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Exhibit 9
TAGALONG AGREEMENT
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This Agreement is made and entered into as of July 21, 1997, among
Joint Energy Development Investments Limited Partnership ("Purchaser"), Pengo
Securities Corp., a Delaware corporation ("Pengo").
Whereas, Purchaser has agreed to purchase 100,000 shares of Series C
Cumulative Convertible Preferred Stock of Inland Resources Inc. ("Inland"),
which is convertible into shares of common stock of Inland ("Common Stock"),
pursuant to a Securities Purchase Agreement dated as of July 21, 1997 between
Inland and Purchaser (the "Securities Purchase Agreement").
Whereas, as of the date hereof, Pengo owns 2,250,401 shares of Common
Stock before giving effect to the conversion of Series B Preferred Stock into
Common Stock, which conversion will occur concurrently with the issuance of the
Series C Cumulative Convertible Preferred Stock into Common Stock, and
Whereas, in order to induce Purchaser to enter into the Securities
Purchase Agreement, Pengo agreed to entered into this Agreement.
Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each of the parties to this
Agreement, Purchaser and Pengo hereby agree as follows:
SECTION 1. TAGALONG. (a) If Pengo or any affiliate of Pengo (a
"Transferor") sells, other than in an offering pursuant to a registration
statement or pursuant to Rule 144 under the Securities Act of 1933, any shares
of Common Stock owned by the Transferor to any individual or entity (a
"Transferee") in one transaction or a Series of related transactions which
constitute a majority of the shares of Common Stock owned by Pengo and its
affiliates (collectively, the "Xxxxx Group"), Purchaser shall have the right to
sell to the Transferee, on the same terms and conditions as provided with
respect to the sale by the Transferor to such Transferee the number of shares of
Common Stock (rounded to the newest whole share) equal to the product of (i) the
total number of shares of Common Stock which Purchaser then owns that were
acquired upon conversion of the Series C Cumulative Convertible Preferred Stock
and the number of shares Purchaser may acquire upon conversion of the Series C
Cumulative Convertible Preferred Stock Purchaser then owns and (ii) a fraction
with a numerator equal to the number of shares of Common Stock then being sold
by the Transferor and a denominator equal to the total number of shares of
Common Stock owned by the Transferor and the other members of the Xxxxx Group.
The right of the Transferor to sell shall be subject to the condition that the
Transferor shall cause the Transferee that proposes to purchase the shares of
the Transferor to offer to purchase, on such terms (including closing date),
such number
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of shares from Purchaser; provided, however, that if the Transferee is for any
reason unwilling or unable to purchase the aggregate number of shares from the
Transferor and Purchaser contemplated by the foregoing, the number of shares to
be sold by each shall be reduced to such number as, when taken with the numbers
of shares to be sold by each other such party, shall be equal to the number of
shares which such Transferee is willing or able to purchase and shall comply
with the first sentence of this Section 1 (a). Purchaser may only sell shares of
Common Stock hereunder that it has acquired upon conversion of Series C
Cumulative Convertible Preferred Stock.
(b) The Transferor shall give written notice to Purchaser at least 3
business days prior to any proposed sale of Common Stock subject to this
Agreement. The notice shall specify the proposed Transferee, the number of
shares of Common Stock to be sold, the amount and type of consideration to be
received therefor, and the place and date on which the sale is to be
consummated. If Purchaser desires to include shares of Common Stock in such sale
pursuant to Section 1(a), Purchaser shall notify the Transferor not more than 2
business days after its receipt of the notice from Transferor.
(c) If Pengo proposes to transfer, or an affiliate of Pengo proposes to
transfer, to a Transferee, whether by merger, consolidation, sale or otherwise,
all or substantially all the outstanding equity securities or assets of Pengo or
such affiliate, then Pengo or such affiliate shall, as a condition to the
exercise of such right of transfer, cause such Transferee to agree to be bound
by the provisions hereof.
(d) Pengo agrees that if any shares of Common Stock owned by it are
transferred to one of its affiliates, it will obtain the agreement of such
affiliate to be bound by the provisions hereof.
(e) If Pengo or any affiliate of Pengo should distribute Common Stock
in kind, as a dividend, a distribution in full or partial liquidation or
otherwise without consideration, Pengo or such affiliate will require, as a
condition to effectuation of such distribution, that each recipient thereof
shall agree to be bound by the provisions of Section 1 of this Agreement as
fully as Pengo and any such affiliate, and, in that regard and for purposes only
of interpretation of such Section 1, each such recipient shall be deemed to be
an affiliate of Pengo.
SECTION 2. MISCELLANEOUS. (a) Except to the extent otherwise provided
herein, the provisions of this Agreement shall be binding upon and accrue to the
benefit of the parses hereto and their respective heirs, legal representatives,
successors and assigns. If Purchaser transfers all the Common Stock it then owns
to any person or entity other than in a public distribution, such transferee
shall be deemed thereafter to be the Purchaser for purposes of this Agreement.
(b) The provisions of this Agreement may not be amended, modified or
supplemented without the written agreement of Purchaser and Pengo.
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(c) This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
Constitute one and the same agreement.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas applicable to contacts made and to be
performed wholly within that State.
(e) In the event that any one or more of the provisions contained
herein, or application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect, any reason, the validity, legality and
enforceability of any such provision in every other respect of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the full extent permitted by law.
(f) For purposes of this Agreement, "affiliate" shall have the meaning
given such term in Rule 405 under the Securities Act of 1933, as amended.
(g) This Agreement shall terminate on the earlier of (i) July 21, 2001
and (ii) first date that the Xxxxx Group's fully diluted ownership of Common
Stock is less than 25%.
(h) Pengo agrees that it will cause all of the other members of the
Xxxxx Group including Xxxxxxx X. Xxxxx, to abide by the terms of this Agreement.
(i) Pengo agrees that Purchaser shall have the piggyback registration
right set forth in the Registration Rights Agreement referred to in the
Securities Purchase Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed this Tagalong
Agreement as of the date first written above.
JOINT ENERGY DEVELOPMENT
INVESTMENTS LIMITED PARTNERSHIP
By: Enron Capital Management Limited
Partnership, its General Partner
By: Enron Capital Corp., its General
Partner
By: /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
Title: President
PENCO SECURITIES CORP.
By: /s/ Xxxxx X. Xxxxxxx
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