EXHIBIT II
TCW AGREEMENT
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement") is made and entered into as
of June __, 1997 between Forcenergy Inc, a Delaware corporation
("Forcenergy"), and each of the undersigned stockholders (individually a
"Stockholder" and collectively the "Stockholders") of Edisto Resources
Corporation, a Delaware corporation ("Edisto") or of Convest Energy
Corporation, a Texas corporation ("Convest").
RECITALS
A. Concurrently with the execution of this Agreement, Forcenergy, EDI
Acquisition Corporation, a Delaware corporation and wholly owned subsidiary
of Forcenergy ("EDI"), COV Acquisition Corporation, a Texas corporation and
wholly owned subsidiary of Forcenergy ("COV"), Edisto and Convest have
entered into an Agreement and Plan of Merger, a copy of which is attached as
Exhibit A hereto (the "Merger Agreement"), which provides for the mergers
(the "Mergers") of EDI with and into Edisto and Convest with and into COV.
Pursuant to the Merger Agreement, upon consummation of the Mergers all
outstanding capital stock of Edisto and of Convest will be converted into the
right to receive cash and stock of Forcenergy and stock of Forcenergy,
respectively.
B. Each Stockholder owns the number of the shares of the outstanding
Common Stock, $.01 par value per share of Edisto or Convest as is indicated
on Schedule I of this Agreement (collectively, the "Shares").
C. The agreements of the Stockholders contained herein are in
consideration of the execution of the Merger Agreement by Forcenergy.
D. The directors and officers of Edisto and Convest have approved the
Mergers and believe the Mergers are in the best interest of such companies
and their stockholders.
NOW, THEREFORE, in consideration of the foregoing and subject to the
terms and conditions of the Merger Agreement the parties agree as follows:
1. AGREEMENT TO RETAIN SHARES.
1.1 TRANSFER AND ENCUMBRANCE. Stockholders agree not to transfer,
sell, exchange, pledge or otherwise dispose of or encumber the Shares or any
New Shares (as hereinafter defined) or to make any offer or agreement
relating thereto, at any time prior to the Expiration Date. As used herein,
the term "Expiration Date" shall mean the earlier to occur of (i) such date
and time as each of the Mergers shall have become effective in accordance
with the terms and provisions of the Merger Agreement (the "Effective Time"),
(ii) the termination of the Merger Agreement in
accordance with Section 10(a)(i)(A), 10(a)(i)(B), 10(a)(i)(C), 10(a)(i)(F) or
10(a)(ii)(B) thereof or (iii) a termination of the Merger Agreement in
accordance with Section 10(a)(i)(D), 10(a)(i)(E) or 10(a)(ii)(D) thereof and
in which Edisto's Board of Directors determines in good faith and after
consultation with an independent financial advisor that such Superior
Proposal would result in the payment of consideration valued at a minimum of
$10.95 per share to the stockholders of Edisto in exchange for all
outstanding shares of Edisto common stock.
1.2 NEW SHARES. Stockholders agree that any shares of capital
stock of Edisto or Convest that Stockholders purchase or with respect to
which Stockholders otherwise acquire beneficial ownership after the date of
this Agreement and prior to the Expiration Date ("New Shares") shall be
subject to the terms and conditions of this Agreement to the same extent as
if they constituted Shares.
2. AGREEMENT TO VOTE SHARES. Unless the Merger Agreement is terminated
pursuant to the provisions of Section 10(a)(i)(A), 10(a)(i)(B), 10(a)(i)(C),
10(a)(i)(F) or 10(a)(ii)(B) thereof or the conditions of Section 1.1(iii)
hereof are met at every meeting of the stockholders of Edisto or Convest held
prior to the Effective Time called with respect to any of the following, and
at every adjournment thereof, and on every action or approval by written
consent of the stockholders of Edisto or Convest with respect to any of the
following, Stockholders shall vote the Shares and any New Shares; (i) in
favor of approval of the Merger Agreement and the Mergers and any matter that
could reasonably be expected to facilitate the Mergers; and (ii) against
approval of any proposal made in opposition to the consummation of the
Mergers and the Merger Agreement, against any merger, consolidation, sale of
assets, reorganization or recapitalization with any party other than
Forcenergy and its affiliates and against any liquidation or winding up of
Edisto or Convest (each of the foregoing is referred to as an "Opposing
Proposal"). Stockholders agree not, directly or indirectly, to solicit or
encourage any offer from any party concerning the possible disposition of all
or any substantial portion of Edisto's or Convest's business assets or a
controlling equity interest in Edisto or Convest.
3. ADDITIONAL AGREEMENTS.
3.1 The Stockholders hereby consent to the release by the inclusion
in any press release relating to the Mergers of the following language:
Investment funds and accounts managed by TCW Special Credits and
Oaktree Capital Management, LLC, which hold slightly in excess of
51 percent of Edisto's common stock, have agreed to support the
proposed Mergers by their willingness to vote for the transaction.
In addition, such parties have contractually agreed not to sell
80% of the stock of Forcenergy received in the transaction for a
period of six months from the consummation of the transaction.
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3.2 The Stockholder acknowledges that the terms of this Agreement
will be required to be described, and this Agreement will be required to be
filed, in certain securities law filings relating to the Mergers.
3.3 To the extent inconsistent with the provisions of this
Agreement, the Stockholder hereby revokes any and all proxies with respect to
the Shares or any other voting securities of Edisto or Convest.
3.4 Stockholder agrees not to transfer, sell, exchange, pledge or
otherwise dispose of or encumber any shares of common stock, par value $.01
per share, of Forcenergy received pursuant to the Mergers (the "Stock") or to
make any offer or agreement relating thereto, at any time prior to 180 days
from the date that both of the Mergers shall have become effective in
accordance with the terms and provisions of the Merger Agreement; provided,
however, that notwithstanding the foregoing, Stockholder may transfer, sell,
exchange, pledge or otherwise dispose of or encumber up to 20% of the total
number of shares of Stock.
Notwithstanding anything to the contrary set forth herein, this
Agreement shall not restrict any representative, employee or agent of the
Stockholder from acting in accordance with such person's fiduciary duties as
a director of Edisto.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF STOCKHOLDER. Each
Stockholder represents, warrants and covenants as to itself to Forcenergy as
of the date hereof and the Closing Date of the Mergers as follows:
4.1 OWNERSHIP OF SHARES. Each Stockholder: (i) is the beneficial
owner of the Shares set forth on Schedule 1 hereto, which at the date of this
Agreement and at all times up until the Expiration Date will be free and
clear of any liens, claims, options, charges or other encumbrances; (ii) does
not beneficially own any shares of capital stock of Edisto or Convest other
than the Shares (excluding shares as to which Stockholder currently
disclaims beneficial ownership in accordance with applicable law); and (iii)
has full power and authority to make, enter into and carry out the terms of
this Agreement. TCW Special Credits and Oaktree Capital Management, LLC have
full power and authority to execute this Agreement on behalf of and to bind
each of the Stockholders to the terms of this Agreement.
4.2 NO PROXY SOLICITATIONS. Unless the Merger Agreement is
terminated pursuant to the provisions of Section 10(a)(i)(A), 10(a)(i)(B),
10(a)(i)(C), 10(a)(i)(F) or 10(a)(ii)(B) thereof or the conditions of Section
1.1(iii) hereof are met, Stockholders will not, and will not permit any
entity under Stockholders' control, to: (i) solicit proxies or take part in a
solicitation of proxies with respect to an Opposing Proposal or otherwise
encourage or assist any party in taking or planning any action that would
compete with, restrain or otherwise serve to interfere with or inhibit the
timely consummation of the Mergers in accordance with the terms of the Merger
Agreement; (ii) initiate a stockholders' vote or action by written consent of
Edisto or Convest stockholders with respect to an Opposing Proposal; or (iii)
enter into any agreement with any third party substantially similar to
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this Agreement with respect to any voting securities of Edisto or Convest
with respect to an Opposing Proposal.
4.3 NO CLAIMS. Stockholders do not have any claims, causes of
action, disputes, receivables, right of offset, lawsuits or any other claim
whatsoever, whether contingent or otherwise, against either Edisto or Convest
or any of their respective subsidiaries, officers, directors or employees.
5. REGISTRATION RIGHTS.
5.1 SHELF REGISTRATION. Within 120 days of the effective date of
the Mergers, Forcenergy shall file a "shelf" registration statement to
register under the Securities Act of 1933, as amended (the"Securities Act")
the sale from time to time of the shares of Stock and use reasonable efforts
to obtain the effectiveness of such registration statement within 180 days of
the effective date of the Mergers; PROVIDED, HOWEVER, that Forcenergy may
defer its obligations under this Section 5.1 for a period of no more than 30
days if Forcenergy would be required to prepare financial statements other
than those it customarily prepares or Forcenergy determines in its reasonable
judgment that the registration and offering would have a material adverse
effect on any material financing, acquisition, corporate reorganization or
other material corporate transaction or development involving Forcenergy that
is pending at the time and promptly gives Stockholder notice of that
determination (it being understood, however, that, in any such event,
Forcenergy shall use all reasonable efforts to minimize the length of the
postponement). The provisions of this Section 5.1 are subject to the
provisions of Section 5.4.
In the event of the issuance of any stop order suspending the
effectiveness of any registration statement or of any order suspending or
preventing the use of any prospectus or suspending the qualification of such
shares of Stock for sale in any jurisdiction, Forcenergy shall use its
reasonable efforts promptly to obtain its withdrawal.
5.2 PIGGYBACK REGISTRATION RIGHTS. Subject to the provisions of
Section 5.4, if Forcenergy at any time proposes to register any of its common
stock under the securities Act (other than registrations on Forms S-4 or S-8
or any successor forms thereof or registrations of securities in connection
with a Rule 145 transaction), whether of its own accord or at the request of
any holder or holders of its securities, it shall at such time promptly after
the receipt of a request from holder(s) of its securities or its own decision
to initiate a registration (but no later than ten business days) give written
notice to the Stockholder of its intention to do so.
Upon the written request of the Stockholders delivered to Forcenergy
within ten business days after receipt of any such notice, Forcenergy shall
use reasonable efforts (subject to the provisions of this Section 5.2) to cause
all shares of Stock, which Stockholders shall have so requested registration
thereof, to be registered under the Securities Act, all to the extent
requisite to permit the sale or other disposition by the Stockholder of such
shares of Stock; PROVIDED, HOWEVER, Forcenergy may elect not to file a
registration statement pursuant to this Section 5.2 or may
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withdraw any registration statement filed pursuant to this Section 5.2 at any
time prior to the effective date hereof.
If the managing underwriter for the offering advises that marketing
factors require the inclusion in such registration of some or all of the
shares of Stock sought to be registered by the Stockholders to be limited or
that the number of securities to be registered at the insistence of
Forcenergy and any other selling shareholders plus the number of shares of
Stock sought to be registered by the Stockholders should be limited due to
marketing factors, the number of shares of Stock sought to be registered by
the Stockholders and such other selling shareholders shall be reduced pro
rata, based on the number of securities sought to be registered by each
Stockholder, Forcenergy or such other selling shareholder, to the number
recommended by the managing underwriter.
In connection with any offering involving an underwriting of shares
being issued by Forcenergy, Forcenergy shall not be required to include any of
the shares of Stock in such underwriting pursuant to Section 5.2 unless the
Stockholder accepts the terms of the underwriting as agreed upon between
Forcenergy and the underwriters.
The shares of Stock proposed to be registered under any registration
statement under Section 5.2 hereof shall be offered for sale at the same
public offering price as the shares of common stock of Forcenergy offered for
sale by Forcenergy or any other selling shareholder covered thereby.
5.3 EXPENSES OF REGISTRATION. All expenses incurred in connection
with the registrations of shares of Stock pursuant to this Article 5,
including without limitation (i) all state registration and qualification
fees, (ii) all printing, engineering and accounting fees, (iii) one half of
the Securities and Exchange Commission registration fee, the fee payable to
the National Association of Securities Dealers, Inc. and (iv) all fees and
disbursements of counsel for Forcenergy, shall be borne by Forcenergy;
PROVIDED, HOWEVER, that Forcenergy shall not be required to pay, and the
Stockholder shall pay, any underwriter discounts, commissions, and other
underwriter compensation, to the extent such fees, discounts, commissions
and compensation relate to the shares of Stock.
5.4 TERMINATION. Forcenergy shall not be required to maintain the
effectiveness of the registration statement contemplated by Section 5.1
following the expiration of one year from the effective date of the Mergers
and may de-register any shares of Stock covered by such registration
statement after such time. In addition, Forcenergy shall not be obligated to
take any action to effect any registration, qualification or compliance
pursuant to Section 5.2, and the provisions contained in Section 5.2 shall
terminate and be of no force and effect, following the expiration of one year
from the effective date of the Mergers.
6. TERMINATION. Other than with respect to the provisions of Section
3.1, 3.2 and 3.4 and the provisions of Article 5, which provisions shall
survive any termination of this Agreement, this Agreement shall terminate and
shall have no further force or effect as of the Expiration Date.
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7. MISCELLANEOUS.
7.1 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, then the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
7.2 BINDING EFFECT AND ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor
any of the rights, interests or obligations of the parties hereto may be
assigned by either of the parties without the prior written consent of the
other, except the rights under Article 5 may be assigned if Stockholder sells
all of its Shares in a private transaction which complies with the terms of
this Agreement.
7.3 AMENDMENTS AND MODIFICATION. This Agreement may not be
modified, amended, altered or supplemented except by the execution and
delivery of a written agreement executed by the parties hereto.
7.4 SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF. The parties
acknowledge that Forcenergy will be irreparably harmed and that there will be
no adequate remedy at law for a violation of any of the covenants or
agreements of Stockholder set forth herein. Therefore, it is agreed that, in
addition to any other remedies that may be available to Forcenergy upon any
such violation, Forcenergy shall have the right to enforce such covenants
and agreements by specific performance, injunctive relief or by any other
means available to Forcenergy at law or in equity.
7.5 NOTICES. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed to have been duly given on the date of
delivery if delivered by hand delivery or by facsimile to the persons
identified below or two days after mailing by air courier addressed as
follows:
If to Forcenergy:
Forcenergy Inc
0000 XX 0xx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxx Xxxxxxxxxxx
Telecopy: (000)000-0000
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With a copy to:
Xxxxxxx & Xxxxx L.L.P.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
If to Stockholder:
To the address for notice set forth on the last page hereof.
With copies to:
Edisto Resources Corporation
Convest Energy Corporation
0000 Xxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. XxXxxxxx
Telecopy: (000) 000-0000
and
Xxxxx & Xxxxx, X.X.
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxx
Telecopy:(000) 000-0000
Such addresses may be changed from time to time by means of a notice
given in the manner provided in this section.
7.6 GOVERNING LAW. This Agreement shall be governed by, construed
and enforced in accordance with the internal laws of the State of Delaware.
7.7 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties in respect of the subject matter hereof, and
supersedes all prior negotiations and understandings between the parties with
respect to such subject matter.
7.8 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
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7.9 EFFECT OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction or interpretation of
this Agreement.
7.10 ATTORNEYS' FEES. In the event of any legal actions or
proceeding to enforce or interpret the provisions hereof, the prevailing
party shall be entitled to reasonable attorneys' fees, whether or not the
proceeding results in a final judgment.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
FORCENERGY INC EACH FUND AND ACCOUNT SET FORTH
ON SCHEDULE 1 HERETO
By: TCW Special Credits, as general partner
By: or investment manager of the funds and
-------------------------- accounts set forth on Schedule 1
Name:
Title:
By: TCW Asset Management Company,
its managing general partner
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Signatory
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
Affiliate's Address for Notice:
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxx
Fax No. (000) 000-0000
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EACH FUND AND ACCOUNT SET FORTH
ON SCHEDULE 2 HERETO
By: Oaktree Capital Management, LLC. as
general partner or investment manager
of the funds and accounts set forth on
Schedule 2
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Signatory
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Principal
Affiliate's Address for Notice:
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxx
Fax No. (000) 000-0000
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SCHEDULE 1
SHARES OF
FUNDS AND ACCOUNTS EDISTO COMMON STOCK
------------------ -------------------
The Board of Trustees of the Delaware State Employees
Retirement Fund, separate account 222,661
TCW Special Credits Fund III 2,019,176
TCW Special Credits Fund IIIb 1,667,991
The Common Fund for Bond Investments, separate account 112,176
Weyerhaeuser Company Master Retirement Trust,
separate account 991,550
TCW Special Credits Trust 889,520
TCW Special Credits Trust IIIb 1,191,100
---------
7,094,174
SCHEDULE 1
SHARES OF
FUNDS AND ACCOUNTS EDISTO COMMON STOCK
------------------ -------------------
OCM High Yield Trust 71,970
OCM High Yield Limited Partnership 38,100
Master Pension Trust of Pacific Telesis Group,
separate account 100,902
Xxxxxx Aircraft Company Master Retirement Trust,
separate account 11,500
San Diego County Employees Retirement Association,
separate account 5,630
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228,102
