time when a prospectus relating
thereto is required to be delivered by any of them under the Securities Act, of
(i) the filing of a Shelf Registration Statement or any other registration
statement contemplated by this Agreement or any prospectus or prospectus
supplement to be used in connection therewith, or any amendment or supplement
thereto, and, with respect to such Shelf Registration Statement or any other
registration statement or any post-effective amendment thereto, when the same
has become effective; (ii) the receipt of any written comments from the SEC with
respect to any filing referred to in clause (i); and (iii) any written request
by the SEC for amendments or supplements to such Shelf Registration Statement or
any other registration statement or any prospectus or prospectus supplement
thereto or for additional information;

(i) promptly notify each Selling Holder, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of (i) the
happening of any event as a result of which the prospectus or prospectus
supplement contained in a Shelf Registration Statement or any other registration
statement contemplated by this Agreement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading (in
the case of any prospectus contained therein, in the light of the circumstances
under which a statement is made); (ii) the issuance or express threat of
issuance by the SEC of any stop order suspending the effectiveness of such Shelf
Registration Statement or any other registration statement contemplated by this
Agreement, or the initiation of any proceedings for that purpose; or (iii) the
receipt by the Corporation of any notification with respect to the suspension of
the qualification

 

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of any Registrable Securities for sale under the applicable securities or blue
sky laws of any jurisdiction. Following the provision of such notice, the
Corporation agrees to as promptly as practicable amend or supplement the
prospectus or prospectus supplement or take other appropriate action so that the
prospectus or prospectus supplement does 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 in the light of the
circumstances then existing and to take such other commercially reasonable
action as is necessary to remove a stop order, suspension, threat thereof or
proceedings related thereto;

(j) in connection with a customary due diligence review, make available for
inspection by any Selling Holder, the Managing Underwriter or underwriter
participating in any such disposition of Registrable Securities, if any, and any
counsel or accountants retained by such Selling Holder, Managing Underwriter or
underwriter (collectively, the “Offering Persons”), at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Corporation and its
subsidiaries, and cause the officers, directors and employees of the Corporation
and its subsidiaries to supply all information and participate in customary due
diligence sessions in each case reasonably requested by any such Selling Holder,
Managing Underwriter, underwriter, counsel or accountant in connection with such
Registration Statement, subject to appropriate confidentiality obligations;

(k) in the case of an Underwritten Offering, use its commercially reasonable
efforts to furnish to the underwriters, (i) an opinion of counsel for the
Corporation dated the date of the closing under the underwriting agreement,
addressed to the underwriters, and (ii) a “comfort” letter (including customary
“negative assurance”), dated the pricing date of such Underwritten Offering and
a letter of like kind dated the date of the closing under the underwriting
agreement, in each case addressed to the underwriters, signed by the independent
public accountants who have certified the Corporation’s financial statements
included or incorporated by reference into the applicable registration
statement, and each of the opinion and the “comfort” letter shall be in
customary form and covering substantially the same matters with respect to such
registration statement (and the prospectus and any prospectus supplement
included therein) as have been customarily covered in opinions of issuer’s
counsel and in accountants’ letters delivered to the underwriters in
Underwritten Offerings of securities by the Corporation and such other matters
as such underwriters may reasonably request;

(l) in the event that the Registrable Securities are being offered in an
Underwritten Offering, enter into an underwriting agreement in accordance with
the applicable provisions of this Agreement; provided, however, that no
underwriting agreement shall require (1) the Corporation to enter into a lock-up
agreement unless (i) such underwriting agreement is executed in connection with
an Underwritten Offering of Common Shares and (ii) the lock-up agreement
required under such underwriting agreement does not exceed 45 days from the date
of the pricing of such offering and contains customary exceptions from the
Corporation’s own immediately preceding underwritten offering; and (2) the
officers, directors or any Affiliate of the Corporation to enter into a lock-up
agreement;

 

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(m) otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement, covering a
period of twelve months beginning within three months after the Effective Date
of such Shelf Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder;

(n) use its commercially reasonable efforts to cause all such Registrable
Securities registered pursuant to this Agreement to be listed on the primary
securities exchange or nationally recognized quotation system on which such
Registrable Securities are then listed or quoted;

(o) use its commercially reasonable efforts to cause the Registrable Securities
to be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of the
Corporation to enable the Selling Holders to consummate the disposition of such
Registrable Securities;

(p) provide a transfer agent and registrar for all Registrable Securities
covered by such registration statement not later than the Effective Date of such
registration statement;

(q) enter into customary agreements and take such other actions as are
reasonably requested by the Selling Holders or the underwriters, if any, in
order to expedite or facilitate the disposition of such Registrable Securities
(including, in the case of Underwritten Offerings of at least the Underwritten
Offering Threshold, making appropriate officers of the Corporation available to
participate (but only to the extent consistent with the Corporation’s practice
in connection with its own recent underwritten offerings of securities) in no
more than one telephonic “road show” presentation before analysts (for each
Underwritten Offering), and other customary marketing activities (including
one-on-one conference calls with prospective purchasers of the Registrable
Securities)); and

(r) if requested by the Managing Underwriter or underwriters, or any Selling
Holder, (i) as soon as practicable incorporate in a prospectus supplement or
post-effective amendment such information as the Managing Underwriter or
underwriters, or any Selling Holder reasonably requests to be included therein
relating to the sale and distribution of Registrable Securities, including
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering, and (ii) as
soon as practicable make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment.

The Corporation shall not name a Holder as an underwriter as defined in
Section 2(a)(11) of the Securities Act in any Shelf Registration Statement
without such Holder’s consent.

Each Selling Holder, upon receipt of notice from the Corporation of the
happening of any event of the kind described in Section 2.04(h)(iii) or
Section 2.04(i) shall forthwith discontinue offers and sales of the Registrable
Securities by means of a prospectus or prospectus supplement until such Selling
Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 2.04(h)(iii) or Section 2.04(i) or until it is advised
in writing by the Corporation that the use of the prospectus may be resumed and
has received copies of any

 

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additional or supplemental filings incorporated by reference in the prospectus
(such period during which disposition is discontinued being an “Interruption
Period”), and, if so directed by the Corporation, such Selling Holder shall, or
shall request the Managing Underwriter, if any, to deliver to the Corporation
(at the Corporation’s expense) all copies in their possession or control, other
than permanent file copies then in such Selling Holder’s possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. As soon as practicable after the Corporation has determined that
the use of the applicable prospectus may be resumed, the Corporation will notify
the Selling Holders thereof. In the event the Corporation invokes an
Interruption Period hereunder and in the reasonable discretion of the
Corporation the need for the Corporation to continue the Interruption Period
ceases for any reason, the Corporation shall, as soon as reasonably practicable,
provide written notice to the Selling Holders that such Interruption Period is
no longer applicable.

Section 2.05 Cooperation by Holders. The Corporation shall have no obligation to
include Registrable Securities of a Holder in a registration statement who has
failed to timely furnish after receipt of a written request from the Corporation
such information that the Corporation determines, after consultation with its
counsel, is reasonably required in order for the registration statement or
prospectus supplement, as applicable, to comply with the Securities Act.

Section 2.06 Restrictions on Sales. To the extent requested by the Managing
Underwriter, each Holder of Registrable Securities that participates in an
Underwritten Offering will enter into a customary letter agreement with
underwriters providing such Holder will not effect any public sale or
distribution of Registrable Securities during the period of 60 days beginning on
the date of a prospectus or prospectus supplement filed with the SEC with
respect to the pricing of any Underwritten Offering, provided that (i) the
duration of the foregoing restrictions shall be no longer than the duration of
the shortest restriction generally imposed by the underwriters on the
Corporation and (ii) the restrictions set forth in this Section 2.06 shall not
apply to any Registrable Securities that are included in such Underwritten
Offering by such Holder. In addition, this Section 2.06 shall not apply to any
Holder that is not entitled to participate in such Underwritten Offering,
whether because such Holder delivered an Opt-Out Notice prior to receiving
notice of the Underwritten Offering or because the Registrable Securities held
by such Holder may be disposed of without restriction pursuant to Rule 144 under
the Securities Act (or any successor or similar provision adopted by the SEC
then in effect).

Section 2.07 Expenses.

(a) Expenses. The Corporation shall pay all reasonable Registration Expenses as
determined in good faith by the Board, including, in the case of an Underwritten
Offering, the Registration Expenses of an Underwritten Offering, regardless of
whether any sale is made pursuant to such Underwritten Offering. Each Selling
Holder shall pay its pro rata share of all Selling Expenses in connection with
any sale of its Registrable Securities hereunder. For the avoidance of doubt,
each Selling Holder’s pro rata allocation of Selling Expenses shall be the
percentage derived by dividing (i) the number of Registrable Securities sold by
such Selling Holder in connection with such sale by (ii) the aggregate number of
Registrable Securities sold by all Selling Holders in connection with such sale.
In addition, except as otherwise provided in Sections 2.07 and 2.08 hereof, the
Corporation shall not be responsible for legal fees incurred by Holders in
connection with the exercise of such Holders’ rights hereunder.

 

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(b) Certain Definitions. “Registration Expenses” means the following expenses
incident to the Corporation’s performance under or compliance with this
Agreement to effect the registration of Registrable Securities on a Shelf
Registration Statement pursuant to Section 2.01 or an Underwritten Offering
covered under this Agreement, and the disposition of such Registrable
Securities, including, without limitation, all registration, filing, securities
exchange listing and NASDAQ fees, all registration, filing, qualification and
other fees and expenses of complying with securities or blue sky laws, fees of
the FINRA, fees of transfer agents and registrars, all word processing,
duplicating and printing expenses, and the fees and disbursements of counsel and
independent public accountants for the Corporation, including the expenses of
any special audits or “cold comfort” letters required by or incident to such
performance and compliance. “Selling Expenses” means all underwriting discounts
and selling commissions or similar fees or arrangements and related expenses
allocable to the sale of the Registrable Securities, transfer taxes and fees and
disbursements of counsel to the Selling Holders, except for the reasonable fees
and disbursements of counsel for the Selling Holders required to be paid by the
Corporation pursuant to Section 2.08.

Section 2.08 Indemnification.

(a) By the Corporation. In the event of a registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, the Corporation
shall indemnify and hold harmless each Selling Holder thereunder, its directors,
officers, managers, employees, agents and Affiliates and each Person, if any,
who controls such Selling Holder or its Affiliates within the meaning of the
Securities Act and the Exchange Act, and its directors, officers, employees or
agents (collectively, the “Selling Holder Indemnified Persons”), against any
losses, claims, damages, expenses or liabilities (including reasonable
attorneys’ fees and expenses) (collectively, “Losses”), joint or several, to
which such Selling Holder Indemnified Person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Losses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact (in the case of any prospectus, in light of the
circumstances under which such statement is made) contained in (which, for the
avoidance of doubt, includes documents incorporated by reference in) any
registration statement contemplated by this Agreement, any preliminary
prospectus, prospectus supplement or final prospectus contained therein, or any
amendment or supplement thereof, or any free writing prospectus relating thereto
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus, in light of the circumstances
under which they were made) not misleading, and shall reimburse each such
Selling Holder Indemnified Person for any legal or other expenses reasonably
incurred by them in connection with investigating, defending or resolving any
such Loss or actions or proceedings; provided, however, that the Corporation
shall not be liable in any such case if and to the extent that any such Loss
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in conformity with information furnished
by such Selling Holder Indemnified Person in writing specifically for use in
such registration statement or such other registration statement, or prospectus
supplement, as applicable. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Selling Holder
Indemnified Person, and shall survive the transfer of such securities by such
Selling Holder.

 

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(b) By Each Selling Holder. Each Selling Holder agrees severally and not jointly
to indemnify and hold harmless the Corporation, its directors, officers,
employees and agents and each Person, if any, who controls the Corporation
within the meaning of the Securities Act or of the Exchange Act, and its
directors, officers, employees and agents, to the same extent as the foregoing
indemnity from the Corporation to the Selling Holders, but only with respect to
information regarding such Selling Holder furnished in writing by or on behalf
of such Selling Holder expressly for inclusion in any registration statement
contemplated by this Agreement, any preliminary prospectus, prospectus
supplement or final prospectus contained therein, or any amendment or supplement
thereof, or any free writing prospectus relating thereto; provided, however,
that the liability of each Selling Holder shall not be greater in amount than
the dollar amount of the proceeds (net of any Selling Expenses) received by such
Selling Holder from the sale of the Registrable Securities giving rise to such
indemnification.

(c) Notice. Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission to so notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party other than under this Section 2.08 except to the extent
that the indemnifying party is materially prejudiced in its ability to defend
such action by such failure. In any action brought against any indemnified
party, it shall notify the indemnifying party of the commencement thereof. The
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 2.08 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected;
provided, however, that, (i) if the indemnifying party has failed to assume the
defense or employ counsel reasonably acceptable to the indemnified party or
(ii) if the defendants in any such action include both the indemnified party and
the indemnifying party and counsel to the indemnified party shall have concluded
that there may be reasonable defenses available to the indemnified party that
are different from or additional to those available to the indemnifying party,
or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, then the indemnified
party shall have the right to select one separate counsel and to assume such
legal defense and otherwise to participate in the defense of such action, with
the reasonable expenses and fees of such separate counsel and other reasonable
expenses related to such participation to be reimbursed by the indemnifying
party as incurred. Notwithstanding any other provision of this Agreement, no
indemnifying party shall settle any action brought against any indemnified party
with respect to which such indemnified party is entitled to indemnification
hereunder without the consent of the indemnified party (which shall not be
unreasonably withheld, delayed or conditioned), unless the settlement thereof
imposes no liability or obligation on, and includes a complete and unconditional
release from all liability of, the indemnified party. In addition, no
indemnifying party shall be liable for the settlement of any action effected
without its prior written consent (which shall not be unreasonably withheld,
delayed or conditioned).

 

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(d) Contribution. If the indemnification provided for in this Section 2.08 is
held by a court or government agency of competent jurisdiction to be unavailable
to any indemnified party or is insufficient to hold them harmless in respect of
any Losses, then each such 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 Loss in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and of
such indemnified party on the other in connection with the statements or
omissions that resulted in such Losses, as well as any other relevant equitable
considerations; provided, however, that in no event shall such Selling Holder be
required to contribute an aggregate amount in excess of the dollar amount of
proceeds (net of Selling Expenses) received by such Selling Holder from the sale
of Registrable Securities giving rise to such indemnification. The relative
fault of the indemnifying party on the one hand and the indemnified party on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact has been made by, or relates to, information
supplied by such party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this paragraph were to be determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to herein. The amount paid by an
indemnified party as a result of the Losses referred to in the first sentence of
this paragraph shall be deemed to include any legal and other expenses
reasonably incurred by such indemnified party in connection with investigating,
defending or resolving any Loss that is the subject of this paragraph. 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 is not
guilty of such fraudulent misrepresentation.

(e) Other Indemnification. The provisions of this Section 2.08 shall be in
addition to any other rights to indemnification or contribution that an
indemnified party may have pursuant to law, equity, contract or otherwise.

Section 2.09 Rule 144 Reporting.

With a view to making available the benefits of certain rules and regulations of
the SEC that may permit the sale of the Registrable Securities to the public
without registration, the Corporation agrees to use its commercially reasonable
efforts to:

(a) make and keep public information regarding the Corporation available, as
those terms are understood and defined in Rule 144 under the Securities Act (or
any successor or similar provision adopted by the SEC then in effect), at all
times from and after the date hereof;

(b) file with the SEC in a timely manner all reports and other documents
required of the Corporation under the Securities Act and the Exchange Act at all
times from and after the date hereof; and

 

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(c) so long as a Holder owns any Registrable Securities, furnish, unless
otherwise available electronically at no additional charge via the SEC’s EDGAR
system, to such Holder forthwith upon request a copy of the most recent annual
or quarterly report of the Corporation, and such other reports and documents as
such Holder may reasonably request in availing itself of any rule or regulation
of the SEC allowing such Holder to sell any such securities without
registration.

Section 2.10 Transfer or Assignment of Registration Rights.

(a) The rights to cause the Corporation to register Registrable Securities
granted to the GSO Funds by the Corporation under this Article II may be
transferred or assigned by the GSO Funds to one or more transferees or assignees
of Registrable Securities without the consent of the Corporation; provided,
however, that, other than in the case of transfers or assignments of Registrable
Securities to funds or accounts managed, advised or sub-advised by GSO or its
Affiliates, (a) the transfer or assignment relates to Preferred Shares
(including Common Shares issued or issuable as dividends or upon the redemption
of such Preferred Shares) and such Preferred Shares are transferred in
accordance with the terms of the Purchase Agreement, (b) any such transfer or
assignment with respect to such Preferred Shares is for a minimum of 20,000
Preferred Shares, (c) the Corporation is given written notice prior to any said
transfer or assignment, stating the name and address of each of the transferee
or assignee and (d) each such transferee or assignee assumes in writing
responsibility for its portion of the obligations of the GSO Funds under this
Agreement.

(b) Notwithstanding anything in this Agreement to the contrary, if any Preferred
Shares are sold or disposed of as described in clause (a) or (b) of Section 1.02
and the transferor’s rights under this Agreement are assigned to the transferee
of such securities pursuant to this Section 2.10, any such outstanding Preferred
Shares held by such transferee are deemed to be Registrable Securities solely
for the purposes of Section 3.01. Any Common Shares issued by the Corporation
upon redemption of Preferred Shares shall be Registrable Securities to the
extent such Common Shares are not Freely Tradable or, to the extent such Common
Shares are Freely Tradable, they represent at least 1% of the then-outstanding
Common Shares.

Section 2.11 Preferred Share Sale Cooperation.

In connection with up to 10 sales or distributions of Preferred Shares by any
GSO Fund involving a Preferred Share amount (based on Liquidation Preference
times the number of applicable shares) of at least $20 million that does not
constitute an Underwritten Offering (including a sale pursuant to Rule 144 under
the Securities Act (or any successor or similar provision adopted by the SEC
then in effect) and any sale or distribution in a private transaction), the
Corporation shall take such actions as are reasonably requested by such Holder
in order to expedite or facilitate such sale or distribution, including making
appropriate officers of the Corporation, as determined by the Corporation in its
sole discretion, available to participate in not more than 20 one-on-one
conference calls in the aggregate under this Section 2.11, each of which shall
consist of an abbreviated investor presentation utilizing the Corporation’s then
current investor presentation and a question and answer session relating solely
to publicly available information.

 

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ARTICLE III

MISCELLANEOUS

Section 3.01 Termination and Effect of Termination.

This Agreement shall terminate with respect to each Holder when such Holder no
longer holds any Registrable Securities or Warrants the Common Stock issuable
upon exercise of which Warrants would be Registrable Securities and will
terminate in full when no Holder holds any Registrable Securities or Warrants
the Common Stock issuable upon exercise of which Warrants would be Registrable
Securities, except for the provisions of Section 2.06 and Section 2.07, which
shall survive any such termination. No termination under this Agreement shall
relieve any Person of liability for breach or Registration Expenses or Selling
Expenses incurred prior to termination. In the event this Agreement is
terminated, each Person entitled to indemnification rights pursuant to
Section 2.08 shall retain such indemnification rights with respect to any matter
that (i) may be an indemnified liability thereunder and (ii) occurred prior to
such termination.

Section 3.02 Communications.

All notices and other communications provided for or permitted hereunder shall
be made in writing by electronic mail, courier service or personal delivery:

 

  (a) if to the GSO Funds:

c/o GSO Capital Partners

1111 Bagby Street, Suite 2050

Houston, Texas 77002

Attention: Robert Horn

Email: robert.horn@gsocap.com

with a copy to:

c/o GSO Capital Partners

345 Park Avenue, 31st Floor

New York, New York 10154

Email: GSOLegal@gsocap.com

            GSOValuationsGroup@gsocap.com

with a copy to (which shall not constitute notice):

Kirkland & Ellis LLP

600 Travis Street, Suite 3300

Houston, Texas 77002

Attention: John D. Pitts

                 Tim Cruickshank

Email:       john.pitts@kirkland.com

                  tim.cruickshank@kirkland.com

 

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  (b) if to a transferee of a GSO Fund, to such Holder at the address provided
pursuant to Section 2.10 above; and

 

  (c) if to the Corporation:

Carrizo Oil & Gas, Inc.

500 Dallas Street

Suite 2300

Houston, TX 77002

Attention: Chief Financial Officer

Email: david.pitts@carrizo.com

with a copy to (which shall not constitute notice):

Carrizo Oil & Gas, Inc.

500 Dallas Street

Suite 2300

Houston, TX 77002

Attention: General Counsel

Email: gerry.morton@carrizo.com

Baker Botts L.L.P.

910 Louisiana Street

Houston, TX 77002

Attention: Gene Oshman

Email: gene.oshman@bakerbotts.com

All such notices and communications shall be deemed to have been received at the
time delivered by hand, if personally delivered; when receipt acknowledged, if
sent via electronic mail; and when actually received, if sent by courier service
or any other means.

Section 3.03 Successor and Assigns.

This Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of each of the parties, including subsequent Holders of
Registrable Securities to the extent permitted herein.

Section 3.04 Assignment of Rights.

All or any portion of the rights and obligations of the GSO Funds under this
Agreement may be transferred or assigned by each such GSO Fund only in
accordance with Section 2.10 hereof.

Section 3.05 Recapitalization, Exchanges, Etc.

The provisions of this Agreement shall apply to the full extent set forth herein
with respect to any and all equity interests of the Corporation or any successor
or assign of the Corporation (whether by merger, consolidation, sale of assets
or otherwise) that may be issued in respect of, in exchange for or in
substitution of, the Registrable Securities, and shall be appropriately adjusted
for combinations, share splits, recapitalizations, pro rata distributions of
shares and the like occurring after the date of this Agreement.

 

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Section 3.06 Specific Performance.

Damages in the event of breach of this Agreement by a party hereto may be
difficult, if not impossible, to ascertain, and it is therefore agreed that each
such Person, in addition to and without limiting any other remedy or right it
may have, shall have the right to an injunction or other equitable relief in any
court of competent jurisdiction, enjoining any such breach, and enforcing
specifically the terms and provisions hereof, and each of the parties hereto
hereby waives any and all defenses it may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or other
equitable relief. The existence of this right shall not preclude any such Person
from pursuing any other rights and remedies at law or in equity that such Person
may have.

Section 3.07 Counterparts.

This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, including facsimile or .pdf
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.

Section 3.08 Headings.

The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

Section 3.09 Governing Law; Venue; Waivers.

This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Texas without regard to principles of conflicts of
laws. Neither the Corporation nor any Holder shall be entitled to recover
(i) any exemplary, punitive or speculative damages under this Agreement or
(ii) any special, indirect, consequential, incidental damages or lost profits
under this Agreement, except (x) in the case of clause (ii), to the extent any
such damages or lost profits would otherwise be recoverable under Texas law in
an action for breach of contract or (y) in the case of clause (i) or clause
(ii), any such damages or lost profits arising from a breach of this Agreement
that are payable to a third party. The Corporation and each Holder of a
Registrable Security each hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating solely to this Agreement or the transactions contemplated hereby, to
the exclusive jurisdiction of the courts of the State of Texas and the Federal
courts of the United States of America, in each case located within the Southern
District of Texas, and appellate courts thereof;

(b) consents that any such action or proceeding may be brought in such courts,
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same
to the extent permitted by applicable law;

 

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(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the party, as the case
may be, at its address set forth in the Register or at such other address of
which the other party shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction for recognition and enforcement of any judgment or if
jurisdiction in the courts referenced in the foregoing clause (a) are not
available despite the intentions of the parties hereto;

(e) agrees that final judgment in any such suit, action or proceeding brought in
such a court may be enforced in the courts of any jurisdiction to which such
party is subject by a suit upon such judgment, provided that service of process
is effected upon such party in the manner specified herein or as otherwise
permitted by law;

(f) agrees that to the extent that such party has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process with respect
to itself or its property, such party hereby irrevocably waives such immunity in
respect of its obligations under this Agreement, to the extent permitted by law;
and

(g) IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING IN RELATION TO THIS AGREEMENT.

Section 3.10 Severability of Provisions.

Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting or impairing the validity or enforceability of
such provision in any other jurisdiction.

Section 3.11 Entire Agreement.

This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the rights granted by the Corporation set forth herein. This Agreement and the
Purchase Agreement supersede all prior agreements and understandings between the
parties with respect to such subject matter.

 

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Section 3.12 Amendment.

This Agreement may be amended only by means of a written amendment signed by the
Corporation and the Required Holders; provided that any amendment, modification,
supplement or waiver of any of the provisions of this Agreement which
disproportionately materially adversely affects any Holder shall not be
effective without the written approval of such Holder; but it is acknowledged
and agreed that the notice and other provisions of this Agreement may be waived
by the Required Holders with respect to any particular registration or
transaction. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not affect the rights of
other Holders of Registrable Securities may also be given by holders of greater
than 50% of the Registrable Securities being sold by such Holders pursuant to
such Registration Statement.

Section 3.13 No Presumption.

If any claim is made by a party relating to any conflict, omission or ambiguity
in this Agreement, no presumption or burden of proof or persuasion shall be
implied by virtue of the fact that this Agreement was prepared by or at the
request of a particular party or its counsel.

Section 3.14 Obligations Limited to Parties to Agreement.

Each of the parties hereto covenants, agrees and acknowledges that, other than
as set forth herein, no Person other than the Holders, their respective
permitted assignees and the Corporation shall have any obligation hereunder and
that, notwithstanding that one or more of such Persons may be a corporation,
partnership or limited liability company, no recourse under this Agreement or
under any documents or instruments delivered in connection herewith shall be had
against any former, current or future director, officer, employee, agent,
general or limited partner, manager, member, stockholder or Affiliate of any of
such Persons or their respective permitted assignees, or any former, current or
future director, officer, employee, agent, general or limited partner, manager,
member, stockholder or Affiliate of any of the foregoing, whether by the
enforcement of any assessment or by any legal or equitable proceeding, or by
virtue of any applicable law, it being expressly agreed and acknowledged that no
personal liability whatsoever shall attach to, be imposed on or otherwise be
incurred by any former, current or future director, officer, employee, agent,
general or limited partner, manager, member, stockholder or Affiliate of any of
such Persons or any of their respective assignees, or any former, current or
future director, officer, employee, agent, general or limited partner, manager,
member, stockholder or Affiliate of any of the foregoing, as such, for any
obligations of such Persons or their respective permitted assignees under this
Agreement or any documents or instruments delivered in connection herewith or
for any claim based on, in respect of or by reason of such obligation or its
creation, except, in each case, for any assignee of any Holder hereunder.

 

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Section 3.15 Interpretation.

Article and Section references are to this Agreement, unless otherwise
specified. All references to instruments, documents, contracts and agreements
are references to such instruments, documents, contracts and agreements as the
same may be amended, supplemented and otherwise modified from time to time,
unless otherwise specified. The words “include,” “includes” and “including” or
words of similar import shall be deemed to be followed by the words “without
limitation.” Whenever any determination, consent or approval is to be made or
given by the GSO Funds (and their respective transferees or assignees) under
this Agreement, such action shall be in each GSO Fund’s (and its respective
transferees’ or assignees’) sole discretion unless otherwise specified. Unless
expressly set forth or qualified otherwise (e.g., by “Business” or “trading”),
all references herein to a “day” are deemed to be a reference to a calendar day.

(Signature pages follow)

 

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IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of
the date first above written.

 

CARRIZO OIL & GAS, INC. By:  

/s/ David L. Pitts

Name:   David L. Pitts Title:   Vice President and Chief Financial Officer

Signature Page to Registration Rights Agreement

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HOLDERS:

GSO COF III AIV-6 LP            By:   GSO Capital Opportunities Associates III
LLC,     its general partner   By:   GSO Holdings I L.L.C.,     its managing
member   By:  

/s/ Marisa J. Beeney

  Name: Marisa J. Beeney   Title: Authorized Signatory

Signature Page to Registration Rights Agreement

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GSO COF III AIV-7 LP            By:   GSO Capital Opportunities Associates III
LLC,     its general partner   By:   GSO Holdings I L.L.C.,     its managing
member   By:  

/s/ Marisa J. Beeney

  Name: Marisa J. Beeney   Title: Authorized Signatory

Signature Page to Registration Rights Agreement

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GSO ENERGY SELECT OPPORTUNITIES FUND AIV-5 LP            By:   GSO Energy Select
Opportunities Associates LLC,     its general partner   By:   GSO Holdings I
L.L.C.,     its member   By:  

/s/ Marisa J. Beeney

  Name: Marisa J. Beeney   Title:  Authorized Signatory

Signature Page to Registration Rights Agreement

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GSO ENERGY SELECT OPPORTUNITIES FUND AIV-6 LP            By:   GSO Energy Select
Opportunities Associates LLC,     its general partner   By:   GSO Holdings I
L.L.C.,     its member   By:  

/s/ Marisa J. Beeney

  Name: Marisa J. Beeney   Title: Authorized Signatory

Signature Page to Registration Rights Agreement

--------------------------------------------------------------------------------

GSO ENERGY PARTNERS-A LP         By:   GSO Energy Partners-A Associates LLC,  
its general partner         By:  

/s/ Marisa J. Beeney

        Name: Marisa J. Beeney         Title: Authorized Signatory

Signature Page to Registration Rights Agreement

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GSO ENERGY PARTNERS-B LP         By:   GSO Energy Partners-B Associates LLC,  
its general partner         By:  

/s/ Marisa J. Beeney

        Name: Marisa J. Beeney         Title: Authorized Signatory

Signature Page to Registration Rights Agreement

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GSO ENERGY PARTNERS-C LP         By:   GSO Energy Partners-C Associates LLC,  
its general partner         By:  

/s/ Marisa J. Beeney

        Name: Marisa J. Beeney         Title: Authorized Signatory

Signature Page to Registration Rights Agreement

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GSO ENERGY PARTNERS-C II LP            By:   GSO Energy Partners-C Associates II
LLC,     its general partner   By:  

/s/ Marisa J. Beeney

  Name: Marisa J. Beeney   Title: Authorized Signatory

Signature Page to Registration Rights Agreement

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GSO ENERGY PARTNERS-D LP            By:   GSO Energy Partners-D Associates LLC,
    its general partner   By:  

/s/ Marisa J. Beeney

  Name: Marisa J. Beeney   Title: Authorized Signatory

Signature Page to Registration Rights Agreement

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GSO AIGUILLE DES GRANDS MONTETS FUND II LP            By:   GSO Capital Partners
LP,     as attorney-in-fact   By:  

/s/ Marisa J. Beeney

  Name: Marisa J. Beeney   Title: Authorized Signatory

Signature Page to Registration Rights Agreement

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GSO HARRINGTON CREDIT ALPHA FUND (CAYMAN) L.P.            By:   GSO Harrington
Credit Alpha Associates L.L.C.,     its general partner   By:  

/s/ Marisa J. Beeney

  Name: Marisa J. Beeney   Title: Authorized Signatory

Signature Page to Registration Rights Agreement

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GSO CREDIT ALPHA TRADING (CAYMAN) LP            By:   GSO Credit Alpha
Associates LLC,     its general partner   By:  

/s/ Marisa J. Beeney

  Name: Marisa J. Beeney   Title: Authorized Signatory

Signature Page to Registration Rights Agreement