EX-99.3 6 h94510ex99-3.txt SHAREHOLDERS' AGREEMENT 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 2 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 3 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 S.P. Johnson IV, Frank A. Wojtek, Steven A. Webster, Douglas A. P. Hamilton, Paul B. Loyd, Jr. 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 4 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 Steven A. Webster, 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 Mr. Webster. "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. 5 "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. 6 "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. 9 (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. 10 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. 14701 St. Mary's Lane, Suite 800 Houston, Texas 77079 Attention: Telephone No.: (281) 496-1352 Telecopier No.: (281) 496-1251 with a copy to: Baker Botts L.L.P. 3000 One Shell Plaza 910 Louisiana Houston, Texas 77002-4915 Attention: Gene Oshman, Esq. Telephone No.: (713) 229-1178 Telecopier No.: (713) 229-1522 (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/ FRANK A. WOJTEK ----------------------------------- Name: Frank A. Wojtek 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/ MARC A. COLE -------------------------------- Name: Marc A. Cole Title: Associate /s/ STEVEN A. WEBSTER ------------------------------- Steven A. Webster 20 ORIGINAL FOUNDER SHAREHOLDERS: /s/ S. P. JOHNSON IV ------------------------------------- S. P. Johnson IV /s/ FRANK A. WOJTEK ------------------------------------- Frank A. Wojtek /s/ STEVEN A. WEBSTER ------------------------------------- Steven A. Webster /s/ DOUGLAS A.P. HAMILTON ------------------------------------- Douglas A.P. Hamilton /s/ PAUL B. LOYD, JR. ------------------------------------- Paul B. Loyd, Jr. DAPHAM PARTNERSHIP, L.P. By: /s/ VERONICA A. LAVOUN -------------------------------------- Name: Veronica A. LaVoun 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 Americas 31st Floor New York, New York 10036 Attention: Marc A. Cole Telephone No.: (212) 389-2700 Telecopier No.: (212) 389-2755 with a copy to: Dechert 4000 Bell Atlantic Tower 1717 Arch Street Philadelphia, PA 19103-2793 Attention: David S. Denious, Esq. Telephone: (215) 994-4000 Telecopier: (215) 994-2222 Steven A. Webster 1,725,228* 92,006 20,000 84,211 14701 St. Mary's Lane Suite 800 Houston, Texas 77079
* 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 ----------------------------- --------------- ------------ ---------------- ------------ S. P. Johnson IV 14701 St. Mary's Lane, Suite 148 Houston, TX 77079 715,083 ------ ------ ------ Frank A. Wojtek 14701 St. Mary's Lane, Suite 148 Houston, TX 77079 1,092,221 ------ ------ ------ Steven A. Webster 14701 St. Mary's Lane, Suite 148 Houston, TX 77079 1,725,228* 92,006 20,000 84,211 Douglas A. P. Hamilton 1114 Avenue of the Americas, 31st Floor New York, New York 10036 778,208* 92,006 ------ ------ Paul B. Loyd, Jr. 14701 St. Mary's Lane, Suite 148 Houston, TX 77079 1,550,468 92,006 ------ ------ DAPHAM Partnership L.P. 1114 Avenue of the Americas, 31st Floor New York, New York 10036 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__. ----------------------------------------------------- Signature of [Investor][Founder Shareholder] ----------------------------------------------------- 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__. ----------------------------------------------------- Signature ----------------------------------------------------- Print Name of Consenting Spouse