EXHIBIT 99.3
CARRIZO OIL & GAS, INC.
(A TEXAS CORPORATION)
SHAREHOLDERS AGREEMENT
FEBRUARY 20, 2002
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION.....................................................................1
1.1 Definitions..........................................................................................1
1.2 Rules of Construction................................................................................8
ARTICLE II SHAREHOLDER VOTE IN FAVOR OF A MERGER.................................................................8
2.1 Shareholder Vote in Favor of a Merger................................................................8
ARTICLE III ISSUANCES AND TRANSFERS OF STOCK.....................................................................9
3.1 Joinder Agreement; Certain Transfers.................................................................9
3.2 Tag-Along Rights....................................................................................10
ARTICLE IV RIGHTS TO SUBSCRIBE FOR SECURITIES...................................................................11
4.1 General.............................................................................................11
4.2 Excluded Securities.................................................................................12
ARTICLE V AMENDMENT AND WAIVER..................................................................................12
5.1 Amendment...........................................................................................12
5.2 Waiver..............................................................................................12
ARTICLE VI DURATION; TERMINATION................................................................................13
ARTICLE VII MISCELLANEOUS.......................................................................................13
7.1 Severability........................................................................................13
7.2 Entire Agreement....................................................................................14
7.3 Certain Shareholders................................................................................14
7.4 Successors and Assigns..............................................................................14
7.5 Remedies............................................................................................14
7.6 Notices.............................................................................................15
7.7 GOVERNING LAW.......................................................................................16
7.8 Further Assurances..................................................................................17
7.9 Representation and Warranties of the Shareholders...................................................17
7.10 Legends; Stop Transfer Instructions.................................................................17
7.11 Conflicting Agreements..............................................................................18
7.12 Counterparts; Validity..............................................................................18
7.13 Consent of Spouses..................................................................................18
7.14 Fiduciary Duties....................................................................................19
7.15 Other Covenant......................................................................................19
SCHEDULES AND EXHIBITS
Schedule I - Shareholders
Exhibit A - Form of Joinder Agreement
Exhibit B - Spousal Consent
SHAREHOLDERS AGREEMENT dated as of February 20, 2002, among CARRIZO OIL
& GAS, INC., a
Texas corporation (the "COMPANY"), and the Shareholders (as
hereinafter defined).
PREAMBLE
The Company and the Investors (as hereinafter defined) who are
initially parties to this Agreement have entered into a Securities Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"), pursuant to
which such Investors acquired from the Company shares of Series B Convertible
Preferred Stock and Warrants. The execution and delivery of this Agreement is a
condition to the completion of the transactions contemplated by the Purchase
Agreement.
ACCORDINGLY, in consideration of the mutual covenants and
agreements contained in this Agreement, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
1.1 DEFINITIONS.
Capitalized terms used in this Agreement have the meanings ascribed to
them below:
"1999 SHAREHOLDERS' AGREEMENT" means the Shareholders'
Agreement, dated as of December 15, 1999, among the Company and the shareholders
named therein.
"AFFILIATE" means, with respect to any specified Person, any
other Person that directly or indirectly through one or more intermediaries
Controls, is Controlled by or is under common Control with such Person.
"APPLICABLE LAW" means all provisions of laws, statutes,
ordinances, rules, regulations, permits, certificates or orders of any
Governmental Authority applicable to the Person in question or any of its assets
or property, and all judgments, injunctions, orders and decrees of all courts
and arbitrators in proceedings or actions in which the Person in question is a
party or by which any of its assets or properties are bound.
"BOARD" and "BOARD OF DIRECTORS," unless otherwise specified,
means the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
a day on which banks are authorized or required to be closed in New York, New
York or Houston,
Texas; provided, however, that any determination of a Business
Day relating to a securities exchange or
other securities market means a Business Day on which such exchange or market is
open for trading.
"BY-LAWS" means the By-laws of the Company, as amended,
modified, supplemented or restated and in effect from time to time.
"CHANGE OF CONTROL" shall have the meaning assigned thereto in
the Statement of Resolution establishing the Series B Convertible Preferred
Stock.
"CHARTER" means the Articles of Incorporation of the Company
as amended and restated and filed with the Secretary of State of the State of
Texas and all amendments thereto in effect on the date hereof.
"CLOSING PRICE" with respect to a particular Security on any
day shall mean on such day the reported last sales price, regular way, for such
Security or, in case no such reported sale takes place on such day, the average
of the reported closing bid and asked prices, regular way, for such Security in
either case as reported on the New York Stock Exchange, on the principal
national securities exchange on which such Security is listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, on the National Market of the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ National Market") or, if such
Security is not quoted on the NASDAQ National Market, the average of the closing
bid and asked prices for such Security in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such Security on each such
date shall not have been reported by NASDAQ, the average of the bid and asked
prices for such Security for such day as furnished by any New York Stock
Exchange member firm regularly making a market in such Security selected for
such purpose by the holders of a majority of the Common Stock issuable (for
purposes of clarity, "issuable" includes the shares of Common Stock of the
Company that are issuable upon the date hereof and are issued subsequent to the
date hereof) upon conversion of the Series B Preferred Stock, if no such
quotations are available, the fair market value of such Security furnished by
any New York Stock Exchange member firm selected from time to time by the
holders of a majority of the Common Stock issuable (for purposes of clarity,
"issuable" includes the shares of Common Stock of the Company that are issuable
upon the date hereof and are issued subsequent to the date hereof) upon
conversion of the Series B Preferred Stock.
"COMMON STOCK" means (i) the Common Stock, $.01 par value, of
the Company and (ii) any other class of capital stock of the Company hereafter
authorized that is not limited to a fixed sum or percentage of par or stated
value with respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding up of the Company.
"COMMON STOCK EQUIVALENTS" means all shares of Common Stock
outstanding, all shares of Common Stock issuable (without regard to any present
restrictions on such issuance) upon the conversion, exchange or exercise of all
securities of the Company that are convertible, exchangeable or exercisable for
Common Stock and all Common Stock appreciation rights, phantom Common Stock
rights and other rights to acquire, or to receive or be paid an
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amount based on the market price (less any exercise, conversion or purchase
price) of, the Common Stock.
"COMPANY" has the meaning given to such term in the caption on
the first page of this Agreement.
"COMPETITOR" means (i) any Person who is actively engaged in
the exploration, development, exploitation and production of natural gas and
crude oil and (ii) any Affiliate of a Person identified in clause (i) above (it
being agreed that an investment firm shall not be deemed to control a Person
described in clause (i) above merely as a result of owning a minority interest
in such Person if it does not otherwise control such Person).
"CONTROL" means, with respect to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"CONVERTIBLE SECURITIES" means any capital stock, evidence of
indebtedness or other securities or rights convertible into or exchangeable for
Common Stock, including the Series B Convertible Preferred Stock.
"CURRENT MARKET PRICE" per share of Common Stock on any date
shall mean the average of the daily Closing Prices of the Common Stock for the 5
consecutive Trading Dates before the date of determination.
"EQUITY INCENTIVE PLANS" means any stock option, issuance,
appreciation rights, restricted stock, phantom stock, stock purchase plan or
other equity incentive plan for the directors, officers, and employees of, and
consultants to, the Company and its Subsidiaries.
"EXCLUDED SECURITIES" has the meaning given to such term in
Section 4.2.
"EXISTING SHARES" means the shares owned by the Original
Founder Shareholders as of the Closing Date other than any shares issued to such
Original Founder Shareholders pursuant to the Purchase Agreement.
"FOUNDER SHAREHOLDERS" shall mean, collectively, (i) the
Original Founder Shareholders, (ii) any Transferee of the Securities held by an
Original Founder Shareholder who hereafter becomes a party to this Agreement as
a "Founder Shareholder" pursuant to a Joinder Agreement executed and delivered
pursuant to Section 3.1(b) and (iii) any Transferee of the Securities held by an
Original Founder Shareholder who became a party to the 1999 Shareholders'
Agreement as a "Founder Shareholder" pursuant to a Joinder Agreement executed
and delivered pursuant to Section 3.1(b) thereto.
"FULLY DILUTED COMMON STOCK" means, with respect to the Common
Stock at any time of determination, the number of shares of Common Stock that
would be issued and outstanding at such time, assuming full conversion, exercise
and exchange of all issued and outstanding Convertible Securities and Options
that shall be (or may become) exchangeable for, or exercisable or convertible
into, Common Stock, including the Series B Convertible Preferred
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Stock and the Warrants, except that the number of shares of Fully Diluted Common
Stock shall not include the number of shares of Common Stock issuable upon
exercise, conversion or exchange of Options or Convertible Securities that, at
the time of determination, are Out of the Money. For purposes of determining the
percentage of the Fully Diluted Common Stock, any Investor shall be deemed to
hold shares of Common Stock issuable upon any such exercise, conversion or
exchange of Convertible Securities and Options held by such Investor.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal
or other government, governmental department, commission, board, bureau, agency
or instrumentality, or any court, in each case whether of the United States of
America or any political subdivision thereof, or of any other country.
"INVESTORS" means, collectively, those persons listed on
Schedule I attached hereto under the heading "Investors," and every other Person
who hereafter becomes a party to this Agreement as an "Investor" pursuant to a
Joinder Agreement executed and delivered pursuant to Section 3.1(b).
"JOINDER AGREEMENT" has the meaning given to such term in
Section 3.1.
"MELLON" means Mellon Ventures, L.P.
"NONVOTING SECURITIES" has the meaning given to such term in
Section 4.1(d).
"OFFERED SECURITIES" has the meaning given to such term in
Section 4.1(a).
"OPTIONS" means any warrants, options or other rights to
subscribe for or to purchase (i) Common Stock or (ii) Convertible Securities.
"ORIGINAL FOUNDER SHAREHOLDERS" means ▇.▇. ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇, ▇▇. and
DAPHAM Partnership L.P. (and each, individually, an "ORIGINAL FOUNDER
SHAREHOLDER"). With respect to each Founder Shareholder, the Original Founder
Shareholder is the Original Founder Shareholder from whom such Founder
Shareholder acquired, whether directly or indirectly, its Shares.
"OUT OF THE MONEY" means, at any date of determination (a) in
the case of an Option, that the aggregate fair market value as of such date of
the shares of Common Stock issuable upon the exercise of such Option is less
than the aggregate exercise price payable upon such exercise and (b) in the case
of a Convertible Security, that the quotient resulting from dividing the fair
market value as of such date of such Convertible Security by the number of
shares issuable as of such date upon conversion or exchange of such Convertible
Security is greater than the fair market value of a share of Common Stock.
"PERMITTED TRANSFER" shall mean any Transfer by a Founder
Shareholder (i) to the spouse, parent, sibling or any lineal descendant of the
Original Founder Shareholder of such Founder Shareholder, (ii) to any trust for
the benefit of any person specified in clause (i) above or to any family
partnership or other estate planning vehicle, the interests of which are held by
such Founder Shareholder and/or the persons specified in clause (i) above, (iii)
by gift to a charitable
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organization qualified under Section 501(c) of the Internal Revenue Code, (iv)
to the estate of such Founder Shareholder, (v) of up to $3 million in aggregate
Current Market Price of shares of Common Stock to one or more other Founder
Shareholders, or (vi) to any Person in a Public Sale; provided, however, that in
each case (other than clauses (v) and (vi)) such Permitted Transfer is made in
accordance with Section 3.1(b).
"PERSON" shall be construed as broadly as possible and shall
include an individual or natural person, a partnership (including a limited
liability partnership), a corporation, an association, joint stock company, a
limited liability company, a trust, a joint venture, an unincorporated
organization and a Governmental Authority.
"PREEMPTIVE OFFER" has the meaning given to such term in
Section 4.1(a).
"PREEMPTIVE OFFER ACCEPTANCE NOTICE" has the meaning given to
such term in Section 4.1(b).
"PREEMPTIVE OFFER PERIOD" has the meaning given to such term
in Section 4.1(a).
"PROPORTIONATE PERCENTAGE" means, with respect to any
Shareholder, the fraction, expressed as a percentage, (i) the numerator of which
is the total number of shares of Common Stock, Warrant Shares and Underlying
Shares held by such Shareholder and (ii) the denominator of which is the total
number of shares of Fully Diluted Common Stock at the time of determination,
provided, however, that (i) with respect to Sponsor or its affiliates, no Common
Stock, Warrant Shares or Underlying Shares that are counted in the numerator of
Proportionate Percentage under this Agreement may be also counted in the
numerator of the definition of "Proportionate Percentage" under the 1999
Shareholders' Agreement and no Securities included in the numerator of
"Proportionate Percentage" under the 1999 Shareholders' Agreement may be
included in the numerator of the definition of Proportionate Percentage
hereunder and (ii) with respect to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the numerator of
Proportionate Percentage under this Agreement shall be the total number of
shares of Common Stock issued upon conversion of the Series B Preferred Stock
and exercise of the Warrants, Warrant Shares and Underlying Shares held by ▇▇.
▇▇▇▇▇▇▇.
"PUBLIC OFFERING" means a public offering of Common Stock
pursuant to a registration statement declared effective under the Securities
Act, except that a Public Offering shall not include an offering made in
connection with a business acquisition or an employee benefit plan.
"PUBLIC SALE" means any sale of Securities to the public
pursuant to an offering registered under the Securities Act or to the public
through a broker, dealer or market maker (pursuant to the provisions of Rule 144
or otherwise or pursuant to a tender offer made to all shareholders of the
Company pursuant to Regulation 14D (or successor regulations) under the
Securities Exchange Act of 1934).
"PURCHASE AGREEMENT" has the meaning given to such term in the
Preamble.
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"REFUSED SECURITIES" has the meaning given to such term
Section 4.1(c).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of the date hereof entered into simultaneously with the
execution and delivery of this Agreement between the Company and the Investors
named therein.
"REQUISITE INVESTORS" means those Investors who hold in the
aggregate in excess of 50% of the Common Stock issuable (for purposes of
clarity, "issuable" includes the shares of Common Stock of the Company that are
issuable upon the date hereof and are issued subsequent to the date hereof) upon
conversion of the Series B Preferred Stock and exercise of the Warrants.
"REQUISITE FOUNDER SHAREHOLDERS" means those Founder
Shareholders who hold in excess of 50% of the outstanding shares of Common Stock
held by all Founder Shareholders at the time in question.
"SALE OF THE COMPANY" means (i) the sale (in one or a series
of related transactions) of all or substantially all of the Company's assets to
a Person or a group of Persons acting in concert, (ii) the sale or transfer (in
one or a series of related transactions) of all or substantially all of the
outstanding capital stock of the Company, to one Person or a group of Persons
acting in concert, or (iii) the merger or consolidation of the Company with or
into another Person who is not an Affiliate of the Company, in each case in
clauses (ii) and (iii) above under circumstances in which the holders of a
majority in voting power of the outstanding capital stock of the Company,
immediately prior to such transaction, own less than a majority in voting power
of the outstanding capital stock of the Company, or the surviving or resulting
corporation or acquirer, as the case may be, immediately following such
transaction. A sale (or multiple related sales) of one or more subsidiaries of
the Company (whether by way of merger, consolidation, reorganization or sale of
all or substantially all assets or Securities) which constitutes all or
substantially all of the consolidated assets of the Company shall be deemed a
Sale of the Company.
"SALE NOTICE" has the meaning given to such term in Section
3.2(a).
"SECURITIES" means, with respect to any Person, such Person's
"securities" as defined in Section 2(1) of the Securities Act of 1933, as
amended, and includes such Person's capital stock or other equity interests or
any options, warrants or other securities that are directly or indirectly
convertible into, or exercisable or exchangeable for, such Person's capital
stock or other equity or equity-linked interests, including phantom stock and
stock appreciation rights.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any successor federal statute, and the rules and regulations of the
Securities and Exchange Commission thereunder, all as the same shall be in
effect from time to time.
"SECURITIES AND EXCHANGE COMMISSION" means the Securities and
Exchange Commission or any Governmental Authority succeeding to the functions
thereof.
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"SERIES B CONVERTIBLE PREFERRED STOCK" means the Series B
Convertible Participating Preferred Stock, par value $0.01 per share, of the
Company.
"SHAREHOLDERS" means the holders of Common Stock and the
holders of Common Stock Equivalents (including, without limitation, the Warrants
and Series B Convertible Preferred Stock), in each case, who are parties hereto,
and shall include any other Person who hereafter becomes a party to this
Agreement as a Shareholder pursuant to a Joinder Agreement executed and
delivered pursuant to Section 3.1 or 3.2(b).
"SHARES" means any shares or other units of Stock issued by
the Company and purchased or otherwise acquired by any Shareholder. As to any
particular Securities constituting Shares, such Securities will cease to be
Shares for all purposes of this Agreement when they have (a) been Transferred in
a Public Sale (except as to the Series B Preferred Stock as it relates to
Section 2.1) or (b) ceased to be outstanding.
"SPONSOR" means (i) Mellon or (ii) a Transferee of Mellon who
at the time in question holds more than 50% of the Common Stock issuable (for
purposes of clarity, "issuable" includes the shares of Common Stock of the
Company that are issuable upon the date hereof and are issued subsequent to the
date hereof) upon conversion of the Series B Preferred Stock.
"SPOUSAL CONSENT" has the meaning given to such term in
Section 7.13.
"STOCK" means the Series B Convertible Preferred Stock, the
Common Stock and the Warrant Shares and any and all other capital stock or
equity Securities (including derivative Securities therefor) of the Company,
excluding Options but including, to the extent applicable, the Stock received
upon exercise of the Options.
"SUBSIDIARY" means, with respect to any Person, any other
Person of which more than fifty percent (50%) of the shares of stock or other
interests entitled to vote in the election of directors or comparable Persons
performing similar functions (excluding shares or other interests entitled to
vote only upon the failure to pay dividends thereon or other contingencies) are
at the time owned or controlled, directly or indirectly through one or more
Subsidiaries, by such Person.
"TAG-ALONG NOTICE" has the meaning given to such term in
Section 3.2(b).
"TRADING DATE" with respect to any Security means (i) if such
Security is listed or admitted for trading on the New York Stock Exchange or
another national securities exchange, a day on which the New York Stock Exchange
or such other national securities exchange is open for trading, (ii) if such
Security is quoted on the NASDAQ National Market, or any similar system of
automated dissemination of quotations of securities prices, a day on which
trades may be made on such system, (iii) if not quoted as described in clause
(ii), days on which quotations are reported by the National Quotation Bureau
Incorporated or (iv) otherwise, any Business Day.
"TRANSFER" of Securities shall be construed broadly and shall
include any issuance, sale, assignment, transfer, participation, gift, bequest,
distribution, or other disposition
7
thereof (but not any pledge or hypothecation thereof, placement of a lien
thereon or grant of a security interest therein or other encumbrance thereon
until the execution and foreclosure with respect to the foregoing), in each case
whether voluntary or involuntary or by operation of law or otherwise.
"TRANSFEROR" means a Person Transferring Securities, and "TRANSFEREE" means a
Person acquiring Securities through a Transfer.
"TRANSFERRING SHAREHOLDER" has the meaning given such term in
Section 3.2(a).
"UNDERLYING SHARES" means the Common Stock and other
Securities issuable upon conversion of the Series B Convertible Preferred Stock.
"WARRANT AGREEMENT" means the Warrant Agreement dated as of
the date hereof entered into simultaneously with the execution and delivery of
this Agreement between the Company and the Investors named therein.
"WARRANTS" has the meaning given to such term in the Warrant
Agreement.
"WARRANT SHARES" has the meaning given to such term in the
Warrant Agreement.
1.2 RULES OF CONSTRUCTION.
The use in this Agreement of the term "including" means "including,
without limitation." The words "herein," "hereof," "hereunder" and other words
of similar import refer to this Agreement as a whole, including the schedules
and exhibits, as the same may from time to time be amended, modified,
supplemented or restated, and not to any particular section, subsection,
paragraph, subparagraph or clause contained in this Agreement. All references to
sections, schedules and exhibits mean the sections of this Agreement and the
schedules and exhibits attached to this Agreement, except where otherwise
stated. The title of and the section and paragraph headings in this Agreement
are for convenience of reference only and shall not govern or affect the
interpretation of any of the terms or provisions of this Agreement. The use
herein of the masculine, feminine or neuter forms shall also denote the other
forms, as in each case the context may require. Where specific language is used
to clarify by example a general statement contained herein, such specific
language shall not be deemed to modify, limit or restrict in any manner the
construction of the general statement to which it relates. The language used in
this Agreement has been chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any party.
ARTICLE II
SHAREHOLDER VOTE IN FAVOR OF A MERGER
2.1 SHAREHOLDER VOTE IN FAVOR OF A MERGER.
If the holders of at least 51% of the Common Stock then outstanding
approve a merger, Sale of the Company or sale of substantially all of the assets
of the Company (an "Approved Sale"), each holder of Series B Convertible
Preferred Stock will consent to, vote for and raise no
8
objections against the Approved Sale (including voting or consenting to the
Approved Sale to the extent otherwise required under Sections 2(i) through (iv)
of the Statement of Resolutions) as a holder of the Series B Convertible
Preferred Stock; provided, however, that (a) the holders of the Series B
Convertible Preferred Stock shall only be required to consent to, vote for and
raise no objections against the Approved Sale to the extent that the
consummation of such Approved Sale will constitute a Change of Control and the
Company complies with each of its obligations set forth in Section 9 of the
Statement of Resolution establishing the Series B Convertible Preferred Stock or
to the extent the Approved Sale is a reincorporation merger in which the only
changes to the rights and preferences of the Series B Convertible Preferred
Stock are those required to conform to the laws of the jurisdiction into which
the Company reincorporates; (b) this Section 2.1 shall not in any way limit the
rights and preferences of the holders of the Series B Convertible Preferred
Stock set forth in the Statement of Resolution; and (c) this Section 2.1 shall
not in any way limit a holder of Series B Convertible Preferred Stock with
respect to such holder's rights as a holder of Common Stock or other Securities
of the Company. Notwithstanding anything in this Agreement to the contrary, no
Investor may transfer any shares of Series B Convertible Preferred Stock unless
and until the transferee agrees with the Company to comply with this Section.
ARTICLE III
ISSUANCES AND TRANSFERS OF STOCK
3.1 JOINDER AGREEMENT; CERTAIN TRANSFERS.
(a) The provisions regarding Transfers of Stock contained in
this Article III shall apply to all shares of Stock now owned or hereafter
acquired by a Shareholder, including shares of Stock acquired by reason of
original issuance, dividend, distribution, exchange, conversion and acquisition
of outstanding shares of Stock from another Person, and such provisions shall
apply to any shares of Stock obtained by a Shareholder upon the exercise,
exchange or conversion of any option, warrant or other derivative Security.
(b) Except for transfers that constitute Public Sales, no
Shareholder shall Transfer any Stock to a Person (other than the Company or a
Subsidiary of the Company) not already a party to this Agreement as a
Shareholder unless and until such Person executes and delivers to the Company a
joinder agreement in substantially the form attached hereto as Exhibit A and
otherwise in form and substance reasonably acceptable to the Company and the
Requisite Investors (a "JOINDER AGREEMENT"), pursuant to which such Person will
thereupon become a party to, and be bound by and obligated to comply with the
terms and provisions of, this Agreement, as a Shareholder hereunder. Any Person
who executes a Joinder Agreement shall be designated an Investor if the
Transferor was an Investor and the Transferee was not a Founder Shareholder or
an Affiliate of a Founder Shareholder. No Person who is not a Shareholder who
acquires Stock in a Public Sale shall be permitted or required to execute a
Joinder Agreement. No Person who acquires less than 7 1/2% of the Fully Diluted
Common Stock pursuant to a Transfer shall be permitted or required to execute a
Joinder Agreement. Any Transferor shall notify the Company at least five days
prior to any Transfer that requires the execution of a Joinder Agreement.
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(c) The Company shall provide (and upon written request by any
Shareholder, authorize such Shareholder to provide) any readily available
financial and other information concerning the Company to any prospective
transferee of Stock owned by such Shareholder as such purchaser may reasonably
request; provided that, the provision of any such information shall be subject
to the confidentiality provisions set forth in Section 7.14 of the Purchase
Agreement and any such prospective transferee of Stock shall be deemed to have
agreed to be bound by and entitled to the benefits of Section 7.14 of the
Purchase Agreement and that such transferee is not a Competitor of the Company.
3.2 TAG-ALONG RIGHTS.
(a) If at any time any Founder Shareholder (the "TRANSFERRING
SHAREHOLDER") proposes to Transfer any shares of Common Stock (other than
Permitted Transfers), then at least twenty five (25) days prior to the expected
closing of such Transfer, such Transferring Shareholder shall deliver a written
notice (the "SALE NOTICE") to the Sponsor offering the Sponsor the option to
participate in such proposed Transfer. Such Sale Notice shall specify in
reasonable detail the identity of the prospective Transferee and, to the extent
known, the terms and conditions of the Transfer.
(b) Sponsor may, within 15 days of the receipt of a Sale
Notice, give written notice (each, a "TAG-ALONG NOTICE") to the Transferring
Shareholder stating that Sponsor wishes to participate in such proposed Transfer
and stating that such notice is binding and irrevocable and specifying the
amount of Common Stock Sponsor desires to include in such proposed Transfer.
(c) If Sponsor does not give the Transferring Shareholder a
timely Tag-Along Notice with respect to the Transfer proposed in the Sale
Notice, the Transferring Shareholder may thereafter transfer the shares
specified in the Sale Notice on substantially the same terms and conditions set
forth in the Sale Notice. If Sponsor gives the Transferring Shareholder a timely
Tag-Along Notice, then the Transferring Shareholder shall use all reasonable
efforts to cause the prospective Transferee(s) to agree to acquire all shares
identified in all Tag-Along Notices that are timely given to the Transferring
Shareholder, upon the same terms and conditions as applicable to the
Transferring Shareholder's shares. If such prospective Transferee (s) are
unwilling or unable to acquire all shares proposed to be included in such sale
upon such terms, then the Transferring Shareholder may elect either to cancel
such proposed Transfer or to allocate the maximum number of shares that each
prospective Transferee is willing to purchase among the Transferring Shareholder
or Transferring Shareholders, as the case may be, and the Sponsor in proportion
to such Shareholders' (including the Transferring Shareholder's or Transferring
Shareholders', as the case may be) Proportionate Percentages.
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ARTICLE IV
RIGHTS TO SUBSCRIBE FOR SECURITIES
4.1 GENERAL.
(a) Except in the case of Excluded Securities (as hereinafter
defined), the Company shall not issue, sell or exchange, agree to issue, sell or
exchange, or reserve or set aside for issuance, sale or exchange (i) any equity
Security of the Company, (ii) any debt Security of the Company which by its
terms is convertible into or exchangeable for any equity Security of the
Company, (iii) any option, warrant or other right to subscribe for, purchase or
otherwise acquire any equity Security or any debt Security referred to in clause
(i) or (ii) or (iv) any other Common Stock Equivalent, unless in each case the
Company shall have first offered (the "PREEMPTIVE OFFER") to sell such
Securities to the Investors (the "OFFERED SECURITIES") by delivery to such
Investors of written notice of such offer stating that such Company proposes to
sell such Offered Securities, and to the extent then known, the number or amount
of the Offered Securities proposed to be sold, the proposed purchase price
therefor and any other terms and conditions of such offer (such notice shall be
deemed to be satisfactory if such terms and conditions are set out in the same
general level of detail as the term sheet used in connection with the offering
contemplated by the Purchase Agreement). Without limiting the generality of any
other provisions hereof, the final terms and conditions of the Offered
Securities (and the drafts of any purchase or ancillary documents) need not be
set prior to the mailing of the Preemptive Offer. The Preemptive Offer shall by
its terms remain open and irrevocable for a period of 10 Business Days from the
date it is delivered by the Company (the "PREEMPTIVE OFFER PERIOD").
(b) Each Investor shall have the option, exercisable at any
time during the Preemptive Offer Period by delivering a binding and irrevocable
written notice to the Company (a "PREEMPTIVE OFFER ACCEPTANCE NOTICE"), to
subscribe for the number or amount of such Offered Securities up to its
Proportionate Percentage of the total number or amount of Offered Securities
proposed to be issued.
(c) If Preemptive Offer Acceptance Notices are not given by
the Investors for all the Offered Securities, the Company shall have 90 days
from the expiration of the Preemptive Offer Period to sell all or any part of
such Offered Securities as to which Preemptive Offer Acceptances Notices have
not been given by the Investors (the "REFUSED SECURITIES") to any other Persons,
but only upon terms and conditions in all material respects, including unit
price and interest rates, which are no more favorable, in the aggregate, to such
other Persons or less favorable, in the aggregate, to the Company than those set
forth in the Preemptive Offer. Upon the closing, which shall include full
payment to the Company, of the sale to such other Persons of all the Refused
Securities, the Investors shall purchase from the Company, and the Company shall
sell to the Investors, the Offered Securities with respect to which Preemptive
Offer Acceptance Notices were delivered by the Investors, at the terms specified
in the Preemptive Offer. The Investors purchasing the Offered Securities under
this Section must execute all documents and agreements no later than the time of
the Closing to the extent reasonably requested by the Company. In each case, any
Offered Securities not purchased by the Investors
11
or any other Persons in accordance with this Section 4.1 may not be sold or
otherwise disposed of until they are again offered to the Investors under the
procedures specified in this Section 4.1.
4.2 EXCLUDED SECURITIES.
The rights of the Investors under Section 4.1 shall not apply to the
following Securities (the "EXCLUDED SECURITIES"):
(a) Securities issued or granted to eligible officers,
employees or directors of, or consultants to, the Company and its Subsidiaries
pursuant to an Equity Incentive Plan;
(b) any Securities issued by the Company in any Public
Offering;
(c) any Securities issued by the Company as consideration in a
merger, business combination or acquisition of property or assets;
(d) Securities issued upon the exercise or conversion of
outstanding Common Stock Equivalents and other derivative Securities and Common
Stock Equivalents and other derivative Securities issued in compliance with (or
not otherwise in violation of) this Article IV;
(e) the Warrant Shares;
(f) the Underlying Shares;
(g) Securities issued in a distribution from the Company,
stock split, reverse stock split, subdivision, stock dividend, reclassification,
combination or capital reorganization; and
(h) Shares of Series B Convertible Preferred Stock issued as
dividends on shares of Series B Convertible Preferred Stock.
ARTICLE V
AMENDMENT AND WAIVER
5.1 AMENDMENT.
Except as expressly set forth herein, the provisions of this Agreement
may only be amended or waived with the prior written consent of (i) the Company,
(ii) the Requisite Founder Shareholders and (iii) the Requisite Investors;
provided, however, that (A) any such amendment, modification, or waiver that
would adversely affect in any material respect the rights hereunder of any
Investor or any Founder Shareholder, in their capacities as such, without
similarly affecting the rights hereunder of all the Investors or Founder
Shareholders, as the case may be, may not be made without the prior written
consent of such adversely affected Investor or Founder Shareholder, Schedule I
to this Agreement shall be deemed to be automatically amended from time to time
to reflect Transfers of Stock, and the Company will, from time to time,
distribute to the Shareholders a revised Schedule I to reflect any such changes.
12
5.2 WAIVER.
No course of dealing between the Company, its Subsidiaries and the
Shareholders (or any of them) or any delay in exercising any rights hereunder
will operate as a waiver of any rights of any party to this Agreement. The
failure of any party to enforce any of the provisions of this Agreement will in
no way be construed as a waiver of such provisions and will not affect the right
of such party thereafter to enforce each and every provision of this Agreement
in accordance with its terms.
ARTICLE VI
DURATION; TERMINATION
The provisions of Article III and Article IV of this Agreement shall
terminate upon the first to occur of (A) notice of termination by the Requisite
Investors , (B) a Sale of the Company which has been consented to by the
Requisite Investors and the consideration received by the Shareholders in
connection with such sale consists solely of cash, (C) Sponsor does not own more
than 50% of the Common Stock issuable (for purposes of clarity, "issuable"
includes the shares of Common Stock of the Company that are issuable upon the
date hereof and are issued subsequent to the date hereof) upon conversion of the
Series B Preferred Stock acquired pursuant to the Purchase Agreement, and (D)
Sponsor no longer owns any Series B Convertible Preferred Stock. Anything
contained herein to the contrary notwithstanding, as to any particular
Shareholder, this Agreement shall no longer be binding or of further force or
effect as to such Shareholder, except as otherwise expressly provided herein, as
of the date such Shareholder has Transferred all of such Shareholder's interest
in the Company's Securities in accordance with the terms hereof and the
Transferees of such Securities have, if required by Section 3.2(b) hereof,
executed Joinder Agreements but such Shareholder shall remain responsible for
all actions or omissions during such time that the Agreement was applicable to
such Shareholder.
ARTICLE VII
MISCELLANEOUS
7.1 SEVERABILITY.
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under Applicable Law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any Applicable Law in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, and such invalid, void or otherwise unenforceable provisions shall
be null and void. It is the intent of the parties, however, that any invalid,
void or otherwise unenforceable provisions be automatically replaced by other
provisions which are as similar as possible in terms to such invalid, void or
otherwise unenforceable provisions but are valid and enforceable to the fullest
extent permitted by Applicable Law.
13
7.2 ENTIRE AGREEMENT.
This Agreement and the agreements and documents referred to herein
contain the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof and supersede and preempt any and all prior
and contemporaneous understandings, agreements, arrangements, or representations
by or among the parties, written or oral, which may related to the subject
matter hereof or thereof in any way. Other than this Agreement, the Statement of
Resolutions and the other agreements referred to herein and to be executed and
delivered in connection herewith, there are no other agreements to which the
parties hereto are bound continuing in effect relating to pre-emptive or similar
rights or voting of Series B Convertible Preferred Stock.
7.3 CERTAIN SHAREHOLDERS.
Any Shareholder that is a party to this Agreement and is an entity that
was formed for the sole purpose of acquiring Stock or that has no substantial
assets other than Stock or interests in Stock shall agree that (a) shares of its
common stock or other instruments reflecting equity interests in such entity
(and the shares of common stock or other equity interests in any similar
entities controlling such entity) will note the restrictions contained in this
Agreement on the transfer of Stock as if such common stock or other equity
interests were Stock and (b) no shares of such common stock or other equity
interests may be transferred to any Person other than in accordance with the
terms and provisions of this Agreement as if such common stock or other equity
interests were Stock.
7.4 SUCCESSORS AND ASSIGNS.
Except as otherwise provided herein, this Agreement will bind and inure
to the benefit of and be enforceable by the Company and its successors and
assigns and the Shareholders and any subsequent permitted holders of Shares and
the respective successors and permitted assigns of each of them, so long as they
hold Shares. None of the provisions hereof shall create, or be construed or
deemed to create, any right to employment in favor of any Person by the Company
or any of its Subsidiaries. This Agreement is not intended to create any third
party beneficiaries.
7.5 REMEDIES.
(a) Each Shareholder shall have all rights and remedies
reserved for such Shareholder pursuant to this Agreement and all rights and
remedies which such holder has been granted at any time under any other
agreement or contract and all of the rights which such holder has under any law
or equity. Any Person having any rights under any provision of this Agreement
will be entitled to enforce such rights specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law or equity.
(b) The parties hereto agree that if any parties seek to
resolve any dispute arising under this Agreement pursuant to a legal proceeding,
the prevailing parties to such proceeding
14
shall be entitled to receive reasonable fees and expenses (including reasonable
attorneys' fees and expenses) incurred in connection with such proceedings.
(c) It is acknowledged that it will be impossible to measure
in money the damages that would be suffered by any party hereto if any Person
also party hereto fails to comply with any of the obligations imposed on it upon
them in this Agreement or in the Charter or By-laws and that in the event of any
such failure, the aggrieved party will be irreparably damaged and will not have
an adequate remedy at law. Any such aggrieved party shall, therefore, be
entitled to injunctive relief, including specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any of the
provisions of this Agreement, none of the parties hereto shall raise the defense
that there is an adequate remedy at law.
7.6 NOTICES.
All notices, demands and requests of any kind to be delivered to any
party hereto in connection with this Agreement shall be in writing (i) delivered
personally, (ii) sent by nationally-recognized overnight courier, (iii) sent by
first class, registered or certified mail, return receipt requested or (iv) sent
by facsimile, in each case to such party at its address as follows:
(a) if to the Company, to:
Carrizo Oil & Gas, Inc.
▇▇▇▇▇ ▇▇. ▇▇▇▇'▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
3000 One Shell Plaza
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to a Shareholder, to such Shareholder's address as set
forth on Schedule I hereto.
Any notice, demand or request so delivered shall constitute valid notice under
this Agreement and shall be deemed to have been received (i) on the day of
actual delivery in the case of personal delivery, if delivered on a Business Day
(otherwise on the next Business Day), (ii) on the next Business Day after the
date when sent in the case of delivery by nationally-recognized overnight
15
courier, (iii) on the fifth Business Day after the date of deposit in the U.S.
mail in the case of mailing or (iv) upon receipt in the case of a facsimile
transmission. Any party hereto may from time to time by notice in writing served
upon the other as aforesaid designate a different mailing address or a different
Person to which all such notices, demands or requests thereafter are to be
addressed.
7.7 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER IN THE STATE OF NEW
YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK EXCEPT TO THE EXTENT OF
INTERNAL CORPORATE MATTERS, WHICH SHALL BE GOVERNED BY THE PROVISIONS OF THE
APPLICABLE LAW OF THE STATE OF
TEXAS.
(b) THE PARTIES TO THIS AGREEMENT AGREE THAT JURISDICTION AND
VENUE IN ANY ACTION BROUGHT BY ANY PARTY HERETO PURSUANT TO THIS AGREEMENT SHALL
LIE IN ANY FEDERAL OR STATE COURT LOCATED IN THE STATE OF NEW YORK OR THE STATE
OF
TEXAS. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE PARTIES HERETO
IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS FOR
THEMSELVES AND IN RESPECT OF THEIR PROPERTY WITH RESPECT TO SUCH ACTION. THE
PARTIES HERETO IRREVOCABLY AGREE THAT VENUE WOULD BE PROPER IN SUCH COURT, AND
HEREBY WAIVE ANY OBJECTION THAT SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM
FOR THE RESOLUTION OF SUCH ACTION.
(c) THE COMPANY HEREBY AGREES THAT SERVICE UPON THEM BY
REGISTERED OR CERTIFIED MAIL (RETURN RECEIPT REQUESTED) SHALL CONSTITUTE
SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE INVESTORS TO BRING
PROCEEDINGS AGAINST THE COMPANY OR THE SHAREHOLDERS IN THE COURTS OF ANY OTHER
JURISDICTION.
(d) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY, THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO
16
ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT, THE TRANSACTION
DOCUMENTS OR ANY DOCUMENTS RELATED HERETO.
7.8 FURTHER ASSURANCES.
Each party hereto shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry out the provisions of this
Agreement and the consummation of the transactions contemplated hereby.
7.9 REPRESENTATION AND WARRANTIES OF THE SHAREHOLDERS.
Each Shareholder (as to himself or itself only) represents and warrants
to the Company and the other Shareholders that, as of the time such Shareholder
becomes a party to this Agreement:
(a) this Agreement (or the separate joinder agreement executed
by such Shareholder) has been duly and validly executed and delivered by such
Shareholder and this Agreement constitutes a legal and binding obligation of
such Shareholder, enforceable against such Shareholder in accordance with its
terms; and
(b) the execution, delivery and performance by such
Shareholder of this Agreement and the consummation by such Shareholder of the
transactions contemplated hereby will not, with or without the giving of notice
or lapse of time, or both (A) violate any Applicable Law, or (B) conflict with,
or result in a breach or default under, any term or condition of any agreement
or other instrument to which such Shareholder is a party or by which such
Shareholder is bound, except for such violations, conflicts, breaches or
defaults that would not, in the aggregate, materially affect the Shareholder's
ability to perform its obligations hereunder.
(c) Such Shareholder owns beneficially and of record the
number of shares of Common Stock and Warrants as set forth on Schedule I.
7.10 LEGENDS; STOP TRANSFER INSTRUCTIONS.
(a) Each certificate evidencing Shares (including any Shares
outstanding prior to the date hereof) and each certificate issued in exchange
for or upon the Transfer of any Shares (if such shares remain Shares as defined
herein after such Transfer) shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
SHAREHOLDERs AGREEMENT DATED AS OF FEBRUARY 20, 2002, AMONG THE ISSUER OF SUCH
SECURITIES (THE "COMPANY") AND CERTAIN OF THE COMPANY'S SHAREholders. THE TERMS
OF SUCH SHAREholders AGREEMENT INCLUDE, AMONG OTHER THINGS, VOTING AGREEMENTS
AND RESTRICTIONS ON TRANSFERS. A COPY OF SUCH SHAREholders AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
REQUEST."
17
The legend set forth above shall be removed from the certificates
evidencing any shares which cease to be Shares in accordance with the terms of
this Agreement.
(b) The Company agrees to give effect to the transfer
restrictions imposed by this Agreement by placing an "issuer hold" on the Shares
owned by the Original Founder Shareholders and it will not release such issuer
hold except in respect of a transfer in compliance with this Agreement. Each
Shareholder consents to the Company making a notation on its records and giving
instructions to any transfer agent of the Existing Shares in order to implement
the restrictions on transfer established in this Agreement. The Company agrees
to keep a copy of this Agreement (as it may from time to time be amended) at its
place of business and to make this Agreement subject to the same right of
examination by shareholders of the Company, in person or by agent, attorney or
accountant, as are the books and records of the Company. If any Original Founder
Shareholder Transfers any Existing Shares (other than in a Permitted Transfer)
such Existing Shares will be legended in accordance with Section 7.10(a) and
this Section 7.10(b) shall no longer apply to such transferred Existing Shares.
7.11 CONFLICTING AGREEMENTS.
No Shareholder shall enter into any agreements or arrangements of any
kind with any Person with respect to any Securities on terms inconsistent with
the provisions of this Agreement (whether or not such agreements or arrangements
are with other Shareholders or with Persons that are not parties to this
Agreement), including agreements or arrangements with respect to the acquisition
or disposition of Securities of the Company in a manner which is inconsistent
with this Agreement.
7.12 COUNTERPARTS; VALIDITY.
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement. The failure of
any Shareholder to execute this Agreement does not make it invalid as against
any other Shareholder.
7.13 CONSENT OF SPOUSES.
If requested by the Company or Requisite Investors, each Shareholder
who is an individual shall cause his or her spouse, as applicable to execute and
deliver a separate consent and agreement substantially in the form attached
hereto as Exhibit B and otherwise in form and substance reasonably acceptable to
the Company and the Requisite Investors (a "SPOUSAL CONSENT"). The signature of
a spouse on a Spousal Consent shall not be construed as making such spouse a
shareholder of the Company or a party to this Agreement except as may otherwise
be set forth in such consent. Each Shareholder who is an individual will certify
his or her marital status to the Company at the Company's request. The Company
or Requisite Investors will request Spousal Consents as contemplated by this
Section 8.13 whenever such action may be advantageous in enforcing (or assuring
the enforceability of in the future) the terms of this Agreement.
18
7.14 FIDUCIARY DUTIES.
Without limiting the generality of any other provision hereof, no
Original Founder Shareholder, while serving as a director of the Company, shall
be restricted from taking or omitting to take any action as a director to the
extent such action or omission is required to satisfy any fiduciary duty imposed
upon him as a director by applicable law in respect of his relationship to the
Company and its shareholders.
7.15 OTHER COVENANT.
The Company shall comply with, and each Investor for so long as such
Investor owns at least 10% of the Common Stock issuable (for purposes of
clarity, "issuable" includes the shares of Common Stock of the Company that are
issuable upon the date hereof and are issued subsequent to the date hereof) upon
conversion of the Series B Preferred Stock acquired pursuant to the Purchase
Agreement shall be entitled to the benefit of, the provisions of Sections 7.4
(a) and (b) and 8.6 of the Securities Purchase Agreement dated December 15,
1999, by and between the investors named therein.
* * * * *
19
IN WITNESS WHEREOF, the undersigned have duly executed this
Shareholders Agreement as of the date first written above.
COMPANY:
CARRIZO OIL & GAS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer and
Vice President
INVESTORS:
MELLON VENTURES, L.P.
By: MVMA, L.P., its general partner
By: MVMA, Inc., its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Associate
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
20
ORIGINAL FOUNDER SHAREHOLDERS:
/s/ ▇. ▇. ▇▇▇▇▇▇▇ ▇▇
-------------------------------------
▇. ▇. ▇▇▇▇▇▇▇ ▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
DAPHAM PARTNERSHIP, L.P.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: General Partner
21
SCHEDULE I
SHAREHOLDERS
AS OF 12/31/01 SERIES B
SHARES OF 1999 WARRANT CONVERTIBLE 2002 WARRANT
NAME AND ADDRESS COMMON STOCK SHARES PREFERRED SHARES SHARES
INVESTORS
Mellon Ventures, L.P. 363,636 276,019 40,000 168,421
1114 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Dechert
4000 ▇▇▇▇ Atlantic Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,725,228* 92,006 20,000 84,211
▇▇▇▇▇ ▇▇. ▇▇▇▇'▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
* Excludes shares for which shareholder disclaims beneficial ownership.
AS OF 12/31/01 SERIES B
SHARES OF 1999 WARRANT CONVERTIBLE 2002 WARRANT
ORIGINAL FOUNDER SHAREHOLDERS COMMON STOCK SHARES PREFERRED SHARES SHARES
----------------------------- --------------- ------------ ---------------- ------------
▇. ▇. ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇. ▇▇▇▇'▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 715,083
------ ------ ------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇. ▇▇▇▇'▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 1,092,221
------ ------ ------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇. ▇▇▇▇'▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 1,725,228* 92,006 20,000 84,211
▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 778,208* 92,006
------ ------
▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇▇. ▇▇▇▇'▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 1,550,468 92,006
------ ------
DAPHAM Partnership L.P.
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 395,960
------ ------ ------
* Excludes shares for which shareholder disclaims beneficial ownership.
EXHIBIT A
JOINDER AGREEMENT
The undersigned is executing and delivering this Joinder
Agreement pursuant to the Shareholders Agreement dated on or about February 20,
2002 (the "Shareholders Agreement"), among Carrizo Oil & Gas, Inc., a
Texas
corporation (the "Company"), and the Shareholders named therein.
By executing and delivering this Joinder Agreement to the
Company, the undersigned hereby agrees to become a party to, to be bound by, and
to comply with the provisions of [(i)] the Shareholders Agreements [and (ii) the
Registration Rights Agreement dated on or about February 20, 2002, among the
Company and the Investors named therein, in each case] in the same manner as if
the undersigned were an original signatory to [each of] such agreement[s]. In
connection therewith, effective as of the date hereof the undersigned hereby
makes the representations and warranties contained in Section 7.9 of the
Shareholders Agreement.
The undersigned agrees that he shall be a [Founder
Shareholder][Investor], as such term is defined in the Shareholders Agreement.
Accordingly, the undersigned has executed and delivered this
Joinder Agreement as of the __ day of ____________, 20__.
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Signature of [Investor][Founder Shareholder]
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Print Name of [Investor][Founder Shareholder]
[Bracketed provisions applicable to Investors only.]
EXHIBIT B
CONSENT AND AGREEMENT OF SPOUSE
I, ____________________________________________, am the spouse
of ________________________________________, one of the shareholders in Carrizo
Oil & Gas, Inc., a
Texas corporation (the "Company"). I understand that my
spouse is a party to that certain Shareholders Agreement dated on or about
February 20, 2002 (as the same may hereafter be amended, the "Agreement"), among
the Company and certain of its shareholders, and that I have reviewed the
Agreement.
The Agreement contains certain provisions regarding my
acquiring or retaining any equity securities, or rights to received equity
securities (the "Securities") issued by the Company. I agree that I may not
acquire any Securities (whether by gift, purchase, will, intestate succession,
operation of law or decree, order or injunction of any court, division of
community or marital property, or otherwise), except in compliance with the
terms of the Agreement. I acknowledge and understand that if I ever propose to
acquire any Securities in compliance with the Agreement, I must first agree to
become a party to the Shareholders Agreement.
Executed this ____ day of ___________, 20__.
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Signature
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Print Name of Consenting Spouse