1
EXHIBIT 99(a)
FOUNTAIN SHAREHOLDER AGREEMENT
This Shareholder Agreement (this "Agreement") dated as of January 31,
1998 is made by and among Fountain Oil Incorporated, a Delaware corporation (the
"Company"), the undersigned Shareholders (the "Shareholders") of the Company,
and CanArgo Energy Inc., an Alberta corporation ( "CanArgo").
WHEREAS the Shareholders are the record and beneficial owners and have
the power to vote the respective number of shares of the Company's common stock
set forth opposite their respective names in Schedule "A" hereto (collectively,
the "Shares");
WHEREAS the Shareholders desire that the Company and CanArgo enter into
a Combination Agreement (the "Combination Agreement") with respect to the
acquisition by the Company of all voting stock of CanArgo (the "Combination");
and
WHEREAS in addition to obligating themselves to each other, the
Shareholders are executing this Agreement as an inducement to CanArgo to enter
into and execute the Combination Agreement,
NOW THEREFORE in consideration of the execution and delivery by CanArgo
of the Combination Agreement and the mutual covenants, conditions and agreements
contained herein and therein, the Company, the Shareholders and CanArgo agree as
follows:
1. At any meeting of Company's Shareholders held prior to the
termination of the Combination Agreement and called to vote upon the
Combination, the Combination Agreement or any of the transactions contemplated
in the Combination Agreement, at any adjournment thereof or in any other
circumstances upon which such vote or other approval of the Combination, the
Combination Agreement or any of the transactions contemplated in the Combination
Agreement is sought, the Shareholders severally shall vote (or cause to be
voted) the Shares set forth opposite their respective names in Schedule "A"
hereto in favour of the Combination, the Combination Agreement and such
transactions.
2. During the period commencing on the date of this Agreement and ending
on the earlier of either (a) the date that the Combination Agreement terminates
in accordance with its terms or (b) the Effective Date (as such term is defined
in the Combination Agreement), each Shareholder shall not transfer (which term
shall include, without limitation, for the purposes of this Agreement any sale,
gift or pledge) any or all of such Shareholder's Shares or any interest therein,
except pursuant to the Combination, unless the transferee agrees with CanArgo to
be bound by this Agreement as if such transferee were a Shareholder and had
executed this Agreement. Subject to Section 8 hereof, during such period the
Shareholders shall not engage or cooperate in any discussion or negotiations
with any person or entity other than CanArgo, or make or solicit any offers,
with respect to the transfer of any or all of the Shares (except as permitted by
the preceding sentence) or the acquisition (by merger, tender offer or
otherwise) of the Company or all or substantially all of its stock, business or
assets.
3. Each of the Shareholders severally represents and warrants to CanArgo
that such Shareholder is the beneficial and record owner of, and has power and
authority to dispose of, and the unrestricted right to vote, the number of
Shares set forth opposite such Shareholder's name in Schedule "A" hereto.
4. The Shareholders hereby agree to provide each of the undertakings
contemplated by the Combination Agreement to be undertaken by "affiliates" of
the Company.
5. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly received if so given) by delivery, by cable, telecopier, telegram or
telex, or by registered or certified mail, postage prepaid, return receipt
requested, to the respective parties as follows:
2
If to the Shareholders or any of them the address or addresses, as
appropriate, as set forth on Schedule "A" hereto.
If to the Company:
Fountain Oil Incorporated
Skysstasjon 00X (0xx xxxxx)
0000 Xxxxx, Xxxxxx
Attention: Xxxx X. Trulsvik, President
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to CanArgo:
CanArgo Energy Inc.
1580, 000 0xx Xxxxxx X. X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx X. Xxxxxxx, Esq., Chief Financial Officer
With a copy to:
Lang Xxxxxxxx
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxxx Xxxxxx, Esq.
or to such other address as any of the foregoing parties may have furnished to
the others in writing in accordance herewith, except that notices of change of
address shall only be effective upon receipt.
6. Each of the Shareholders agrees that this Agreement and the
obligations hereunder shall attach to the Shares and shall be binding upon any
person or entity to whom legal or beneficial ownership of the Shares shall pass,
whether by operation of law or otherwise, including without limitation their
respective heirs, guardian, administrator or successor. In the event of any
stock split, stock dividend, merger, reorganization, recapitalization,
conversion or other change in the capital structure of the Company affecting the
common shares of the Company or acquisition of additional common shares by any
of the Shareholders, the number of Shares listed in Schedule "A" beside the name
of each Shareholder shall be adjusted appropriately and this Agreement and the
obligations hereunder shall attach to any additional common shares or other
securities issued to or acquired by the Shareholders.
7. The Company and the Shareholders hereby agree that each of the
Shareholders will tender to the Company any and all certificates representing
the Shares and the Company will inscribe upon those certificates the following
legend: "The shares of common stock of Fountain Oil Incorporated represented by
this certificate are
-2-
3
subject to a Shareholder Agreement dated as of January 31, 1998. Copies of such
Shareholder Agreement may be obtained at the principal executive offices of
Fountain Oil Incorporated."
8. No Shareholder executing this Agreement who is or becomes during the
term hereof a director of the Company makes any agreement or understanding
herein in his or her capacity as such director and specifically reserves all
rights to act as a director in conformity with his or her fiduciary duties in
connection therewith. The Shareholders sign solely in their capacities as owners
or holders of the power to vote common shares.
9. Each of the provisions of this Agreement is subject to compliance
with applicable regulatory conditions.
10. This Agreement may be executed in two or more counterparts, each of
which shall be considered an original but all of which together shall constitute
the same instrument.
11. This Agreement is intended as an exclusive statement of the terms of
the agreement among the parties with respect to its subject matter, supersedes
all prior agreements with respect thereto, cannot be changed or terminated by
the parties hereto, except by written instrument executed by the party or
parties against whom enforcement thereof is sought, and shall be governed by and
construed in accordance with the substantive laws of the State of Delaware
without giving effect to the principles of conflicts of law thereof. This
Agreement, and all obligations of the Shareholders hereunder, shall terminate
upon the determination by the Board of Directors of the Company (i) to withdraw
its recommendation to the shareholders of the Company that they approve the
Combination, the Combination Agreement and the transactions contemplated by the
Combination Agreement and (ii) to recommend to such shareholders that they
approve an Alternative Transaction (as defined in the Combination Agreement).
FOUNTAIN OIL INCORPORATED
By: /s/ Xxxx X. Trulsvik
-------------------------------
Name: Xxxx X. Trulsvik
Title: President and Chief Executive
Officer
CANARGO ENERGY INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
Title: Chairman
SHAREHOLDERS
/s/ Xxxxx X. Bandlien
-------------------------------
Xxxxx X. Bandlien
/s/ Xxxx X. Trulsvik
-------------------------------
Xxxx X. Trulsvik
-3-
4
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
/s/ Rune Xxxxxxx
-------------------------------
Rune Xxxxxxx
-------------------------------
-------------------------------
-4-
5
SCHEDULE "A"
SHAREHOLDERS
(NAME AND ADDRESS) SHARES OF COMMON STOCK
------------------ ----------------------
Xxxx X. Trulsvik 135,400
Xxxxx X. Bandlein 161,968
Xxxxxxx X. Xxxxxxx 100,793
Xxxxxx X. Xxxxxx 532,728
Xxxxxxx Xxxxxx 132,000
Xxxxxx X. Xxxxxx 12,000
Xxxxx X. Xxxxxxxx 203,161
Rune Xxxxxxx 21,000
-5-
