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EXHIBIT 4.9
MAY 1998 AGREEMENT
IN RESPECT OF
AGREEMENT OF LIMITED PARTNERSHIP
CLIFFWOOD ACQUISITION - 1996 LIMITED PARTNERSHIP
THIS MAY AGREEMENT IN RESPECT OF AGREEMENT OF LIMITED PARTNERSHIP is
made and entered into this 4th day of May, 1998, by and among Cliffwood Oil &
Gas Corp., a Texas corporation, EnCap Equity 1996 Limited Partnership, a Texas
limited partnership, and Energy Capital Investment Company PLC, an English
investment company.
RECITALS:
A. Cliffwood Energy Company, a California corporation ("CEG"),
and the Limited Partners have heretofore executed and delivered that certain
Agreement of Limited Partnership dated as of September 27, 1996, establishing
Cliffwood Acquisition - 1996 Limited Partnership the " PARTNERSHIP AGREEMENT").
B. CEG has heretofore assigned its interest as a general partner
in the Partnership to the General Partner and the General Partner has been
admitted to the Partnership as a substitute general partner in place of CEG.
C. The General Partner, on behalf of the Partnership, proposes to
execute and deliver that certain Acquisition and Distribution Agreement dated
as of even date herewith (the "A&D AGREEMENT"), by and between the Partnership,
Texoil, Inc. ("TEXOIL"), and the General Partner (in its separate corporate
capacity). Under the terms of the A&D Agreement, the Partnership would (x)
make an in-kind distribution to the General Partner of the General Partner's
interest in the Properties (which, for purposes hereof, shall constitute 10% of
the Partnership's interest in the Properties) and (y) sell to Texoil the
Partnership's entire interest in the Properties less the interest described in
clause (x) above (with the Partnership being directed by Texoil to transfer and
assign the interest described in this clause (y) to the General Partner).
D. The parties hereto desire to enter into this Agreement for the
purpose of (i) authorizing the execution and delivery by the General Partner of
the Purchase Agreement on behalf of the Partnership and authorizing the
consummation by the Partnership of the Transaction and (ii) setting forth
their agreement with respect to (x) the manner in which the cash and shares of
stock received by the Partnership under the A&D Agreement will be shared by the
parties and (iii) the conduct of the Partnership's affairs after the
consummation of the Transaction and (y) certain other matters affecting the
Partnership.
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AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual covenants and agreements contained herein and in the Partnership
Agreement, the parties hereto do hereby agree as follows:
SECTION 1. DEFINED TERMS, REFERENCES AND CONSTRUCTION.
(a) When used in this Agreement, the following terms shall have
the respective meanings assigned to them below in this subsection (a) or in the
sections, subsections or other subdivisions referred to below in this
subsection (a):
"A&D AGREEMENT" shall have the meaning assigned to it in
Paragraph B of the Recitals.
"AGREEMENT" shall mean this May 1998 Agreement in Respect of
Agreement of Limited Partnership.
"CASH PORTION" shall have the meaning assigned to it in the
A&D Agreement.
"CLOSING" shall have the meaning assigned to it in the A&D
Agreement.
"CONVEYANCING DOCUMENTS" shall mean (i) the Assignment and
Xxxx of Sale, substantially in the form attached to the A&D Agreement
in all material respects, and (ii) the other documents and instruments
to executed and delivered at the Closing in connection with the sale,
assignment and transfer of the Properties and related obligations,
substantially in the form previously furnished to the Limited Partners
and its counsel in all material respects.
"PARTNERSHIP AGREEMENT" shall have the meaning assigned to it
in Paragraph A of the Recitals.
"PURCHASE SHARES" shall have the meaning assigned to it in the
A&D Agreement.
"PURCHASED PORTION" shall have the meaning assigned to it in
the A&D Agreement.
"TEXOIL" shall have the meaning assigned to it in Paragraph B
of the Recitals.
"TRANSACTION" shall mean the transaction contemplated under
the A&D Agreement.
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(b) All other terms not otherwise defined herein shall have the
respective meanings assigned to them in the Partnership Agreement.
(c) All references in this Agreement to sections, subsections and
other subdivisions refer to corresponding sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any of such subdivisions are for convenience only
and shall not constitute part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. Words in the singular form
shall be construed to include the plural and vice versa, unless the context
otherwise requires. The word "includes" and its derivatives means "includes,
but is not limited to" and corresponding derivative expressions.
SECTION 2. AUTHORIZATION OF THE EXECUTION AND DELIVERY OF THE
A&D AGREEMENT; AUTHORIZATION OF THE CONSUMMATION OF THE TRANSACTION UNDER THE
A&D AGREEMENT.
(a) Notwithstanding Section 6.2(d) or anything else in the
Partnership Agreement to the contrary (and in reliance on the representation
and warranty of the General Partner set forth in Section 9(a)(vii)), the
Limited Partners hereby consent to and approve the execution and delivery of
the A&D Agreement by the General Partner on behalf of the Partnership.
(b) Subject to the terms hereof, the Limited Partners hereby
consent to and approve the consummation by the Partnership of the Transaction
and agree that the General Partner shall have the power and authority to cause
the Partnership to consummate the Transaction (including the power and
authority to execute and deliver the Conveyancing Documents).
(c) The Limited Partners agree to transfer and assign to Texoil
the instruments described in Section 9.14(c) of the A&D Agreement (provided
that Texoil performs its obligations under the A&D Agreement, including Section
9.13 thereof).
(d) Pursuant to Section 9.13 of the A&D Agreement, the General
Partner agrees that it will request that Texoil issue stock certificates
representing the Purchase Shares in the names of the Limited Partners, with
each Limited Partner receiving the number of Purchase Shares set forth opposite
its name in Section 3.
(e) Promptly after the Closing, the General Partner agrees to
provide the Limited Partners with a complete set of all the documents and other
instruments executed by the General Partner and Texoil at the Closing.
SECTION 3. ALLOCATIONS AND DISTRIBUTIONS ATTRIBUTABLE TO THE
PURCHASED PORTION. Notwithstanding anything in the Partnership Agreement to
the contrary (including Article IV thereof), (a) all revenues of the
Partnership relating to the Purchased Portion (including for this purpose the
Purchase Shares), as well as all related items of Partnership income, gain and
amount realized for Federal income tax purposes shall be allocated 100% to the
Limited
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Partners (and, as between the Limited Partners, in the percentages set forth in
Section 4.5 of the Partnership Agreement) and (b) immediately (i) after the
Closing, the Partnership will distribute solely to the Limited Partners the
Cash Portion, and (ii) after the issuance to the Partnership of the Purchase
Shares under the A&D Agreement, the Partnership will solely distribute to the
Limited Partners such Purchase Shares, as follows:
Limited Partner Cash Purchase Shares
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EnCap LP $3,348,750 673,500
Energy PLC $1,116,250 224,500
SECTION 4. CERTAIN RESTRICTIONS. Without limiting Section
6.2(d) or any other provision of the Partnership Agreement or this Agreement,
it is hereby agreed that the General Partner shall not do, perform or authorize
any of the following without the prior written consent of the Limited Partners:
(a) alter, supplement, modify or amend the A&D Agreement in any
material respect, waive any of the Partnership's rights or any of Texoil's or
the General Partner's duties and obligations thereunder in any material
respect, or make any material election, determination or agreement thereunder;
or
(b) alter, supplement, modify or amend any Conveyance Document in
any material respect, waive any of the Partnership's rights or any of Texoil's
or the General Partner's duties and obligations thereunder in any material
respect, or make any material election, determination or agreement thereunder.
SECTION 5. AGREEMENT REGARDING THE CONTINUED EXISTENCE OF THE
PARTNERSHIP.
(a) Notwithstanding Section 10.1(d) of the Partnership Agreement
or anything else therein or in the Act to the contrary, the parties hereto
agree that the Partnership shall not dissolve upon the consummation of the
Transaction and that the Partnership shall continue to exist and conduct
business.
(b) Without limiting subsection (a) above, the parties hereto
agree that immediately after the consummation of the Transaction, the parties
hereto shall execute and deliver an amended and restated agreement of limited
partnership to govern the Partnership in a form mutually acceptable to them,
which shall be conclusively evidenced by their execution and delivery thereof;
provided, that the terms and provisions of this Agreement shall not be
superseded by the execution and delivery by the parties of any such agreement.
SECTION 6. EFFECTIVENESS OF AGREEMENT; APPROVALS. This
Agreement shall be expressly conditioned upon and effective if, and only if,
the Transaction is consummated.
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SECTION 7. REPRESENTATIONS AND WARRANTIES.
(a) The General Partner represents and warrants to the Limited
Partners as follows:
(i) The General Partner is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Texas.
(ii) The General Partner has the requisite power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder.
(iii) The execution, delivery and performance by the
General Partner of this Agreement has been duly and validly authorized
by all requisite corporate action.
(iv) The execution, delivery and performance by the
General Partner of this Agreement is within its corporate powers and
will not (A) be in contravention of or violate any provisions of its
applicable charter or other governing documents, as amended to the
date hereof, or (B) be in contravention of or result in any breach or
constitute a default under any applicable law, rule, regulation,
judgment, license, permit or order or any loan, note or other
agreement or instrument to which the General Partner is a party or by
which it or any of its properties are bound.
(v) When delivered to the Limited Partners, this
Agreement will have been duly and validly executed and will be binding
upon the General Partner and enforceable in accordance with the terms
hereof, except as limited by bankruptcy, insolvency or similar law of
general application relating to the enforcement of creditors' rights.
(vi) No consent, approval, authorization or order of any
court or governmental agency or authority or of any third party which
has not been obtained is required in connection with the execution,
delivery and performance by the General Partner of this Agreement.
(vii) The General Partner has furnished the Limited
Partners with a true, correct and complete copy of the A&D Agreement
and related documents.
(viii) All Partnership debts and liabilities have been paid
in full or adequate provision has been made therefor.
(b) Each Limited Partner represents and warrants to the General
Partner as follows:
(i) It is duly organized and validly existing under the
laws of the jurisdiction of its formation.
(ii) It has all requisite power and authority to execute
and deliver this Agreement and to perform its obligations hereunder.
(iii) The execution, delivery and performance of this
Agreement are within its powers and do not (A) contravene or violate
any provisions of its charter or other
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governing documents, as amended to the date hereof, or (B) contravene
or result in any breach of or constitute a default under any
applicable law, rule or regulation or any loan, note or other
agreement or instrument to which it is a party or by which it or any
of its properties are bound.
(iv) When delivered to the General Partner, this Agreement
will be duly and validly executed by such Limited Partner and will be
binding upon it in accordance with the terms hereof, except as limited
by bankruptcy, insolvency or similar law of general application
relating to the enforcement of creditors' rights.
(c) All representations, warranties and covenants made by the
General Partner or the Limited Partners in this Agreement or any other document
contemplated thereby or hereby shall be considered to have been relied upon by
the other parties hereto and shall survive the execution and delivery of this
Agreement or such other document, regardless of any investigation made by or on
behalf of any such party.
SECTION 8. RATIFICATION. The Partnership Agreement, to the
extent amended by this Agreement, is hereby ratified and confirmed.
SECTION 9. COUNTERPARTS. This Agreement shall be executed in
multiple counterparts, with each such counterpart constituting an original, and
all of such counterparts constituting but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the day and year first above written.
GENERAL PARTNER:
CLIFFWOOD OIL & GAS CORP.
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx, President
SIGNATURE PAGE--MAY 1998 AGREEMENT IN RESPECT OF AGREEMENT OF LIMITED
PARTNERSHIP OF CLIFFWOOD ACQUISITION - 1996 LIMITED PARTNERSHIP.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the day and year first above written.
LIMITED PARTNER:
ENERGY CAPITAL INVESTMENT
COMPANY PLC
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, Director
SIGNATURE PAGE--MAY 1998 AGREEMENT IN RESPECT OF AGREEMENT OF LIMITED
PARTNERSHIP OF CLIFFWOOD ACQUISITION - 1996 LIMITED PARTNERSHIP.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the day and year first above written.
LIMITED PARTNER:
ENCAP EQUITY 1996 LIMITED
PARTNERSHIP
By: ENCAP INVESTMENTS L.C.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Managing
Director
SIGNATURE PAGE--MAY 1998 AGREEMENT IN RESPECT OF AGREEMENT OF LIMITED
PARTNERSHIP OF CLIFFWOOD ACQUISITION - 1996 LIMITED PARTNERSHIP.
