Document:

exv10w8

Exhibit 10.8

PLEXUS CORP.

VARIABLE INCENTIVE COMPENSATION PLAN

(as amended through September 29, 2010)

PLEXUS LEADERSHIP TEAM

PLAN OBJECTIVES

The primary objectives of the Variable Incentive Compensation Plan (Plan) are to reward results
delivered by plan participants that enhance shareholder value and to assist Plexus Corp. (Plexus)
to attract, retain and motivate highly qualified and talented executives. The Plan provides annual
variable incentive compensation opportunities to participants for the achievement of specified
financial performance and other significant results that contribute to the overall success of
Plexus. Increasing revenues, improving financial returns on capital employed, and achieving
specific personal objectives are the three performance elements of this Plan.

PLAN YEAR

The Plan Year is effective for each Plexus fiscal year, unless and until terminated or modified.

ELIGIBILITY FOR PLAN PARTICIPATION

Participation in this Plan is limited to the members of the Plexus Leadership Team.

INCENTIVE PLAN COMPENSATION

Plan awards are to be calculated based upon the Plan Year base salary (e.g., salary excluding
bonuses, paid commissions, reimbursed relocation expenses, or any other special pay, but including
amounts deferred) of each participant adjusted for pro-rations as applicable (See Award Payment
Timing and Eligibility, below). Incentive awards are calculated for each position (job) a
participant holds through the plan year and are pro-rated accordingly based on calendar weeks in
each position (FY 2010 = 52 weeks).

INCENTIVE PLAN PERFORMANCE MEASURES

The incentive performance measures, each of which stands independently of the others with regard to
award opportunities, are:

	 	•	 	Revenues: Total Fiscal Year Net Sales of Plexus Corp.
	 
	 	•	 	Return on Average Capital Employed (ROCE): Annual
Operating Income for the Fiscal Year divided by Average Capital Employed. Where,

	 	•	 	Operating Income: As reported in the company’s audited income
statement for the Fiscal Year adjusted, if necessary, to eliminate stock-based
employee compensation expense and non-recurring or unusual charges.
	 
	 	•	 	Average Capital Employed: The 5 point average of the prior
Fiscal Year end and the quarterly current Fiscal Year Capital Employed balances.

	 	•	 	Capital Employed: Total Assets (minus Cash
and Short-Term Investments) less non-interest bearing Current and
Non-current Liabilities.

	 	•	 	Objectives: Individual participant objectives that relate to measurable personal or
site/location/team group goals for the plan year; typically the number of goals should be
limited to 3 to 5, which have been developed with, reviewed by and approved by the
participant’s supervisor.

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INCENTIVE PLAN PERFORMANCE AND REWARD OPPORTUNITIES

Incentive compensation is paid based on the following achievement levels:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Component	 	Threshold	 	Payout	 	50% Opportunity	 	Payout	 	Full Opportunity	 	Payout
	Revenue
	 	$	*	 	 	 	0	%	 	$	*	 	 	 	40	%	 	$	*	 	 	 	*	%
	ROCE
	 	 	*	%	 	 	0	%	 	 	* 	%	 	 	40	%	 	 	* 	%	 	 	*	%
	Personal Objectives
	 	 	 	 	 	 	0	%	 	 	 	 	 	 	20	%	 	 	 	 	 	 	*	%
	Total Incentive =
Revenues + ROCE + Objectives
	 	 	 	 	 	 	0	%	 	 	 	 	 	 	100	%	 	 	 	 	 	 	200	%

 

			
	[*	 	Specific threshold, 50% opportunity and full opportunity amounts, and percentages
allocated to each component, are the same for each participant and determined with the
approval of the Compensation and Leadership Development Committee; that information shall
be communicated to eligible participants. All year references herein will be deemed to
refer to the appropriate Fiscal Year and numbers in this matrix will be re-set for such
years.]

	 	•	 	Threshold: Below the Revenue and/or ROCE Thresholds, only personal objectives awards
can be earned. Revenue and ROCE measures begin producing incentive awards for above
Threshold achievement.
	 
	 	•	 	Full Opportunity: Full Opportunity for Revenue and ROCE measures relate to the relevant
Fiscal Year financial plan. Personal objectives relate to individual participant
performance and may reflect personal, location, site, functional group, or other measurable
objectives. Awards will be pro-rated on a straight-line basis for performance that falls
between Threshold and Full Opportunity achievement.

Note: No award will be paid for any component if the company incurs a net loss for the fiscal year
(excluding non-recurring or unusual charges).

AWARD PAYMENT TIMING AND ELIGIBILITY

Eligible
participants will receive earned incentive awards on or around December 10 of the
subsequent fiscal year (Payment Date). Adjustments occur under the following circumstances:

	 	•	 	Participant Transfer: Awards will be pro-rated for participants who transfer between
company organizations (sites, locations, functional groups, SBU’s, etc.) based upon time
spent in each job.
	 
	 	•	 	Participant Status Change: Participants changing status (to/from eligible/ineligible
position) are to be pro-rated by eligible weeks on the company payroll divided by the
number of weeks of the plan year (FY 2010 = 52 weeks).
	 
	 	•	 	Employment/Re-employment: New or rehired employees who enter the Plan after the start of
the Plan Year will receive a pro-rated award based on the time actually in the Plan.
	 
	 	•	 	Employment Termination: Plan participants who leave the employ of Plexus (whether
voluntarily or involuntarily) prior to the end of the current Fiscal Year, except in the
case of retirement, disability, death or approval by the CEO, forfeit all rights to
incentive awards accrued during the Plan Year. Plan participants will be ineligible for an
award under this Plan if their employment with Plexus is terminated for cause at any time
prior to the Payment Date. Plan participants active as of the last day of the Fiscal Year
will receive an award based on time actually spent in the Plan.

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	 	•	 	Retirement, Disability, or Death: “Retirement” means eligible for retirement under
Plexus Corp.’s retirement guidelines. Disability means eligible for disability benefits
and unable to continue in the
employ of the company due to such disability. In the event of death, any payable award will
be paid to the participant’s beneficiary(ies), or to the estate in the event that no
beneficiary is named, following the end of the Plan Year. Awards for participants who leave
due to retirement, disability or death will be pro-rated by eligible weeks on the company
payroll divided by the number of weeks of the plan year (FY 2010 = 52 weeks).
	 
	 	•	 	Non-performing Employees: If at any time during the plan year an individual’s
performance is not satisfactory and the participant is on a formal written performance
improvement plan, such participant may be removed from this Plan, and either no award or a
reduced award will be paid to the individual. Approval of such action will be made by the
CEO subject to the final approval of the Compensation and Leadership Development Committee
of the Board.
	 
	 	•	 	Leaves of Absence: Awards for participants who are on an unpaid Leave of Absence will
be pro-rated for the ROCE and Revenue components based upon eligible calendar weeks on the
company payroll divided by the number of weeks of the plan year (FY 2010 = 52 weeks).

COMMUNICATION

Each participant will receive a copy of this plan document and a Participant Award Opportunity
Summary.

ADMINISTRATION

Overall policy direction shall be provided by the Board of Directors. Plan administration shall be
the responsibility of the CEO with support and guidance from the Compensation and Leadership
Development Committee of the Board of Directors.

EXCEPTIONS AND REVISIONS

It is conceivable that there may be particular situations which are not properly accommodated by
the regular criteria and boundaries of the prevailing incentive program, (e.g. the effect that an
acquisition, a secondary stock offering, or the like may have on Plexus’ financial performance).
Should such situation(s) occur, the CEO will recommend appropriate adjustments to the Compensation
and Leadership Development Committee of the Board of Directors. If adjustments are made, the
reason for such adjustments will be set forth in the Committee’s Minutes and communicated to Plan
participants. Nothing in this plan document or associated communications in any way promises or
guarantees the compensation or employment of any participant with Plexus Corp. or any successor or
related company(ies).

Page 3 of 3exv10w1

Exhibit 10.1

Execution Version

AMENDED AND RESTATED PARTICIPATION AGREEMENT

     THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT, among Carrizo (Marcellus) WV LLC, a
Delaware limited liability company (“Carrizo”), Carrizo Oil & Gas, Inc., a Texas corporation
(“COGI” and, together with Carrizo, the “Carrizo Parties”), Avista Capital Partners II, L.P., a
Delaware limited partnership (“Avista”), and ACP II Marcellus LLC, a Delaware limited liability
company (“Investor LLC” and, together with Avista, the “Avista Parties”), is entered into this 16th
day of November, 2010 (the “Execution Date”) and effective as of the 1st day of October, 2010 (the
“Effective Date”). In this Agreement, Carrizo, COGI, Avista and Investor LLC are collectively
referred to as the “Parties” and each as a “Party.”

RECITALS:

     A. Carrizo (Marcellus) LLC, a Delaware limited liability company (“Carrizo PA”), COGI and the
Avista Parties are parties to that certain Participation Agreement, dated November 3, 2008 and
effective as of August 1, 2008, as amended by that certain Amendment No. 1 to Participation
Agreement by and among Carrizo PA, COGI and the Avista Parties, dated as of August 4, 2010 and as
further amended by that certain Omnibus Amendment (the “Omnibus Amendment”) by and among Carrizo
PA, COGI and the Avista Parties, dated as of September 10, 2010 (the “Original Participation
Agreement”).

     B. On August 4, 2010, Carrizo PA and COGI, on the one hand, and Investor LLC, on the other
hand, entered into separate purchase and sale agreements with Reliance Marcellus II, LLC whereby
Carrizo PA and Investor LLC agreed to sell certain of their respective Oil and Gas Interests
located in the Commonwealth of Pennsylvania and subject to the Original Participation Agreement
(the “Reliance Disposition”). The Reliance Disposition closed on September 10, 2010.

     C. On the Execution Date and concurrently with the execution hereof, Carrizo PA and COGI
assigned to each of Carrizo and Investor LLC an undivided 50% interest in and to all of Carrizo
PA’s and COGI’s right, title and interest in and to the Oil and Gas Interests dedicated by Carrizo
PA and COGI pursuant to the Original Participation Agreement located in the geologic play area
commonly known as the Marcellus Shale in Maryland, New York, Pennsylvania, Virginia and West
Virginia (the “Designated Area”), none of which were included in the Reliance Disposition (the
“Marcellus Restructuring”).

     D. In connection with the Marcellus Restructuring, Carrizo PA assigned to Carrizo all of
Carrizo PA’s right, title and interest in and to the Original Participation Agreement and that
certain Operating Agreement, dated November 3, 2008 and effective August 1, 2008, as amended by the
Omnibus Amendment and the Amendment to Operating Agreement, dated as of the Execution Date, and as
otherwise amended from time to time (the “Operating Agreement”).

     E. Giving effect to the Reliance Disposition and the Marcellus Restructuring, the Parties
desire to amend and restate the Original Participation Agreement to more accurately reflect the
Parties’ joint development activities with respect to the Oil and Gas Interests in the Designated
Area.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of

 

 

which is hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

     “ACP II” means ACP II AMS LP, a Delaware limited partnership.

     “ACP II Offshore” means ACP II AMS (Offshore) LP, a Delaware limited partnership.

     “Affiliate” means any Person that, directly or indirectly, or through one or more
intermediaries controls, is controlled by, or is under common control with another Person. For the
purposes of this Agreement, “control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management of a Person, whether through the ownership of
Voting Securities or by contract, agency, or otherwise. Notwithstanding the foregoing, COGI and
its Subsidiaries and other Affiliates shall not be deemed to be Affiliates of Avista or any of its
Subsidiaries or its other Affiliates, and vice versa.

     “Agreement” means this Amended and Restated Participation Agreement.

     “AMI” has the meaning set forth in the Operating Agreement.

     “Avista” means Avista Capital Partners II, L.P., a Delaware limited partnership.

     “Avista Allocation Threshold” means the first time that (a) the aggregate amounts of Net Cash
Flow From Production allocated to Investor LLC pursuant to Section 3.1(a) and proceeds allocated to
Investor LLC pursuant to Section 3.2(a) equal (b) $11,456,135.89.

     “Avista Controlled Entity” means (a) any general partner or managing member of ACP II or ACP
II Offshore or any Affiliate of such general partner or managing member (excluding portfolio
companies), provided that such Person is controlled by the same Persons (the “Avista Controlling
Parties”) that, as of November 3, 2008, controlled Avista GP, or (b) any Person organized, formed
or incorporated and managed or controlled by the Avista Controlling Parties (excluding portfolio
companies) as a vehicle for purposes of making investments.

     “Avista GP” means Avista Capital Partners II GP, LLC, a Delaware limited liability company.

     “Avista Offshore” means Avista Capital Partners (Offshore) II LP, a Delaware limited
partnership.

     “Avista Parties” means Avista and Investor LLC.

     “Business Day” means any day other than a Saturday, a Sunday or a day on which banks are
closed for business in Houston, Texas.

     “Carrizo” means Carrizo (Marcellus) WV LLC, a Delaware limited liability company.

     “Carrizo Allocation Threshold” means the first time that (a) the aggregate amounts of

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Net Cash
Flow From Production allocated to Carrizo pursuant to Section 3.1(b) and proceeds allocated to
Carrizo pursuant to Section 3.2(b) equal (b) $11,456,135.89.

     “Carrizo Cap” means $55,453,916.71, excluding any payments by Carrizo to Investor LLC under
Section 5.2(b) and expenditures by Carrizo in connection with Exclusive Operations conducted by it
in which Investor LLC does not participate.

     “Carrizo Equalization Share” means 25%, which is 100% minus the Investor Equalization Share.

     “Carrizo PA” has the meaning set forth in the recitals to this Agreement.

     “Carrizo Parties” means COGI and Carrizo.

     “Cash Call” has the meaning set forth in Exhibit D of the Operating Agreement.

     “Change of Control” means, with respect to any Person, a Transfer of at least a majority of
the Voting Securities of such Person, in one transaction or series of related transactions, to, in
the case of Carrizo, any Person other than COGI or a wholly owned Subsidiary of COGI or in the case
of Investor LLC, any Person other than an Avista Controlled Entity.

     “COGI” means Carrizo Oil & Gas, Inc., a Texas corporation.

     “Designated Area” has the meaning set forth in the recitals to this Agreement.

     “Drilling Unit” has the meaning set forth in the Operating Agreement.

     “Entitlement” means that quantity of Hydrocarbons (excluding all quantities used or lost in
Joint Operations) of which a Party has the right and obligation to take delivery pursuant to the
terms of the Operating Agreement, as such rights and obligations may be adjusted by the terms of
any lifting, balancing or other disposition agreements entered into pursuant to Article 9 of the
Operating Agreement.

     “Equity Offeror” has the meaning set forth in Section 4.3(b)(i).

     “Equity Purchase Rights” has the meaning set forth in Section 4.2(b).

     “Equity ROFR Initiator” has the meaning set forth in Section 4.2(b).

     “Equity Tag-Along Initiator” has the meaning set forth in Section 4.3(b)(i).

     “Equity Tag-Along Interest” means, with respect to Carrizo or Investor LLC, as applicable,
such Party’s interest in the Properties (expressed as a percentage of all of such Party’s interest
in the Properties) that is equal to the product of (x) such Party’s Participation Interest in all
of the Properties and (y) the Indirect Beneficial Ownership Interest in the other Party that is
subject to the Proposed Equity Tag-Along Sale.

     “Equity Tag-Along Notice” has the meaning set forth in Section 4.3(b)(ii).

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     “Equity Tag-Along Rights” has the meaning set forth in Section 4.3(b)(i).

     “Exclusive Operations” has the meaning set forth in the Operating Agreement and
includes any Subsequent Exclusive Operation described in Section 5.2(b).

     “Governmental Authority” or “Governmental Authorities” means any nation or state and any
political subdivision thereof and any governmental, regulatory or administrative agency,
commission, body or other authority exercising or entitled to exercise any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or power; and any court or
governmental tribunal.

     “Hydrocarbons” means oil, condensate, gas, casinghead gas and other liquid or gaseous
hydrocarbons.

     “Indirect Beneficial Ownership Interest” means Carrizo’s or Investor LLC’s, as applicable,
interest in the Properties (expressed as a percentage of all of such Party’s interest in the
Properties) represented by limited liability company interests in such Party, which the Parties
acknowledge and agree shall be in the same proportion that a Person’s aggregate ownership of
limited liability company interests bears to all of the issued and outstanding limited liability
company interests in such Party; provided that the Profit Interest shall be disregarded for
purposes of such calculation.

     “Investor Equalization Share” means 75%.

     “Investor LLC” means ACP II Marcellus LLC, a Delaware limited liability company.

     “Investor LLC Agreement” means the limited liability company agreement of Investor LLC, dated
November 3, 2008, as amended from time to time.

     “Investor LLC Cap” means $55,453,916.71, excluding any payments by Investor LLC to Carrizo
under Section 5.2(b) and expenditures by Investor LLC in connection with Exclusive Operations
conducted by it in which Carrizo does not participate.

     “JOA Trigger Date” has the meaning set forth in Section 5.2(a).

     “Joint Account” has the meaning set forth in the Operating Agreement.

     “Joint Operations” has the meaning set forth in the Operating Agreement.

     “Joint Properties” has the meaning set forth in the Operating Agreement.

     “Laws” means all laws, statutes, rules, regulations, ordinances, orders, decrees,
requirements, judgments and codes of Governmental Authorities.

     “Management Services Agreement” means the Management Services Agreement dated November 3,
2008, by and between COGI and Investor LLC, as amended from time to time.

     “Marcellus Restructuring” has the meaning set forth in the recitals to this Agreement.

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     “Membership Interest” means the interest in Investor LLC designated as such in the Investor
LLC Agreement, having the rights and preferences set forth therein.

     “Minimum Commitment Date” means the date on which the aggregate contributions of the Carrizo
Parties, on the one hand, and the Avista Parties, on the other hand, pursuant to Section 2.1 and
2.2 have satisfied the Carrizo Cap and the Investor LLC Cap.

     “Net Cash Flow From Production” means the positive amount, if any, shown on the Cash Call for
a given calendar month (e.g., March) that is calculated as (a) the proceeds from the sale of the
Parties’ Entitlements to Hydrocarbons from Operations conducted on the Properties actually received
by the Operator in respect of joint marketing conducted pursuant to Section 2.3 during the calendar
month immediately preceding the date of such Cash Call (e.g., February) plus the positive
adjustment, if any, by which estimated operating and capital expenditures for Operations of the
Parties reflected on the Cash Call for the second calendar month immediately preceding the date of
such Cash Call (e.g., January) exceeded actual or accrued operating and capital expenditures for
Operations of the Parties during such second preceding calendar month, less (b) the total amount of
estimated operating and capital expenditures for Operations of the Parties during the calendar
month immediately following the date of such Cash Call (e.g., April) less the negative adjustment,
if any, by which actual or accrued operating and capital expenditures for Operations of the Parties
reflected on the Cash Call for the second calendar month immediately preceding the date of such
Cash Call (e.g., January) exceeded the estimated operating and capital expenditures for Operations
of the Parties reflected on the Cash Call for such second preceding calendar month.
Notwithstanding the foregoing, both the proceeds from the sale of Entitlements and the operating
and capital expenditures attributable to Properties that either (i) Carrizo has Transferred to COGI
or a wholly-owned Subsidiary of COGI or (ii) Investor LLC has Transferred to an Avista Controlled
Entity in accordance with Section 4.1(b), shall be included in this definition of “Net Cash Flow
From Production.” However, neither the proceeds from the sale of Entitlements, nor the operating
and capital expenditures attributable to Exclusive Operations where either Carrizo or Investor LLC
is a Non-Consenting Party pursuant to (i) Article 7.4(B)(1) of the Operating Agreement or Section
5.2(b) or (ii) Article 7.4(B)(2), (3) or (4) of the Operating Agreement until the termination of
the Non-Consenting Party’s relinquishment of its rights in the affected Property, shall be included
in this definition of “Net Cash Flow From Production.”

     “Non-Consenting Party” means either Carrizo or Investor LLC, if such Party elects not to
participate in an Exclusive Operation as described in the Operating Agreement. For the avoidance
of doubt, as used herein, the term “Non-Consenting Party” shall not include any other party that
may be subject to the Operating Agreement.

     “Offered Equity Interest” has the meaning set forth in Section 4.3(b)(ii).

     “Offered Property Interest” has the meaning set forth in Section 4.3(a)(ii).

     “Oil and Gas Interests” means (a) interests in and rights with respect to oil, gas, mineral,
and related properties and assets of any kind and nature, direct or indirect, including working,
leasehold and mineral interests and operating rights and royalties, overriding royalties,
production payments, net profit interests and other nonworking interests and nonoperating

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interests; (b) all interests in rights with respect to Hydrocarbons and other minerals or revenues
therefrom, all contracts in connection therewith and claims and rights thereto (including all oil
and gas leases, operating agreements, unitization and pooling agreements and orders, division
orders, transfer orders, mineral deeds, royalty deeds, oil and gas sales, exchange and
processing contracts and agreements, and in each case, interests thereunder), surface interests,
fee interests, reversionary interests, reservations, and concessions; (c) all easements, rights of
way, licenses, permits, leases, and other interests associated with, appurtenant to, or necessary
for the operation of any of the foregoing; and (d) all interests in equipment and machinery
(including wells, well equipment and machinery), oil and gas production, gathering, transmission,
treating, processing, and storage facilities (including tanks, tank batteries, pipelines, and
gathering systems), pumps, water plants, electric plants, gasoline and gas processing plants,
refineries, and other tangible personal property and fixtures associated with, appurtenant to, or
necessary for the operation of any of the foregoing.

     “Omnibus Amendment” has the meaning set forth in the recitals to this Agreement.

     “Operator” has the meaning set forth in the Operating Agreement.

     “Operating Agreement” has the meaning set forth in the recitals to this Agreement.

     “Operating Committee” has the meaning set forth in the Operating Agreement.

     “Operation” means any Joint Operation or Exclusive Operation in which both Investor LLC and
Carrizo participate.

     “Participation Interest” means as to any Party, the undivided interest of such Party
(expressed as a percentage of the total interests of all the Parties) in the rights and obligations
derived from the Parties’ respective interests in each of the Properties and each Operation
thereon.

     “Party” and “Parties” has the meaning set forth in the preamble to this Agreement.

     “Permitted Pledge” means the pledge, hypothecation or other voluntary encumbrance of a Party’s
direct or indirect interest (including the securities of any of its Affiliates) in the Properties;
provided that (a) each pledge, hypothecation or encumbrance of a Party’s direct interest in the
Properties complies with the Operating Agreement, and (b) with respect to each pledge,
hypothecation or other voluntary encumbrance of the limited liability company interests of Carrizo
or Investor LLC, any Transfer of such limited liability company interests in connection with a
secured party’s exercise of remedies under such pledge, hypothecation or encumbrance is subject to
the other Party’s rights under Sections 4.2(b) and 4.3(b) of this Agreement.

     “Permitted Pledge Transfer” means, subject to Section 4.1(c), any Transfer made in connection
with a secured party’s exercise of remedies under a Permitted Pledge or any Transfer made after
commencement of a bankruptcy or insolvency proceeding respecting the Party bound by the Permitted
Pledge and approved by the court or tribunal having jurisdiction over such proceeding.

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     “Person” means any individual, firm, corporation, partnership, limited liability company,
joint venture, association, trust, unincorporated organization, Governmental Authority, or any
other entity.

     “Profit Interest” means the interest in Investor LLC designated as such in the Investor LLC
Agreement, having the rights and preferences set forth therein.

     “Properties” means all Oil and Gas Interests dedicated pursuant to Sections 2.1(a) and 2.1(b);
provided that any Oil and Gas Interests in Properties relinquished by Carrizo or Investor LLC
pursuant to Exclusive Operations under Article 7 of the Operating Agreement or as set forth in
Section 5.2(b) shall not be deemed “Properties” hereunder from and after such event, except to the
extent otherwise expressly provided herein.

     “Property Offeror” has the meaning set forth in Section 4.3(a)(ii).

     “Property Tag-Along Initiator” has the meaning set forth in Section 4.3(a)(i).

     “Property Tag-Along Interest” has the meaning set forth in Section 4.3(a)(iii).

     “Property Tag-Along Notice” has the meaning set forth in Section 4.3(a)(ii).

     “Property Tag-Along Rights” has the meaning set forth in Section 4.3(a)(i).

     “Proposed Equity Tag-Along Sale” means the Transfer of limited liability company interests
(expressed as a percentage), other than the Profit Interest, in either Carrizo or Investor LLC, as
applicable, to, in the case of Carrizo, any Person other than COGI or a wholly owned Subsidiary of
COGI, or in the case of Investor LLC, any Person other than an Avista Controlled Entity, in one
transaction or a series of related transactions, that constitutes a Transfer of an Indirect
Beneficial Ownership Interest in Carrizo’s or Investor LLC’s, as applicable, interests in the
Properties that is equal to or greater than the Tag-Along Threshold.

     “Proposed Property Tag-Along Sale” has the meaning set forth in Section 4.3(a)(i).

     “Proposing Party” has the meaning set forth in Section 5.2(b).

     “Prospect” has the meaning set forth in the Operating Agreement.

     “Qualifying Equity Interests” has the meaning set forth in Section 4.2(b).

     “Qualifying Equity Transfer” has the meaning set forth in Section 4.2(b).

     “Reliance Disposition” has the meaning set forth in the recitals to this Agreement.

     “Selling Member” has the meaning set forth in Section 4.2(b).

     “Subsequent Exclusive Operation” has the meaning set forth in the Operating Agreement.

     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability

7

 

company or other business entity of which a majority of the shares of securities or other interests
having ordinary voting power for the election of directors or other governing body (other than
securities or interests having such power only by reason of the happening of a contingency) are at
the time beneficially owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.

     “Tag-Along Threshold” means, with respect to Carrizo or Investor LLC, (a) 10% of such Party’s
interest in the proved reserves (based on the most recent independent reserve report) in the
Properties, (b) 10% of the aggregate acquisition cost of such Party’s net mineral leasehold
interests in the Properties or (c) 10% of such Party’s book value in the Joint Properties.

     “Taxes” means all income, profits, franchise, sales, use, ad valorem, property, severance,
production, excise, stamp, documentary, real property transfer or gain, gross receipts, goods and
services, registration, capital, transfer, or withholding taxes or other governmental fees or
charges imposed by any Governmental Authority, including any interest, penalties, or additional
amounts that may be imposed with respect thereto.

     “Transaction Documents” means this Agreement, the Operating Agreement, the Investor LLC
Agreement, the Management Services Agreement and any instrument of assignment, conveyance and sale
pursuant to which a Carrizo Party assigns and transfers to Investor LLC a record title or
beneficial ownership interest in any Oil and Gas Interests.

     “Transfer” means any sale, assignment, conveyance, transfer or other disposition, voluntary or
involuntary, by operation of law (including without limitation by merger or other business
combination transaction) or otherwise; provided that unless otherwise specified herein, a Party’s
entry into a Permitted Pledge shall not constitute a Transfer. When used as a verb, the term
“Transfer” shall have a correlative meaning.

     “Transfer Taxes” means any Transfer, documentary, sales, use, registration, value-added, and
other similar Taxes, including interest, fines, penalties or additional amounts which may be
imposed with respect thereto, incurred in connection with the execution, delivery or performance of
this Agreement or the transactions contemplated hereby.

     “Voting Securities” means any securities which at present or upon conversion entitle the owner
or holder thereof to vote for the election of directors of the entity who issued such securities
or, with respect to unincorporated entities, Persons exercising similar functions.

     “Work Program and Budget” has the meaning set forth in the Operating Agreement.

ARTICLE 2

DEDICATIONS; EXPENSE ALLOCATION; JOINT MARKETING

          2.1 Dedication of Oil and Gas Interests.

          (a) The Carrizo Parties hereby confirm the dedication, for the joint benefit of Carrizo
and Investor LLC, of (i) 100% of their interests in and to the properties described on
Exhibit 2.1, and all of their Oil and Gas Interests associated with such

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properties and (ii)
100% of their interests in the Oil and Gas Interests that the parties to the Operating
Agreement agree to acquire pursuant to the Operating Agreement.

          (b) Investor LLC hereby confirms the dedication, for the joint benefit of Investor LLC
and Carrizo, of (i) 100% of its interests in and to the properties described
on Exhibit 2.1, and all of its Oil and Gas Interests associated with such properties
and (ii) 100% of its interest in the Oil and Gas Interests that the parties to the Operating
Agreement agree to acquire pursuant to the Operating Agreement.

          (c) The Parties acknowledge that, following the Effective Date, activities and
operations with respect to certain Oil and Gas Interests dedicated pursuant to Sections
E.2.1(a) and (b) may constitute Exclusive Operations whereby Carrizo or Investor LLC elect
not to participate in such activities or operations in accordance with the Operating
Agreement. In such case, the Parties agree that notwithstanding Sections (a) and (b), the
Oil and Gas Interests associated with Operations relinquished by Carrizo or Investor LLC
pursuant to Exclusive Operations (i) under Article 7.4(B)(1) of the Operating Agreement or
as set forth in Section 5.2(b) shall no longer constitute Properties hereunder and (ii)
under Article 7.4(B)(2), (3) or (4) of the Operating Agreement shall not constitute
Properties hereunder unless and until the Non-Consenting Party has reinstated its rights
pursuant to Article 7.4(C)(2) of the Operating Agreement.

          2.2 Capital Commitments.

          (a) Investor LLC shall fund all expenditures and amounts allocated to or required to be
paid by Investor LLC under the Operating Agreement, up to the Investor LLC Cap.

          (b) Carrizo shall fund all expenditures and amounts allocated to or required to be paid
by it under the Operating Agreement, up to the Carrizo Cap.

          (c) From and after the satisfaction of the funding obligations provided for in Sections
2.2(a) and (b) above, Carrizo’s and Investor LLC’s funding obligations shall be governed by
the Operating Agreement. At Carrizo’s election, the funding of expenditures and other
amounts provided for in Sections 2.2(a) and (b) above may be accomplished by net cash calls
in accordance with the Operating Agreement.

          (d) Notwithstanding anything to the contrary herein or in the Operating Agreement, if
either Party fails to make any capital commitments as required by Section 2.2(a) or Section
2.2(b), as applicable, and such failure is not cured within ten (10) Business Days of notice
provided by the non-defaulting Party, at the option of the non-defaulting Party the
provisions in Article 20.3 of the Operating Agreement (regarding the AMI) shall terminate
and be of no further effect as between Carrizo and Investor LLC.

          2.3 Joint Marketing. Notwithstanding anything to the contrary in Article 9 of the
Operating Agreement, until the provisions of Section 3.1(a) and 3.1(b) are no longer applicable,
Carrizo, in its capacity as Operator under the Operating Agreement, shall use commercially
reasonable efforts, and Investor LLC hereby irrevocably designates Carrizo as

9

 

agent for such
purpose, to market on behalf of Investor LLC all of Investor LLC’s Entitlement to Hydrocarbons from
the Properties, together with Carrizo’s Entitlement to Hydrocarbons from the Properties, as a
single stream. Investor LLC shall not market and shall cause its Affiliates not to market any of
its Entitlement without the prior written consent of Carrizo. Investor LLC
acknowledges and agrees that Carrizo does not warrant or guarantee any market or price that it
will be able to procure for the Parties’ collective Entitlement.

ARTICLE 3

ALLOCATIONS OF NET CASH FLOW FROM PRODUCTION 

AND PROPERTY SALE PROCEEDS

          3.1 Allocation of Net Cash Flow From Production. Within twenty (20) days following
the end of each calendar month, Net Cash Flow From Production shall be allocated between Investor
LLC and Carrizo as follows:

          (a) the Investor Equalization Share thereof to Investor LLC, and the Carrizo
Equalization Share thereof to Carrizo, until the Avista Allocation Threshold is reached;

          (b) thereafter, 100% to Carrizo, until the Carrizo Allocation Threshold is reached; and

          (c) thereafter, with respect to each Operation from which such Net Cash Flow From
Production arises, in accordance with their respective Participation Interests in that
Operation.

          3.2 Allocation of Proceeds from Property Dispositions. Except as provided in Section
3.3, proceeds received in the preceding calendar month from the Transfer of any Oil and Gas
Interest in the Properties shall be allocated at the same time as allocations are being made
pursuant to Section 3.1, except that proceeds from a single Property Transfer in excess of
$1,000,000 shall be allocated promptly after receipt thereof, in either case, between Investor LLC
and Carrizo as follows:

          (a) the Investor Equalization Share thereof to Investor LLC and the Carrizo
Equalization Share thereof to Carrizo, until the Avista Allocation Threshold is reached;

          (b) thereafter, 100% to Carrizo, until the Carrizo Allocation Threshold is reached; and

          (c) thereafter, in accordance with the Parties’ respective Participation Interests in
the Oil and Gas Interests disposed of.

          3.3 Special Allocation of Proceeds from Certain Property Dispositions. Proceeds from
any Transfer of Oil and Gas Interests in the Properties (i) by Carrizo to COGI or a wholly owned
Subsidiary of COGI, (ii) by Avista to an Avista Controlled Entity in accordance with Section
4.1(b), (iii) attributable to Operations relinquished by Carrizo or Investor LLC pursuant to
Exclusive Operations under Article 7.4(B)(1) of the Operating Agreement or as set

10

 

forth in Section
5.2(b) or (iv) effected pursuant to Sections 4.2(a), 4.3(a)(v) or 4.3(b), shall not be subject
to Section 3.2 and shall be allocated 100% to the Transferring Party. Proceeds from any Transfer
of Oil and Gas Interests in Properties pursuant to which Exclusive Operations were conducted by a
Party in which the other Party did not participate pursuant to Article 7.4(B)(2),
(3) or (4) of the Operating Agreement shall be allocated 100% to the Party participating in
such Exclusive Operations to the extent required to terminate the relinquishment of the
Non-Consenting Party’s rights in the affected Property or Properties pursuant to Article 7.4(C)(2)
of the Operating Agreement and shall not be subject to Section 3.2; provided, if such allocation
results in termination of such relinquishment, any remaining proceeds shall be allocated to the
Parties as otherwise contemplated by Section 3.2,

          3.4 Coordination With Operating Agreement. Nothing in this ARTICLE 3 shall change or
affect any Party’s obligation to pay its proportionate share of all costs and liabilities incurred
in Operations on or in connection with the Properties, as its share thereof is set forth in the
Operating Agreement.

ARTICLE 4

TRANSFER OF OIL AND GAS INTERESTS IN PROPERTIES

          4.1 Transfer Restrictions.

          (a) Carrizo’s Transfer of any of its interest in the Properties dedicated pursuant to
Section 2.1 to any Person shall be subject to Sections 4.2(a) and 4.3(a), except for
Transfers to COGI or any wholly owned Subsidiary of COGI or any Permitted Pledge Transfer.
Transfers of limited liability company interests in Carrizo shall be subject to Section
4.2(b) or Section 4.3(b), as applicable.

          (b) Without the prior written consent of the Carrizo Parties (which may not be
unreasonably withheld), Investor LLC may not Transfer any of its interest in the Properties
to any Avista Controlled Entity. Investor LLC’s Transfer of any of its interest in the
Properties dedicated pursuant to Section 2.1 to any Person shall be subject to Sections
4.2(a) and 4.3(a), except for Transfers to any Avista Controlled Entity with the prior
written consent of the Carrizo Parties (which may not be unreasonably withheld) or any
Permitted Pledge Transfer. Transfers of limited liability company interests in Investor LLC
shall be subject to Section 4.2(b) or Section 4.3(b), as applicable.

          (c) Promptly following receipt, the Carrizo Parties shall provide Investor LLC a copy
of any notification of default under any agreement governing any material funded debt of
Carrizo or any of its Affiliates that are “Restricted Subsidiaries” (as such term may be
defined in COGI’s senior secured revolving credit facility or other similar commercial
financing agreement), the result of which default is to cause, or permit the holder or
holders thereof to cause, such debt to be accelerated. Following Carrizo’s default under
the terms of any Permitted Pledge of Carrizo’s interest in the Properties but prior to the
secured party’s exercise of remedies with respect to such interest, Carrizo agrees to
designate Investor LLC (or its designee) as “co-operator” under the Operating Agreement for
any Operations with respect to such Properties.

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          (d) Notwithstanding any provision of this Agreement to the contrary, any Transfer of a
Party’s interest in the Properties (including, for purposes of this Section 4.1(d) only, a
Party’s entry into a Permitted Pledge) is subject to the restrictions on
Transfer in the event of such Party’s default set forth in Article 8.2(A)(5) of the
Operating Agreement.

          4.2 Transfers Below the Tag-Along Threshold.

          (a) Carrizo and Investor LLC may Transfer their respective interests in the Properties
(in a single transaction or series of related transactions) constituting less than the
Tag-Along Threshold, subject to applicable preferential purchase rights and other Transfer
restrictions set forth in the Operating Agreement; provided that the Parties hereby agree
that any exclusion in the Operating Agreement from such preferential purchase rights and
other Transfer restrictions with respect to Affiliate transactions shall not apply to
Transfers by Carrizo to any Affiliate other than COGI or a wholly owned Subsidiary of COGI
or by Investor LLC to any of its Affiliates.

          (b) In connection with any Transfer of limited liability company interests in Carrizo
or Investor LLC (in such capacity, the “Equity ROFR Initiator”) that is below the threshold
for a Proposed Equity Tag-Along Sale (except Transfers to, in the case of Carrizo, COGI or
any wholly owned Subsidiary of COGI, or in the case of Investor LLC, any Avista Controlled
Entity), in one transaction or a series of related transactions (a “Qualifying Equity
Transfer”), the other Party shall be entitled to exercise a right of first refusal (the
“Equity Purchase Rights”) to purchase the limited liability company interests that are
subject to the Qualifying Equity Transfer (the “Qualifying Equity Interests”) in accordance
with this Section 4.2(b). Once the final terms and conditions of a Qualifying Equity
Transfer have been fully negotiated, the Person that proposes to Transfer (the “Selling
Member”) the Qualifying Equity Interests shall disclose all the final terms and conditions
as are relevant to the Equity ROFR Initiator, and the Equity ROFR Initiator shall forward
such notice to the Party that has the Equity Purchase Rights hereunder (Carrizo or Investor
LLC, as applicable), which notice shall be accompanied by a copy of all instruments or
relevant portions of instruments establishing such terms and conditions. The Party having
the Equity Purchase Rights shall have the right to acquire the Qualifying Equity Interests
from the Selling Member on the same final terms and conditions as such Selling Member
negotiated with the proposed transferee if, within thirty (30) days of the Selling Member’s
notice, such Party delivers to the Equity ROFR Initiator a counter-notification that it
accepts such terms and conditions without reservations or conditions. If Carrizo or
Investor LLC, as applicable, does not deliver such counter-notification, the Selling Member
may complete the Transfer of the Qualifying Equity Interests to the proposed transferee
under terms and conditions no more favorable to the Selling Member than those set forth in
the notice to the Parties, provided that such Transfer is concluded within one hundred
eighty (180) days from the date of the notice.

          4.3 Other Transfers. Preferential purchase rights and other Transfer restrictions set
forth in the Operating Agreement and otherwise applicable shall not apply to any Transfer
(including Transfers described under Section 4.3(b)) of a Party’s direct or indirect

12

 

interests in
the Properties to any Person (in a single transaction or series of related transactions), if such
Oil and Gas Interests equal or exceed the Tag-Along Threshold; provided that any such
Transfer not otherwise excepted in this ARTICLE 4 shall be subject to the restrictions set
forth in this Section 4.3:

               (a) Tag-Along Rights in Sales of the Properties.

     (i) If Carrizo or Investor LLC (such Party, the “Property Tag-Along
Initiator”) desires to Transfer all or a part of its interests in the
Properties to, in the case of Carrizo, a Person that is not COGI or a wholly
owned Subsidiary of COGI, or in the case of Investor LLC, any Person, in a
single transaction or series of related transactions, equal to or greater
than the Tag-Along Threshold (a “Proposed Property Tag-Along Sale”), then
the other Party shall be entitled to exercise tag-along rights to
participate in such Proposed Property Tag-Along Sale (in accordance with
this Section 4.3(a)) at the same price and on the same terms and
conditions as those offered to the Property Tag-Along Initiator (“Property
Tag-Along Rights”).

     (ii) No later than ten (10) Business Days following the Property
Tag-Along Initiator’s receipt of an offer constituting a Proposed Property
Tag-Along Sale, the Property Tag-Along Initiator shall deliver a written
notice (a “Property Tag-Along Notice”) to the other Party stating that it
desires to effect a Proposed Property Tag-Along Sale, which notice shall set
forth (A) the identity of the Person (the “Property Offeror”) that desires
to acquire the Property Tag-Along Initiator’s interest in the Properties,
(B) a summary in reasonable detail of the representations, warranties,
covenants, conditions and indemnification proposed by the Property Offeror,
(C) the Property Tag-Along Initiator’s interest in the Properties (the
“Offered Property Interest”) that the Property Offeror proposes to acquire
(expressed as a percentage of all of the Property Tag-Along Initiator’s
interest of such type in the Properties), (D) the proposed total purchase
price for the Offered Property Interest and (E) any other material terms
governing the offer.

     (iii) Within twenty (20) Business Days of its receipt of a Property
Tag-Along Notice, Carrizo or Investor LLC, as applicable, shall have the
right, but not the obligation, to elect, by written notice to the Property
Tag-Along Initiator, to include a portion of its interest in the Properties
constituting the same type of interest as the Offered Interest in the
Proposed Property Tag-Along Sale (expressed as a percentage of all of such
Party’s interest of such type in the Properties) that is equal to the
product of (x) its Participation Interest in the Properties and (y) the
Offered Property Interest (the “Property Tag-Along Interest”). Such Party’s
failure to give unconditional written notice of such election within such
period shall be deemed an election by such Party not to exercise its
Property Tag-Along Rights.

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     (iv) If Carrizo or Investor LLC, as applicable, exercises its Property
Tag-Along Rights, then both Parties shall participate in the Proposed
Property Tag-Along Sale, and the Offered Property Interest shall be reduced
to the extent of the Property Tag-Along Interest.

     (v) If Carrizo or Investor LLC, as applicable, does not elect to
exercise its Property Tag-Along Rights, then the Property Tag-Along
Initiator may, for a period of sixty (60) days from the date of the Property
Tag-Along Notice, consummate the Proposed Property Tag-Along Sale upon terms
and conditions that are no more favorable to the Property Tag-Along
Initiator than those set forth in the Property Tag-Along Notice.
Immediately after the closing of the Proposed Property Tag-Along Sale, the
Property Tag-Along Initiator shall provide the other Party true and complete
copies of all agreements relating to such Transfer.

     (vi) In the event that the Property Offeror fails to purchase the
Property Tag-Along Interest for which Property Tag-Along Rights have been
properly exercised from Carrizo or Investor LLC, as applicable, in
accordance with Section 4.3(a)(iv) and the Property Tag-Along Initiator
consummates the Proposed Property Tag-Along Sale in violation of this
Section 4.3(a), then the Property Tag-Along Initiator shall be required to
purchase the other Party’s Property Tag-Along Interest in the Properties in
accordance with the provisions of Section 4.3(a)(iv).

          (b) Sales of Membership Interests in Carrizo or Investor LLC. In addition to the
Property Tag-Along Rights of Carrizo and Investor LLC described in Section 4.3(a), the
limited liability company agreements of Carrizo and Investor LLC shall prohibit Transfers of
limited liability company interests in such Party and other transactions that constitute a
Proposed Equity Tag-Along Sale, except in accordance with Section 4.2(b) and this Section
4.3(b).

     (i) In connection with any Proposed Equity Tag-Along Sale with respect
to Carrizo or Investor LLC (in such capacity, the “Equity Tag-Along
Initiator”), the other Party shall be entitled to exercise tag-along rights
to sell to the proposing acquiror (the “Equity Offeror”) the Equity
Tag-Along Interest of its interest in the Properties (the “Equity Tag-Along
Rights”) as determined by Section 4.3(b)(iii).

     (ii) No later than ten (10) Business Days following the Equity
Tag-Along Initiator’s receipt of a notice from one of its members of such
member’s intent to Transfer an amount of limited liability company interests
in the Equity Tag-Along Initiator constituting a Proposed Equity Tag-Along
Sale, the Equity Tag-Along Initiator shall deliver a written notice (an
“Equity Tag-Along Notice”) to Carrizo or Investor LLC, as applicable,
stating that a member of the Equity Tag-Along Initiator desires to effect a
Proposed Equity Tag-Along Sale, which notice shall set forth (A) the
identity of the Equity Offeror, (B) a summary in reasonable detail

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of the representations, warranties, covenants, conditions and
indemnification proposed by the Equity Offeror, (C) the amount of such
member’s limited liability company interests in the Equity Tag-Along
Initiator (the “Offered Equity Interest”) that the Equity Offeror is willing
to acquire (expressed as a percentage of all outstanding limited liability
company interests in the Equity Tag-Along Initiator), (D) the proposed total
purchase price for the Offered Equity Interest and (E) any other material
terms governing the offer.

     (iii) Within twenty (20) Business Days of its receipt of an Equity
Tag-Along Notice, Carrizo or Investor LLC, as applicable, shall have the
right, but not the obligation, to elect, by written notice to the Equity
Tag-Along Initiator, to require that the Equity Offeror acquire such Party’s
Equity Tag-Along Interest in the Properties concurrently with its
consummation of the Proposed Equity Tag-Along Sale; provided that in the
case of a Change of Control of the Equity Tag-Along Initiator, such Party’s
Equity Tag-Along Interest shall equal all of its right, title and interest
in the Properties. Such Party’s failure to give unconditional written
notice of such election within such period shall be deemed an election by
such Party not to exercise its Equity Tag-Along Rights.

     (iv) If Carrizo or Investor LLC, as applicable, exercises its Equity
Tag-Along Rights, then the Equity Offeror shall be required, as a condition
to its acquisition of the Offered Equity Interest, to purchase such Party’s
Equity Tag-Along Interest in the Properties for the market value (expressed
in U.S. dollars) of such interest, based upon the amount in cash a willing
buyer would pay a willing seller in an arm’s length transaction.

     (v) If Carrizo or Investor LLC, as applicable, does not elect to
exercise its Equity Tag-Along Rights, then the Equity Offeror may, for a
period of sixty (60) days from the date of the Equity Tag-Along Notice,
consummate the Proposed Equity Tag-Along Sale upon terms and conditions that
are no more favorable to the member of the Equity Tag-Along Initiator
selling the Offered Equity Interest than those set forth in the Equity
Tag-Along Notice. Immediately after the closing of the Proposed Equity
Tag-Along Sale, the Equity Tag-Along Initiator shall provide Carrizo or
Investor LLC, as applicable, true and complete copies of all agreements
relating to such Transfer.

     (vi) In the event that the Equity Offeror fails to purchase the Equity
Tag-Along Interest in the Properties from Carrizo or Investor LLC, as
applicable, in accordance with Section 4.3(b)(iv) and the Equity Offeror
consummates the Proposed Equity Tag-Along Sale in violation of this Section
4.3(b), then the Equity Tag-Along Initiator shall be required to purchase
the other Party’s Equity Tag-Along Interest in the Properties in accordance
with the provisions of Section 4.3(b)(iv).

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          (c) Certain Transfers of Membership Interests and Investor LLC’s Interest in the
Properties. The Parties agree that (a) at the time of the Transfer of all Membership
Interests in Investor LLC to an unAffiliated third Person, or (b) the sale of all or
substantially all of the assets of Investor LLC to an unAffiliated third Person, Investor
LLC may, by written notice delivered no later than simultaneously with the notice required
under Section 4.3(a)(ii) or 4.3(b)(ii), as applicable, require, as a condition to any such
Transfer and in accordance with Article 4.9(B) of the Operating Agreement, that the Parties
jointly operate the Properties by either (x) entering into a mutually acceptable new joint
operating agreement or series of joint operating agreements on a well by well or Prospect
area by Prospect area basis, each of which will be based upon the AAPL model form attached
hereto as Exhibit 4.3(c) naming Investor LLC as “co-operator” or (y) Carrizo designating
Investor LLC (or its designee) as “co-operator” under the Operating Agreement. The division
of rights, duties and responsibilities of the Parties as “co-operator” shall be negotiated
in good faith with the goal of developing a mutually satisfactory and workable mechanism by
which the Parties shall jointly operate the Properties. If the Parties are unable to reach
mutual agreement on alternative (x) or (y) above, the Parties shall work together in good
faith to develop an alternative solution.

ARTICLE 5

OPERATING AGREEMENT AND CERTAIN RESTRICTIONS

          5.1 Operations Subject to Laws, Contract and Operating Agreement. The activities of
Carrizo and Investor LLC with respect to the Designated Area shall be conducted subject to
applicable Laws and the terms of this Agreement and the Operating Agreement.

          5.2 Operating Agreement. Investor LLC and Carrizo are parties to the Operating
Agreement, which governs the Joint Operations with respect to the exploration and development of
the Properties. Notwithstanding any provision of the Operating Agreement to the contrary, Investor
LLC and Carrizo agree as follows:

          (a) The AMI shall not be reduced to the Prospect areas in accordance with Article
20.3(A) of the Operating Agreement until the first to occur of: (i) December 31, 2010; (ii)
the Minimum Commitment Date; (iii) Carrizo designates Investor LLC (or its designee) as
“co-operator” of the Properties pursuant to Section 4.1(c); and (iv) a request by Investor
LLC that it (or its designee) be designated as “co-operator” of the Properties pursuant to
Section 4.3(c) (such date, the “JOA Trigger Date”).

          (b) Until the Minimum Commitment Date, if either Carrizo or Investor LLC is a
Non-Consenting Party in a Subsequent Exclusive Operation proposed by the other Party
pursuant to Article 7.4(B)(2) of the Operating Agreement (the “Proposing Party”), then the
consequence for such Non-Consenting Party’s election not to participate in such Subsequent
Exclusive Operation shall not be as set forth in Article 7.4(C)(2)(a) of the Operating
Agreement, but shall consist of the following: (i) the Proposing Party shall designate a
Drilling Unit consisting of 320 acres around the proposed location of the wellbore as part
of the proposal to conduct such Subsequent Exclusive Operation, and (ii) the Non-Consenting
Party shall permanently sell, transfer and convey to the Proposing Party all of such
Non-Consenting Party’s Participation Interest within such Drilling Unit

16

 

at a price equal to the aggregate acquisition cost actually paid by the Non-Consenting
Party for its Participation Interest in the Drilling Unit, plus the aggregate amount of all
direct costs actually paid by the Non-Consenting Party under the Operating Agreement
attributable to the Drilling Unit after the acquisition thereof. Any Transfer under this
Section 5.2(b) will be subject to the preemptive rights, excluding rights otherwise entitled
to the Non-Consenting Party, set forth in Article 12.2(G) of the Operating Agreement.

          (c) Until the Minimum Commitment Date, Carrizo agrees that the aggregate expenditures
under each six-month Work Program and Budget it proposes pursuant to Article 6.1(B) of the
Operating Agreement will not exceed 115% of the aggregate expenditures under the six-month
Work Program and Budget proposed by it for the calendar quarter immediately preceding each
such proposed Work Program and Budget.

          (d) Until the Minimum Commitment Date, with respect to each Prospect for which any
drilling Operations are proposed in a Work Program and Budget, the Operating Committee will
vote on a well-by-well basis with respect thereto. Until the Minimum Commitment Date,
Investor LLC shall cause each of its representatives on the Operating Committee to vote in
favor of any Exploration Well and associated items as proposed by Carrizo in the Work
Program and Budget.

          (e) Until Investor LLC (or its designee) is designated as “co-operator” of the
Properties pursuant to Section 4.1(c) or 4.3(c), any amounts payable to the Operator by
Investor LLC in respect of proposals approved by Investor LLC under Article 5.12 of the
Operating Agreement (Voting by Notice) that are in excess of the amounts that would
otherwise be payable by Investor LLC as contemplated by the Work Program and Budget in
effect at such time shall be due by the later of (i) fifteen (15) Business Days from
Investor LLC’s approval and (ii) the first Business Day of the Calendar Quarter immediately
following such approval notwithstanding any other time limit set forth in Article 1.6 of
Exhibit D to the Operating Agreement (Payments and Advances).

          (f) The minimum percent of Participating Interest necessary to approve decisions of the
Operating Committee shall not be modified as provided in Article 5.9(B) under the Operating
Agreement until the JOA Trigger Date.

          (g) In the event of a conflict between the provisions of this Agreement and the
provisions of the Operating Agreement, the provisions of this Agreement shall prevail.

          5.3 Restrictions on Avista’s Investments in the AMI. Without the prior written
consent of COGI, which may not be unreasonably withheld, Avista shall not (and shall cause its
controlled Affiliates not to), directly or indirectly, make any controlling investment in any third
Person engaged or that engages in the exploration, exploitation or development of Hydrocarbons
within the AMI, except as provided in this Agreement and except for such activities that are de
minimis or incidental to activities in the AMI other than exploration, exploitation or development
of Hydrocarbons.

17

 

ARTICLE 6

INFORMATION RIGHTS

     Within forty-five (45) days following each calendar quarter after the Execution Date, Carrizo
shall provide Investor LLC with a written report discussing the results of Joint Operations with
respect to the Properties that is in substantial compliance with the substantive requirements of
Item 303 under Regulation S-K (17 CFR Part 229.310) (but reduced to take into account the matters
for which such report will be used). The Avista Parties shall provide COGI with such information
concerning the Avista Parties as COGI may reasonably request in order to timely comply with COGI’s
reporting obligations under the Securities Exchange Act of 1934, as amended, or COGI’s disclosure
obligations with respect to any registration statement it files under the Securities Act of 1933,
as amended.

ARTICLE 7

REPRESENTATIONS

          7.1 Representations and Warranties of the Carrizo Parties. The Carrizo Parties hereby
represent and warrant to the Avista Parties as of the Execution Date that:

          (a) Ownership of Carrizo. COGI owns, directly or indirectly, all of the issued
and outstanding securities of Carrizo.

          (b) Organization and Good Standing. Each of the Carrizo Parties is an entity
duly incorporated or otherwise organized, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to carry on its
business as currently conducted. Neither of the Carrizo Parties is in violation of any of
the provisions of its respective certificate or articles of incorporation, bylaws or other
organizational, charter or equivalent documents. Each of the Carrizo Parties is duly
qualified to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in
good standing, as the case may be, would not reasonably be expected to have a material and
adverse effect on the ability of such Carrizo Party to perform its obligations under this
Agreement.

          (c) Authorization of Agreement. Each of the Carrizo Parties has the requisite
power and authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The execution and delivery
of this Agreement by each of the Carrizo Parties and the consummation by such Carrizo Party
of the transactions contemplated hereby have been duly authorized by all necessary action on
the part of such Carrizo Party and no further action is required by such Carrizo Party, its
board of directors or other governing body or shareholders, members or partners in
connection herewith. This Agreement has been duly executed by each Carrizo Party and, when
executed and delivered by the Avista Parties in accordance with the terms hereof, will
constitute the valid and binding obligation of such Carrizo Party, enforceable against such
Carrizo Party in accordance

18

 

with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other Laws of general application affecting enforcement of
creditors’ rights generally and (ii) as limited by Laws relating to the availability of
specific performance, injunctive relief or other equitable remedies.

          (d) No Violation. The execution, delivery and performance of this Agreement by
the Carrizo Parties and the consummation by the Carrizo Parties of the transactions
contemplated hereby do not (i) conflict with or violate any provision of either of the
Carrizo Parties’ certificate or articles of incorporation, bylaws or other organizational,
charter or equivalent documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or instrument (evidencing a
Carrizo Party’s debt or otherwise) or other understanding to which either of the Carrizo
Parties is a party or by which any property or asset of either Carrizo Party is bound or
affected, or (iii) subject to any approvals which are expressly required under the terms of
any applicable Law, in order to consummate the transactions contemplated by this Agreement,
result in a violation of any Law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or Governmental Authority to which either Carrizo Party is
subject; except in the case of each of clauses (ii) and (iii), such as would not,
individually or in the aggregate, reasonably be expected to have a material and adverse
effect on the ability of either Carrizo Party to perform its obligations under this
Agreement.

          (e) Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of the Carrizo
Parties.

          7.2 Representations and Warranties of the Avista Parties. The Avista Parties
represent and warrant to the Carrizo Parties as of the date of the Execution Date that:

          (a) Ownership of Investor LLC. Avista owns, directly or indirectly, all of the
issued and outstanding securities of ACP II; Avista Offshore owns, directly or indirectly,
all of the issued and outstanding securities of ACP II Offshore; and except for the Profit
Interest, ACP II and ACP II Offshore own all of the issued and outstanding securities of
Investor LLC. Avista GP is the sole general partner of and controls each of Avista and
Avista Offshore.

          (b) Organization and Good Standing. Each of the Avista Parties is an entity
duly incorporated or otherwise organized, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to carry on its
business as currently conducted. Neither of the Avista Parties is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws or other
organizational, charter or equivalent documents. Each of the Avista Parties is duly
qualified to conduct business and is in good standing as a foreign corporation or other

19

 

entity in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, would not reasonably be expected to have a material
and adverse effect on the ability of such Avista Party to perform its obligations under this
Agreement.

          (c) Authorization of Agreement. Each of the Avista Parties has the requisite
power and authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The execution and delivery
of this Agreement by each of the Avista Parties and the consummation by such Avista Party of
the transactions contemplated hereby have been duly authorized by all necessary action on
the part of such Avista Party and no further action is required by such Avista Party, its
board of directors or other governing body or shareholders, members or partners in
connection herewith. This Agreement has been duly executed by each Avista Party and, when
executed and delivered by the Carrizo Parties in accordance with the terms hereof, will
constitute the valid and binding obligation of such Avista Party, enforceable against such
Avista Party in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other Laws of general application affecting
enforcement of creditors’ rights generally and (ii) as limited by Laws relating to the
availability of specific performance, injunctive relief or other equitable remedies.

          (d) No Violation. The execution, delivery and performance of this Agreement by
the Avista Parties and the consummation by the Avista Parties of the transactions
contemplated hereby do not (i) conflict with or violate any provision of either of the
Avista Parties’ certificate or articles of incorporation, bylaws or other organizational,
charter or equivalent documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or instrument (evidencing a
Avista Party’s debt or otherwise) or other understanding to which either of the Avista
Parties is a party or by which any property or asset of either Avista Party is bound or
affected, or (iii) subject to any approvals which are expressly required under the terms of
any applicable Law, in order to consummate the transactions contemplated by this Agreement,
result in a violation of any Law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or Governmental Authority to which either Avista Party is
subject; except in the case of each of clauses (ii) and (iii), such as would not,
individually or in the aggregate, reasonably be expected to have a material and adverse
effect on the ability of either Avista Party to perform its obligations under this
Agreement.

          (e) Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of the Avista
Parties.

20

 

          7.3 Disclaimer of Other Representations. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTIONS 7.1 AND 7.2 HEREOF OR REPRESENTATIONS AND WARRANTIES EXPRESSLY
SET FORTH IN ANY OF THE OTHER TRANSACTION DOCUMENTS, THE CARRIZO PARTIES AND THE AVISTA PARTIES
MAKE NO, AND DISCLAIM ANY, WARRANTY OR REPRESENTATION OF ANY KIND, EITHER EXPRESS, IMPLIED,
STATUTORY, OR OTHERWISE, INCLUDING ANY REPRESENTATION OR WARRANTY AS TO (A) TITLE, (B)
MERCHANTABILITY OF ALL OR ANY PART OF THE PROPERTIES DEDICATED OR TRANSFERRED HEREUNDER, (C)
FITNESS FOR ALL OR ANY PART OF THE PROPERTIES FOR ANY PARTICULAR PURPOSE, OR (D) CONFORMITY OF ALL
OR ANY PART OF THE PROPERTIES DEDICATED OR TRANSFERRED HEREUNDER TO MODELS OR SAMPLES OF MATERIALS.
EXCEPT AS SET FORTH IN SECTIONS 7.1 AND 7.2, THE CARRIZO PARTIES AND THE AVISTA PARTIES MAKE NO
WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, AS TO THE ACCURACY OR
COMPLETENESS OF ANY DATA, REPORTS, RECORDS, PROJECTIONS, INFORMATION, OR MATERIALS NOW, HERETOFORE,
OR HEREAFTER FURNISHED OR MADE AVAILABLE TO THE OTHER PARTIES IN CONNECTION WITH THE PROPERTIES
DEDICATED OR TRANSFERRED HEREUNDER, INCLUDING ANY DESCRIPTION OF THE PROPERTIES DEDICATED OR
TRANSFERRED HEREUNDER, PRICING ASSUMPTIONS, OR QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY)
ATTRIBUTABLE TO THE PROPERTIES DEDICATED OR TRANSFERRED HEREUNDER, OR THE ABILITY OR POTENTIAL OF
THE PROPERTIES DEDICATED OR TRANSFERRED HEREUNDER TO PRODUCE HYDROCARBONS.

ARTICLE 8

RELATIONSHIP OF THE PARTIES

          8.1 Independent Co-Owners. Except as provided in Exhibit 8.1, it is not the intention
of the Parties to create, nor shall this Agreement be construed as creating a relationship of
partnership, association, principal and agent, joint venture or a mining or other association, or
otherwise render the Parties liable as partners. The liability of the Parties hereto shall be
several and not joint or collective.

          8.2 Right of Competition. Except as expressly set forth in Sections 5.3 and the
Operating Agreement, nothing in this Agreement shall preclude any Party, or its Affiliates, from
engaging in any business or purchasing any property of any sort whatsoever, whether or not in
competition with Operations under this Agreement, without consulting the other Party or inviting or
allowing the other Party to participate therein, and the doctrine of corporate opportunity, or any
analogous doctrine, shall not apply. Except as expressly set forth in the Transaction Documents,
no Carrizo Party shall have any duty, including any fiduciary duty, to any Avista Party, and vice
versa.

21

 

ARTICLE 9

GOVERNING LAW; DISPUTE

RESOLUTION AND LIMITATION OF LIABILITY

          9.1 Governing Law. THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, USA WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.

          9.2 Dispute Resolution.

          (a) Any dispute, controversy or claim arising out of or in relation to or in connection
with this Agreement, including without limitation any dispute as to the construction,
validity, interpretation, enforceability or breach of this Agreement, shall be mediated by a
mutually acceptable mediator, which shall commence within thirty (30) days after written
notice by one Party to the other demanding mediation. No Party may unreasonably withhold
consent to the selection of a mediator. The mediation shall be held in Honolulu, Hawaii.
The Carrizo Parties and the Avista Parties shall share the costs of the mediation equally,
except that each Party shall bear its own costs and expenses, including attorneys’ fees,
witness fees, travel expenses and preparation costs.

          (b) If the Parties are unable to resolve such dispute, controversy or claim pursuant to
the provisions in Section 9.2(a) within thirty (30) days after the commencement of such
mediation, a Party may seek relief from a court of competent jurisdiction. THE PARTIES
HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE COURTS OF TEXAS LOCATED
IN HOUSTON, TEXAS OR THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN HOUSTON,
TEXAS AND APPROPRIATE APPELLATE COURTS THEREFROM, AND EACH PARTY HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH DISPUTE, CONTROVERSY OR CLAIM MAY BE HEARD AND DETERMINED
IN SUCH COURTS. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAWS, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUCH DISPUTE, CONTROVERSY OR CLAIM BROUGHT IN ANY SUCH COURT OR ANY DEFENSE OF
INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE, CONTROVERSY OR CLAIM. EACH OF THE
PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

          9.3 Actual Damages. NO PARTY SHALL BE LIABLE OR HAVE ANY RESPONSIBILITY TO ANY OTHER
PARTY FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES INCLUDING LOST EARNINGS OR
PROFITS. SUCH LIMITATION ON LIABILITY SHALL APPLY TO ANY CLAIM OR ACTION, WHETHER IT IS BASED IN
WHOLE OR IN PART ON CONTRACT,

22

 

NEGLIGENCE, STRICT LIABILITY, TORT, STATUTE OR ANY OTHER THEORY OF LIABILITY.

ARTICLE 10

MISCELLANEOUS

          10.1 Counterparts. This Agreement may be executed in counterparts, and by different
Parties in separate counterparts, each of which shall be deemed an original instrument, but all
such counterparts together shall constitute one agreement.

          10.2 Notice. All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder
shall be deemed duly given if (and then two (2) Business Days after) it is sent by registered or
certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient
as set forth below:

	 	 	 
	If to either of the Avista Parties:	 	If to either of the Carrizo Parties:
	 
	 	 
	ACP II Marcellus LLC

	 	Carrizo Oil & Gas, Inc.
	1000 Louisiana, Suite 1200

	 	1000 Louisiana St., Suite 1500
	Houston, Texas 77002

	 	Houston, Texas 77002
	Telephone: 713-328-1085

	 	Telephone: 713-328-1073
	Fax: 713-328-1097

	 	Fax: 713-328-1060
	Attn.: Robert Cabes

	 	Attn.: Gerry Morton

Any Party may send any notice, request, demand, claim, or other communication hereunder to the
intended recipient at the address set forth above using any other means (including personal
delivery, expedited courier, messenger service, facsimile, ordinary mail, or electronic mail), but
no such notice, request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.

          10.3 Expenses. Each Party shall pay its own legal fees and other costs and expenses
incurred by it in connection with the negotiation, execution and delivery of this Agreement and the
Operating Agreement.

          10.4 Transfer Taxes. All Transfer Taxes payable with respect to the Properties shall
be considered a joint interest expense and allocated in accordance with the Operating Agreement.

          10.5 Captions. The captions in this Agreement are for convenience only and shall not
be considered a part of or affect the construction or interpretation of any provision of this
Agreement.

          10.6 Waivers. Any failure by any Party to comply with any of its obligations,
agreements, or conditions herein contained may only be waived in writing in an instrument
specifically identified as a waiver and signed by the Party to whom such compliance is owed.

23

 

No waiver of, or consent to a change in, any provision of this Agreement shall be deemed or
shall constitute a waiver of, or consent to a change in, any other provisions hereof, nor shall
such waiver constitute a continuing waiver unless expressly provided in the waiver.

          10.7 Assignment. Except for assignments for the benefit of lenders in connection with
commercial financing activities (in which case the assigning Party shall not be relieved of its
obligations hereunder) and as provided in ARTICLE 4, no Party may assign all or any part of its
rights and obligations under this Agreement without the prior written approval of each other Party.
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective
permitted successors and assigns.

          10.8 Amendment. This Agreement may be amended or modified only by an agreement in
writing executed by all Parties expressly identifying it as an amendment or modification hereof.

          10.9 No Third Person Beneficiaries. Nothing in this Agreement shall entitle any
Person other than the Parties to any claim, cause of action, remedy, or right of any kind.

          10.10 Entire Agreement. This Agreement and the Operating Agreement constitute the
entire agreement between the Parties pertaining to the subject matter hereof and supersede all
prior agreements, understandings, negotiations, and discussions, whether oral or written, of the
Parties with respect thereto.

          10.11 Term. This Agreement is effective as of the Effective Date and shall continue
in effect until the Operating Agreement terminates, at which time this Agreement shall terminate
except as to rights and obligations previously accrued.

          10.12 Survival. Articles 8 and 9 and Sections 10.2, 10.3, 10.12 and 10.13 shall
survive the termination of this Agreement.

          10.13 References and Construction. In this Agreement:

          (a) References to any gender includes a reference to all other genders;

          (b) References to the singular includes the plural, and vice versa;

          (c) Reference to any Article or Section means an Article or Section of this Agreement;

          (d) Reference to any Exhibit means an Exhibit to this Agreement, all of which are
incorporated into and made a part of this Agreement;

          (e) Unless expressly provided to the contrary, “hereunder”, “hereof”, “herein”, and
words of similar import are references to this Agreement as a whole and not any particular
Section or other provision of this Agreement;

24

 

          (f) “Include” and “including” shall mean include or including without limiting the
generality of the description preceding such term and are used in an illustrative sense and
not a limiting sense;

          (g) “Or” is not exclusive unless the context requires otherwise;

          (h) No consideration shall be given to the fact or presumption that one party had a
greater or lesser hand in drafting this Agreement; and

          (i) Capitalized terms used in this Agreement that are not otherwise defined are used
with the respective meanings given thereto in the Operating Agreement.

          10.14 Amendment and Restatement of Original Participation Agreement. This Agreement
amends and restates the Original Participation Agreement effective as of the Effective Date. For
the avoidance of doubt, upon giving effect to such amendment and restatement, this Agreement shall
be the “Marcellus JV Participation Agreement” referred to in (x) the Credit Agreement dated as of
May 25, 2006 (as administrative agent, as amended, supplemented or otherwise modified from time to
time, the “Carrizo Credit Agreement”) among COGI, certain subsidiaries of COGI (including
Carrizo), the lenders party thereto and Wells Fargo Bank, N.A., and (y) the Loan Documents (as
defined in the Carrizo Credit Agreement) executed in connection with the Carrizo Credit Agreement.

[Signature Page Follows]

25

 

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the Execution
Date and effective as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 

	ACP II MARCELLUS LLC	 	 	 	CARRIZO OIL & GAS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	ACP II AMS LP, its Manager
	 	 	 	By:	 	/s/ S.P. Johnson, IV 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	S.P. Johnson, IV	 	 
	By:

	 	Avista Capital Partners II, L.P.,
its General Partner
	 	 	 	 	 	President and Chief
Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	Avista Capital Partners II

GP, LLC its General Partner	 	 	 	CARRIZO (MARCELLUS) WV LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Robert L. Cabes, Jr. 	 	 	 	By:	 	/s/ S.P. Johnson, IV 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Robert L. Cabes, Jr.

Partner
	 	 	 	 	 	S.P. Johnson, IV 

President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	AVISTA CAPITAL PARTNERS II, L.P.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	Avista Capital Partners II GP, LLC,

its General Partner	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Robert L. Cabes, Jr. 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Robert L. Cabes, Jr.

Partner	 	 	 	 	 	 	 	 

[Signature Page to the Amended and Restated Participation Agreement]

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