VAALCO ENERGY, INC.
0000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 000000
April 21, 1998
The 1818 Fund II, L.P.
c/o Brown Brothers Xxxxxxxx & Co.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxx
X. Xxxxxxx Xxxxxxxxx
c/o Vaalco Energy, Inc.
0000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Gentlemen:
Reference is made to (i) the Stock Acquisition Agreement and Plan of
Reorganization, dated as of February 17, 1998 and amended as of April 21, 1998
(the "Stock Acquisition Agreement"), among Vaalco Energy, Inc., a Delaware
corporation ("Vaalco"), The 1818 Fund II, L.P., a Delaware limited partnership
(the "Fund"), and 1818 Oil Corp., a Delaware corporation ("1818 Oil"), and (ii)
the Private Placement Memorandum dated April 15, 1998 of Vaalco (the "PPM").
Vaalco hereby agrees that it shall, as soon as practicable after the
date hereof, take all action necessary to amend the Certificate of Incorporation
of Vaalco (including, without limitation, causing a special meeting of the
stockholders of Vaalco to be called or circulating a written consent and mailing
an information statement to stockholders in connection with any stockholder
action taken by written consent) so that Vaalco will have reserved and available
for issuance such number of authorized but unissued shares of Common Stock, par
value $.10 per share (the "Common Stock"), of Vaalco as would be sufficient to
permit the conversion of all outstanding (i) shares of Preferred Stock, par
value $25.00 per share (the "Preferred Stock"), of Vaalco and (ii) options,
warrants or similar rights with respect to shares of Common Stock (collectively,
the "Options"), and each of the undersigned agrees to vote all of their shares
of Common Stock and Preferred Stock in favor of such amendment.
Notwithstanding anything to the contrary contained in the Certificate
of Designation of the Preferred Stock or in any plan or agreement pursuant to
which any Options were issued (collectively, the "Option Agreements'), each of
the undersigned
2
hereby understands and agrees that, upon the consummation of the transactions
contemplated by the Stock Acquisition Agreement and the PPM, Vaalco will not
have reserved and available for issuance such number of authorized but unissued
shares of Common Stock as would be sufficient to permit the conversion of all
outstanding Options and shares of Preferred Stock and each of the undersigned
hereby waives any breach by Vaalco of the terms of the Preferred Stock or any
Option Agreement in connection therewith.
In furtherance of the foregoing, each person listed below agrees not to
convert the number of Options or shares of Preferred Stock set forth opposite
their name until such time as Vaalco has reserved and available for issuance
such number of authorized but unissued shares of Common Stock as would be
sufficient to permit the conversion of all outstanding Options and shares of
Preferred Stock:
Shares of
Preferred Stock Options
--------------- -------
The 1818 Fund II, L.P. 364
Xxxxxx X. Xxxxx 500,000
X. Xxxxxxx Xxxxxxxxx 500,000
Vaalco shall notify each of the undersigned at such time as Vaalco has
reserved and available for issuance such number of authorized but unissued
shares of Common Stock as would be sufficient to permit the conversion of all
outstanding Options and shares of Preferred Stock.
3
This letter agreement may be executed in counterparts, each of which
will be deemed an original but all of which together will constitute one and the
same instrument.
VAALCO ENERGY, INC.
By:/s/ Xxxxxx X. Xxxxx XXX
-----------------------
Name: Xxxxxx X. Xxxxx XXX
Title: Chief Executive Officer
Accepted and Agreed to,
as of this 21 day of April, 1998
THE 1818 FUND II, L.P.
By: Brown Brothers Xxxxxxxx & Co.,
its general partner
By:/s/ X. Xxxxxxx Xxxx
-------------------
Name: X. Xxxxxxx Xxxx
Title: Partner
/s/ Xxxxxx X. Xxxxx XXX
-----------------------
Xxxxxx X. Xxxxx XXX
/s/ X. Xxxxxxx Xxxxxxxxx
------------------------
X. Xxxxxxx Xxxxxxxxx
