Exhibit 99(f)
OMNIBUS AND RELEASE AGREEMENT
This OMNIBUS AND RELEASE AGREEMENT (the "Agreement"), dated as of February
28, 2005, is entered into by and among OCM GW Holdings, LLC, a Delaware limited
liability company ("Holdings"), GulfWest Energy Inc., a Texas corporation (the
"Company"), and those Shareholders of the Company set forth on the signature
page hereto (each a "Shareholder" and collectively the "Shareholders").
RECITALS
A. Holdings and the Company have entered into a Subscription Agreement of
even date herewith (the "Subscription Agreement"), pursuant to which Holdings
has agreed to purchase 81,000 shares of the Company's Series G Convertible
Preferred Stock, par value $0.01 per share (the "Series G Preferred Stock").
B. As of the date hereof, the Shareholders are the record owners and
Beneficial Owners of that number of shares of Series H Convertible Preferred
Stock, par value $0.01 per share, as set forth in Schedule I.
C. As a condition to its willingness to enter into the Subscription
Agreement, Holdings has required that each Shareholder agree, and to induce
Holdings to enter into the Subscription Agreement, each Shareholder is willing
to agree, to, among other things, the release of the certain persons and
entities and restrictions on the disposition of their H Shares (as defined) and
Common Stock as set forth herein.
D. The Company is granting certain registration rights to the Shareholders.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
agreements, representations and warranties herein contained, and intending to be
legally bound hereby, Holdings and the Shareholders hereby agree as follows:
1. Definitions. Undefined capitalized terms in this Agreement are defined
in the Subscription Agreement. For purposes of this Agreement:
(a) "Beneficially Own," "Beneficial Owner" or "Beneficial Ownership" with
respect to any securities means having voting power or investment power with
respect to such securities (as determined pursuant to Rule 13d-3(a) under the
Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing.
(b) "Bona Fide Offer" means any bona fide offer to acquire shares of H
Shares (whether in the form of a purchase of shares of H Shares, merger,
consolidation, exchange, business combination, recapitalization or otherwise)
made by an unrelated Person which has the demonstrable financial ability to
consummate such a transaction.
(c) "H Shares" means shares of the Series H Convertible Preferred Stock of
the Company, par value $.001. References to a person's or entity's H Shares
shall include any H Shares Beneficially Owned by such Shareholder or any H
Shares acquired by a Shareholder after the date hereof without any further
action on the part of the Shareholders or Holdings, including acquisitions: (i)
by purchase or by any other means of acquiring Beneficial Ownership; and (ii) in
connection with any stock dividend and distribution and any shares into which or
for which any or all of the Series H Convertible Preferred Stock (or any class
thereof) may be changed or exchanged as may be appropriate to reflect any stock
dividend or distribution, or any change in the Series H Convertible Preferred
Stock (or any class thereof) by reason of any split-up, recapitalization,
combination, exchange of shares or the like.
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Exhibit 99(f)
(d) "Oaktree Parties" means Oaktree Capital Management, LLC, Holdings, OCM
Principal Opportunities Fund III, L.P., OCM Principal Opportunities Fund IIIA,
L.P. and each of their respective Permitted Transferees and affiliates.
(e) "Permitted Transferee" means, with respect to a Person, (i) any general
partner or managing member of such Person, or (ii) any partnership, limited
partnership, limited liability company, corporation or other entity organized,
formed or incorporated and managed or controlled by such Person, its general
partner or managing member as a vehicle for purposes of making investments.
2. No Ownership Interest. Nothing contained in this Agreement will be
deemed to vest in Holdings any direct or indirect ownership or incidents of
ownership of or with respect to securities of the Company of which any
Shareholder is a record owner or Beneficial Owner. All rights, ownership and
economic benefits of and relating to such securities will remain and belong to
such Shareholder, and Holdings will have no authority to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of Company or exercise any power or authority to direct such
Shareholder in the voting of any of such securities, except as otherwise
expressly provided herein.
3. Covenants, Representations and Warranties of the Shareholders. Each
Shareholder hereby represents, warrants and covenants to Company, severally and
not jointly, as follows:
(a) Ownership. As of the date hereof, such Shareholder is the record owner
and Beneficial Owner of the number of issued and outstanding H Shares set forth
in Schedule I with respect to such Shareholder. Except as contemplated by
Section 9(i) with respect to such Shareholder's spouse, if any, such Shareholder
has the sole power to agree to all of the matters set forth in this Agreement,
in each case with respect to all H Shares, with no limitations, qualifications
or restrictions on such rights, subject to applicable securities laws and the
terms of this Agreement.
(b) Power; Binding Agreement. If such Shareholder is an individual, such
Shareholder has the legal capacity, power and authority to enter into and
perform all of such Shareholder's obligations under this Agreement. If such
Shareholder is an entity, it is an entity duly organized, created or formed,
validly existing and in good standing under the laws of its jurisdiction of
organization, creation or formation, such Shareholder has the power and
authority to perform all of such Shareholder's obligations under the Agreement,
and the performance of all of such Shareholder's obligations under this
Agreement have been duly authorized by all requisite entity action. This
Agreement has been duly and validly executed and delivered by such Shareholder
and constitutes a valid and binding agreement of such Shareholder, enforceable
against such Shareholder in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally and by
general equitable principles). There is no beneficiary or Shareholder of a
voting trust certificate or other interest of any trust of which such
Shareholder is trustee whose consent is required for the execution and delivery
of this Agreement or the consummation by such Shareholder of the transactions
contemplated hereby.
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(c) No Conflicts. As of the date of this Agreement, except for filings
under the Exchange Act, if applicable, no filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by such Shareholder
and the consummation by such Shareholder of the transactions contemplated
hereby, and none of the execution and delivery of this Agreement by such
Shareholder, the consummation by such Shareholder of the transactions
contemplated hereby or compliance by such Shareholder with any of the provisions
hereof will (i) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which such Shareholder is a
party or by which such Shareholder or any of such Shareholder's properties or
assets may be bound, (ii) require any consent, authorization or approval of any
person or entity or (iii) violate any order, writ, injunction, decree, judgment,
order, statute, rule or regulation applicable to such Shareholder or any H
Shares.
(d) Restriction on Transfers. Except as otherwise contemplated by this
Agreement, such Shareholder will not:
(i) from and after the date of this Agreement and ending at such time as
such Shareholder no longer is a record owner or Beneficial Owner of any H
Shares, directly or indirectly, enter into any swap, option, future, forward or
other similar agreement that transfers, in whole or in part, any of the economic
consequences of ownership of any H Shares or the Company's Class A Common Stock,
par value $0.001 per share (the "Common Stock") (the "Covered Securities"),
whether any such transaction is to be settled by delivery of any security, in
cash or otherwise; provided, however, that such Shareholder may sell shares of
Common Stock to the extent not prohibited by the foregoing;
(ii) from and after the date of this Agreement and until the second
anniversary of the date hereof, directly or indirectly without the written
consent of Holdings, with respect to any H Shares, offer for sale, sell,
announce the intention to sell, transfer, tender, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to, any H Shares, or consent to the offer for sale,
sale, transfer, tender, pledge, encumbrance, assignment or other disposition of,
any H Shares, including pursuant to a Bona Fide Offer;
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Exhibit 99(f)
(iii) enter into any agreement or arrangement providing for any of the
actions described in clause (i) or (ii) above until expiration of the applicable
time period set forth therein;
(iv) take any action that would reasonably be expected to have the effect
of preventing or disabling such Shareholder from performing such Shareholder's
obligations under this Agreement; or
(v) request that Company register the transfer (book-entry or otherwise) of
any certificate or uncertificated interest representing any H Shares, or Common
Stock to be delivered pursuant to a transaction in violation of clause (i)
above, except as otherwise contemplated hereby.
(e) Stop Transfer Order. Each Shareholder consents to the entry of a stop
transfer order with the transfer agent or agents of Company's securities against
the transfer of such Shareholder's H Shares except in compliance with this
Agreement or, if the Company is its own transfer agent with respect to any H
Shares or Common Stock, refusal by the Company to transfer any such H Shares or
Common Stock to be delivered pursuant to a transaction in violation of Section
3(d)(i), except in compliance with this Agreement.
(f) Further Assurances. From time to time, at Holding's reasonable request
and without further consideration, such Shareholder will perform such further
acts and execute and deliver such additional documents as may be necessary or
desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
4. Right of First Refusal.
(a) Subject to the terms and conditions in this Section 4, on and after the
second anniversary of the date the first H Share is issued to such Shareholder
(immediately following the lapse of the restrictions set forth in Section
3(d)(ii)), each Shareholder hereby grants to Holdings (or such Oaktree Party
designated by Holdings) (the "Rights Shareholder") a right of first refusal with
respect to offers to purchase its H Shares.
(b) Each time each such Shareholder receives a Bona Fide Offer, such
Shareholder (the "RFR Selling Shareholder") will allow the Rights Shareholder to
purchase such H Shares subject to the Bona Fide Offer (the "RFR Capital Stock")
in accordance with the following provisions:
(i) Such RFR Selling Shareholder shall deliver a notice by certified mail
(the "Offer Notice") to the Rights Shareholder stating (i) it has received from
a third party a bona fide offer to acquire such RFR Capital Stock, (ii) the
number of shares of RFR Capital Stock proposed to be acquired by such third
party, and (iii) the per share price and terms, if any, upon which such third
party proposes to acquire such RFR Capital Stock.
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Exhibit 99(f)
(ii) By written notification received by the RFR Selling Shareholder within
20 days after giving of the Offer Notice (the "Offer Period"), the Rights
Shareholder may elect to purchase or obtain, at the price and on the terms
specified in the Offer Notice, up to that number of shares of RFR Capital Stock
as that proposed to be acquired from the RFR Selling Shareholder and set forth
in the Offer Notice.
(iii) In the notice of election made by the Rights Shareholder pursuant to
paragraph (ii) above, the Rights Shareholder shall state whether it has agreed
to purchase all the RFR Capital Stock set forth therein or a lesser number, and
if a lesser number, how many shares.
(iv) Any notice by the Rights Shareholder to purchase RFR Capital Stock
shall be binding on the Rights Shareholder except to the extent otherwise
provided in this Section 4.
(v) With respect to those shares of RFR Capital Stock that are not
subscribed by the Rights Shareholder, (a) the RFR Selling Shareholder shall have
60 days following the expiration of the Offer Period to sell or enter into an
agreement to sell such RFR Capital Stock to the third party that so offered to
purchase such RFR Capital Stock at a price not less than, and upon terms no more
favorable to such third party than those specified in the Offer Notice, (b) if
the Rights Shareholder has exercised its right to purchase less than all RFR
Capital Stock pursuant to this Section 4 it shall not be obligated to consummate
such purchase unless and until any remaining shares of RFR Capital Stock set
forth in the Offer Notice not elected to be purchased by the Rights Shareholder
have actually been sold in accordance with the terms set forth in the Offer
Notice, in which event a closing with respect to both the purchase by such
Rights Shareholder and such third party shall occur simultaneously, and (c) the
proposed third party transferee must agree in writing to be bound by the terms
and provisions of this Agreement as a Shareholder. If the Company does not sell
such RFR Capital Stock referred to in the Offer Notice within such 60 day period
or the agreement entered into with respect to such RFR Capital Stock within such
60 day period is not consummated within 30 days of the execution thereof, the
RFR Selling Shareholder shall not thereafter issue or sell any H Shares without
first again offering such securities to the Rights Shareholder in the manner
provided above.
5. Shareholder Capacity. If such Shareholder is an officer or director of
the Company, such Shareholder does not make any agreement or understanding
herein in such Shareholder's capacity as a director or officer of Company. Such
Shareholder executes this Agreement solely in such Shareholder's capacity as a
record owner and/or Beneficial Owner of Company securities and nothing herein
will limit or affect any actions taken by such Shareholder or any designee of
such Shareholder in such Shareholder's capacity as an officer or director of
Company or any of its subsidiaries to comply with his fiduciary obligations as
an officer or director of Company.
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Exhibit 99(f)
6. Oaktree Parties. For administrative convenience, any notice or other
communication to any Oaktree Party shall be deemed given, subject to Section
9(c), upon delivery to the care of Oaktree Capital Management, LLC, and any
right or obligation of any Oaktree Party may be exercised or discharged, as
applicable, by Oaktree Capital Management, LLC on behalf any or all Oaktree
Parties
7. Release.
(a) Each Shareholder, on behalf of such Shareholder and each of such
Shareholder's affiliates and all of their respective heirs, representatives,
successors, and assigns, hereby releases and forever discharges each Releasee
from any and all liabilities, claims, demands, debts and causes of action,
whether known or unknown, suspected or unsuspected, contingent, unmatured or
inchoate, both at law and in equity, which such Shareholder or any of such
Shareholder's affiliates or any of their respective heirs, representatives,
successors or assigns now has, have ever had or may hereafter have against the
respective Releasees arising contemporaneously with or prior to the Closing or
on account of or arising out of any matter, cause, or event occurring
contemporaneously with or prior to the Closing Date including any rights to
indemnification or reimbursement from the Company or any of its subsidiaries,
whether pursuant to their respective organizational documents, contract or
otherwise and whether or not relating to actions pending on, or asserted after,
the Closing; provided, however, that nothing contained herein will operate to
release any obligations of the Company or any Oaktree Party arising under this
Agreement or the Statement of Resolution governing the H Shares.
(b) Each Shareholder hereby irrevocably covenants to refrain from, directly
or indirectly, asserting any cause of action, or commencing, instituting or
causing to be commenced, any action, of any kind against any Releasee, based
upon any matter purported to be released hereby.
(c) "Releasee" or "Releasees" means each of the Company, its subsidiaries,
the Oaktree Parties and each of their respective officers, directors, managers,
employees, advisors, attorneys, agents, Shareholders, controlling persons,
representatives and affiliates, including in each case those persons and
entities currently in such positions and any persons or entities put in such
positions as a result of the transactions contemplated hereby, and each of their
respective heirs, successors and assigns.
8. Piggyback Registration Rights.
(a) Right to Include Registrable Securities. At any time the Company
proposes for any reason to register any of its Common Stock under the Securities
Act, either for its own account or for the account of a securityholder of the
Company exercising demand registration rights other than pursuant to a
Registration Statement on Forms S-4 or S-8 (or similar or successor forms) (a
"Proposed Registration"), the Company shall promptly give written notice of such
Proposed Registration to all of the Shareholders holding Registrable Securities
(which notice shall be given not less than 20 days before the expected effective
date of the Company's Registration Statement) and shall offer such Shareholders
the right to request inclusion of any of such Shareholder's Registrable
Securities in the Proposed Registration. The rights to piggyback registration
may be exercised an unlimited number of occasions.
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Exhibit 99(f)
(b) Piggyback Procedure. Each Shareholder shall have ten days from the date
of receipt of the Company's notice referred to in Section 8(a) to deliver to the
Company a written request specifying the number of Registrable Securities such
Shareholder intends to sell and such Shareholder's intended method of
disposition. Any Shareholder may withdraw such Shareholder's request for
inclusion of such Shareholder's Registrable Securities in any Registration
Statement pursuant to this Section 8 by giving written notice to the Company of
such withdrawal; provided, however, that the Company may ignore a notice of
withdrawal made within 24 hours of the time the Registration Statement is to
become effective. Subject to Section 8(d), the Company shall use its reasonable
best efforts to include in such Registration Statement all such Registrable
Securities so requested to be included therein; provided, however, that the
Company may at any time withdraw or cease proceeding with any such Proposed
Registration if it withdraws or ceases proceeding with the registration of all
other securities originally proposed to be registered. If the Proposed
Registration is, in whole or in part, an underwritten public offering of
securities of the Company, any request under this Section 8(b) shall specify
that the Registrable Securities be included in the underwriting on the same
terms and conditions as the shares, if any, otherwise being sold through
underwriters under such registration.
(c) Priority for Piggyback Registration. Notwithstanding any other
provision of this Section 8, if the managing underwriter of an underwritten
public offering determines and advises the Company that the inclusion of all
Registrable Securities proposed to be included by the Participating Shareholders
in the underwritten public offering would materially and adversely interfere
with the successful marketing of the Company's securities, then the
Participating Shareholders may not include any Registrable Securities in excess
of the amount, if any, of Registrable Securities which the managing underwriter
of such underwritten public offering shall reasonably and in good faith agree in
writing to include in such public offering in addition to the amount of
securities to be registered for the Company. The Company must include in such
Registration Statement, as to each Participating Shareholder, only a portion of
the Registrable Securities such Participating Shareholder has requested be
registered equal to the ratio which such Participating Shareholder's requested
Registrable Securities bears to the total number of Registrable Securities
requested to be included in such Registration Statement by all Participating
Shareholders who have requested that their Registrable Securities be included in
such Registration Statement. Pursuant to the foregoing provision, the securities
to be included in a registration initiated by the Company shall be allocated:
(i) first, to the Company;
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Exhibit 99(f)
(ii) second, to any others requesting registration of securities of the
Company pursuant to demand registration rights;
(iii) third to persons or entities exercising registration rights under the
Shareholders Rights Agreement of the Company, dated the date hereof, as amended
from time to time; and
(iv) fourth, to the Participating Shareholders and others having the right
to include securities in such Registration Statement.
If as a result of the provisions of this Section 8(c), any Participating
Shareholder may not include all of its Registrable Securities in a registration
that such Shareholder has requested to be so included, such Participating
Shareholder may withdraw such Participating Shareholder's request to include
Registrable Securities in such Registration Statement.
(d) Registration Procedures. The Company shall use its best efforts to
effect the registration and sale of the Registrable Securities in accordance
with the intended method of distribution thereof as promptly as possible, and in
connection with any such request, the Company shall, as expeditiously as
possible:
(i) Preparation of Registration Statement; Effectiveness. Prepare and file
with the SEC a Registration Statement on any form on which the Company then
qualifies, which counsel for the Company shall deem appropriate and pursuant to
which such offering may be made in accordance with the intended method of
distribution thereof (except that the Registration Statement shall contain such
information as may reasonably be requested for marketing or other purposes by
the managing underwriter), and use its best efforts to cause any registration
required hereunder to become effective as soon as practicable after the initial
filing thereof and remain effective until all Registrable Securities have been
sold in accordance with the methods of distribution set forth in the
Registration Statement;
(ii) 10b-5 Notification. Promptly notify in writing the Participating
Shareholders, the sales or placement agent, if any, therefor and the managing
underwriter of the securities being sold pursuant to the Registration Statement
at any time when a prospectus relating thereto is required to be delivered under
the Securities Act upon discovery that, or upon the happening of any event as a
result of which, any prospectus included in the Registration Statement (or
amendment or supplement thereto) contains an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances
under which they were made, and the Company shall promptly prepare a supplement
or amendment to such prospectus and file it with the SEC (in any event no later
than ten days following notice of the occurrence of such event to each
Participating Shareholder, the sales or placement agent and the managing
underwriter) so that after delivery of such prospectus, as so amended or
supplemented, to the purchasers of such Registrable Securities, such prospectus,
as so amended or supplemented, shall not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made;
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Exhibit 99(f)
(iii) Notification of Stop Orders; Suspensions of Qualifications and
Exemptions. Promptly notify in writing the Participating Shareholders, the sales
or placement agent, if any, therefor and the managing underwriter of the
securities being sold of the issuance by the SEC of (A) any stop order issued or
threatened to be issued by the SEC or (B) any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and the Company agrees to use its
best efforts to (x) prevent the issuance of any such stop order, and in the
event of such issuance, to obtain the withdrawal of any such stop order and (y)
obtain the withdrawal of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any Registrable Securities
included in the Registration Statement for sale in any jurisdiction at the
earliest practicable date;
(iv) Amendments and Supplements. Prepare and file with the SEC such
amendments, including post-effective amendments to the Registration Statement as
may be necessary to keep the Registration Statement continuously effective for
the applicable time period required hereunder and, if applicable, cause the
related prospectus to be supplemented by any required prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) promulgated under the Securities Act; and comply with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all securities covered by the Registration Statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in the Registration Statement as so amended or in such
prospectus as so supplemented;
(v) Blue Sky. Use its reasonable best efforts to, prior to any public
offering of the Registrable Securities, register or qualify (or seek an
exemption from registration or qualifications) such Registrable Securities under
such other securities or blue sky laws of such jurisdictions as any
Participating Shareholder or underwriter may request, and to continue such
qualification in effect in each such jurisdiction for as long as is permissible
pursuant to the laws of such jurisdiction, or for as long as a Participating
Shareholder or underwriter requests or until all of such Registrable Securities
are sold, whichever is shortest, and do any and all other acts and things which
may be reasonably necessary or advisable to enable any Participating Shareholder
to consummate the disposition in such jurisdictions of the Registrable
Securities;
(vi) Other Approvals. Use its reasonable best efforts to obtain all other
approvals, consents, exemptions or authorizations from such governmental
agencies or authorities as may be necessary to enable the Participating
Shareholders and underwriters to consummate the disposition of Registrable
Securities;
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(vii) Agreements. Enter into customary agreements (including any
underwriting agreements in customary form), and take such other actions as may
be reasonably required in order to expedite or facilitate the disposition of
Registrable Securities;
(viii) SEC Compliance, Earnings Statement. Comply with all applicable rules
and regulations of the SEC and make available to its Shareholders, as soon as
reasonably practicable, but no later than 15 months after the effective date of
the Registration Statement, an earnings statement covering a period of 12 months
beginning after the effective date of the Registration Statement, in a manner
which satisfies the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder;
(ix) Certificates, Closing. Provide officers' certificates and other
customary closing documents;
(x) NASD. Cooperate with each Participating Shareholder and each
underwriter participating in the disposition of such Registrable Securities and
underwriters' counsel in connection with any filings required to be made with
the NASD;
(xi) Listing. Use its best efforts to cause all such Registrable Securities
to be listed on each securities exchange on which similar securities issued by
the Company are then listed and if not so listed, to be listed on the NASD
automated quotation system;
(xii) Transfer Agent, Registrar and CUSIP. Provide a transfer agent and
registrar for all Registrable Securities registered pursuant hereto and a CUSIP
number for all such Registrable Securities, in each case, no later than the
effective date of such registration; and
(xiii) Best Efforts. Use its reasonable best efforts to take all other
actions necessary to effect the registration of the Registrable Securities
contemplated hereby.
B-10
Exhibit 99(f)
(e) Seller Information. The Company may require each Participating
Shareholder as to which any registration of such Shareholder's Registrable
Securities is being effected to furnish to the Company with such information
regarding such Participating Shareholder and such Participating Shareholder's
method of distribution of such Registrable Securities as the Company may from
time to time reasonably request in writing. If a Participating Shareholder
refuses to provide the Company with any of such information on the grounds that
it is not necessary to include such information in the Registration Statement,
the Company may exclude such Participating Shareholder's Registrable Securities
from the Registration Statement if the Company provides such Participating
Shareholder with an opinion of counsel to the effect that such information
should be included in the Registration Statement and such Participating
Shareholder continues thereafter to withhold such information. The exclusion of
a Participating Shareholder's Registrable Securities shall not affect the
registration of the other Registrable Securities to be included in the
Registration Statement.
(f) Notice to Discontinue. Each Participating Shareholder whose Registrable
Securities are covered by the Registration Statement filed pursuant to this
Agreement agrees that, upon receipt of written notice from the Company of the
happening of any event of the kind described in Section 8(d)(ii) or 8(d)(iii),
such Participating Shareholder shall forthwith discontinue the disposition of
Registrable Securities until such Participating Shareholder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section
8(d)(ii) or 8(d)(iii) or until it is advised in writing by the Company that the
use of the prospectus may be resumed and has received copies of any additional
or supplemental filings which are incorporated by reference into the prospectus,
and, if so directed by the Company in the case of an event described in Section
8(d)(ii) or 8(d)(iii), such Participating Shareholder shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Participating Shareholder's possession, of the prospectus covering
such Registrable Securities which is current at the time of receipt of such
notice.
(g) Registration Expenses. Except as otherwise provided herein, all
Registration Expenses shall be borne by the Company. All Selling Expenses
relating to Registrable Securities registered shall be borne by the
Participating Shareholders of such Registrable Securities pro rata on the basis
of the number of shares so registered.
(h) Indemnification.
(i) Indemnification by the Company. The Company agrees, notwithstanding
termination of this Agreement, to indemnify and hold harmless to the fullest
extent permitted by applicable law, each Shareholder, each of its directors,
officers, employees, advisors, agents and general or limited partners (and the
directors, officers, employees, advisors and agents thereof), their respective
Affiliates and each Person who controls (within the meaning of the Securities
Act or the Exchange Act) any of such Persons, and each underwriter and each
Person who controls (within the meaning of the Securities Act or the Exchange
Act) any underwriter (collectively, "Shareholder Indemnified Parties") from and
against any and all losses, claims, damages, expenses (including, reasonable
costs of investigation and fees, disbursements and other charges of counsel and
experts and any amounts paid in settlement effected with the Company's consent,
which consent shall not be unreasonably withheld or delayed) or other
liabilities (collectively, "Losses") to which any such Shareholder Indemnified
Party may become subject under the Securities Act, Exchange Act, any other
federal law, any state or common law or any rule or regulation promulgated
thereunder or otherwise, insofar as such Losses (or actions or proceedings,
whether commenced or threatened, in respect thereof) are resulting from or
arising out of or based upon (i) any untrue, or alleged untrue, statement of a
material fact contained in the Registration Statement, prospectus or preliminary
prospectus (as amended or supplemented) or any document incorporated by
reference in any of the foregoing or resulting from or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein (in the case of
a prospectus, in light of the circumstances under which they were made), not
misleading, or (ii) any violation by the Company of the Securities Act, Exchange
Act, any other federal law, any state or common law or any rule or regulation
promulgated thereunder or otherwise incident to any registration, qualification
or compliance and in any such case, the Company will promptly reimburse each
such Shareholder Indemnified Party for any legal expenses and any other Losses
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability, action or investigation or proceeding
(collectively, a "Claim"). Such indemnity obligation shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Shareholder Indemnified Parties and shall survive the transfer of Registrable
Securities by such Shareholder Indemnified Parties.
B-11
Exhibit 99(f)
(ii) Indemnification by Shareholders. In connection with any proposed
registration in which a Shareholder is participating pursuant to this Agreement,
each such Shareholder shall furnish to the Company in writing such information
with respect to such Shareholder as the Company may reasonably request or as may
be required by law for use in connection with the Registration Statement or
prospectus or preliminary prospectus to be used in connection with such
registration and each Shareholder agrees, severally and not jointly, to
indemnify and hold harmless the Company, any underwriter retained by the Company
and their respective directors, officers, partners, employees, advisors and
agents, their respective Affiliates and each Person who controls (within the
meaning of the Securities Act or the Exchange Act) any of such Persons to the
same extent as the foregoing indemnity from the Company to the Shareholders as
set forth in Section 8(h)(i) (subject to the exceptions set forth in the
foregoing indemnity, the proviso to this sentence and applicable law), but only
with respect to any such information furnished in writing by such Shareholder
expressly for use therein; provided, however, that, unless such liability is
directly caused by such Shareholder's willful or intentional misconduct, the
liability of any such Shareholder under this Section 8(h)(ii) shall be limited
to the amount of the net proceeds received by such Shareholder in the offering
giving rise to such liability. Such indemnity obligation shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Shareholder Indemnified Parties (except as provided above) and shall survive the
transfer of Registrable Securities by such Shareholder.
(iii) Conduct of Indemnification Proceedings. Any person or entity entitled
to indemnification hereunder (the "Indemnified Party") agrees to give prompt
written notice to the indemnifying party (the "Indemnifying Party") after the
receipt by the Indemnified Party of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in writing
for which the Indemnified Party intends to claim indemnification or contribution
pursuant to this Agreement; provided, however, that, the failure so to notify
the Indemnifying Party shall not relieve the Indemnifying Party of any liability
that it may have to the Indemnified Party hereunder unless and to the extent
such Indemnifying Party is materially prejudiced by such failure. If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party may participate in and, to the extent it may
wish, jointly with any other Indemnifying Party similarly notified, to assume
the defense of such action at its own expense, with counsel chosen by it and
reasonably satisfactory to such Indemnified Party. The Indemnified Party may
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be paid by the
Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii)
the Indemnifying Party fails to assume the defense of such action with counsel
satisfactory to the Indemnified Party in its reasonable judgment or (iii) the
named parties to any such action reasonably believe that the representation of
such Indemnified Party and the Indemnifying Party by the same counsel would be
inappropriate under applicable standards of professional conduct. In the case of
clause (ii) above and (iii) above, the Indemnifying Party may not assume the
defense of such action on behalf of such Indemnified Party. No Indemnifying
Party shall be liable for any settlement entered into without its written
consent, which consent shall not be unreasonably withheld. No Indemnifying Party
may, without the written consent of the Indemnified Party, effect the settlement
or compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened Claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the Indemnified Party is an actual or
potential party to such Claim) unless such settlement, compromise or judgment
(A) includes an unconditional release of the Indemnified Party from all
liability arising out of such Claim and (B) does not include a statement as to,
or an admission of, fault, culpability or a failure to act by or on behalf of
any Indemnified Party. The rights afforded to any Indemnified Party hereunder
shall be in addition to any rights that such Indemnified Party may have at
common law, by separate agreement or otherwise.
B-12
Exhibit 99(f)
(iv) Contribution. If the indemnification provided for in this Section 8(h)
from the Indemnifying Party is unavailable or insufficient to hold harmless an
Indemnified Party in respect of any Losses, then the Indemnifying Party, in lieu
of indemnifying the Indemnified Party, shall contribute to the amount paid or
payable by the Indemnified Party as a result of such Losses in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
the Indemnified Party, as well as any other relevant equitable considerations.
The relative faults of the Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, was made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
Indemnifying Party's and Indemnified Party's relative intent, knowledge, access
to information and opportunity to correct or prevent such action; provided,
however, that, unless such liability is directly caused by such Shareholder's
willful or intentional misconduct, the liability of any such Shareholder under
this Section 8(h)(iv) shall be limited to the amount of the net proceeds
received by such Shareholder in the offering giving rise to such liability. The
amount paid or payable by a party as a result of the Losses or other liabilities
referred to above shall be deemed to include, subject to the limitations set
forth in Sections 8(h)(i), 8(h)(ii), or 8(h)(iii), any legal or other fees,
charges or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
B-13
Exhibit 99(f)
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(h)(iv) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution pursuant to this
Section 8(h)(iv).
(i) Rule 144 and Rule 144A; Other Exemptions. The Company shall use its
commercially reasonable efforts to (i) file in a timely manner all reports and
other documents required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder and
(ii) take such further action as each Shareholder may reasonably request
(including providing any information necessary to comply with Rule 144), all to
the extent required from time to time to enable such Shareholder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (x) Rule 144 under the Securities Act,
as such rules may be amended from time to time or (y) any other rules or
regulations now existing or hereafter adopted by the SEC. Upon the written
request of a Shareholder, the Company shall deliver to the Shareholder a written
statement as to whether it has complied with such requirements.
(j) Certain Limitations On Registration Rights. No Shareholder may
participate in the Registration Statement hereunder unless such Shareholder
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, and other documents reasonably required under the terms
of such underwriting arrangements and agrees to sell such Shareholder's
Registrable Securities on the basis provided in any underwriting agreement
approved by the Shareholder or Shareholders entitled hereunder to approve such
arrangements; provided, however, that no such Shareholder shall be required to
make any representations or warranties to the Company or the underwriters in
connection with any such registration other than representations and warranties
as to (i) such Shareholder's ownership of its Registrable Securities to be sold
or transferred, (ii) such Shareholder's power and authority to effect such
transfer and (iii) such matters pertaining to compliance with securities laws as
may be reasonably requested. Such Shareholders of Registrable Securities to be
sold by such underwriters may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of the
Company to and for the benefit of such underwriters, shall also be made to and
for the benefit of such Shareholders and that any or all of the conditions
precedent to the obligations of the underwriters under the underwriting
agreement be conditions precedent to the obligations of the Shareholders.
B-14
(k) Restrictions on Public Sale by Shareholders. If requested by the lead
managing underwriter with respect to any firm underwriting public offering in
which Shareholders are permitted to participate hereunder, each Shareholder of
Registrable Securities agrees not to effect any public sale or distribution of
any Registrable Securities being registered or of any securities convertible
into or exchangeable or exercisable for such Registrable Securities, including a
sale pursuant to Rule 144 under the Securities Act, during a period of not more
than 180 days after any firm underwriting public offering of Common Stock of the
Company, commencing on the effective date of the Registration Statement (the
"Lock-Up Period"), unless expressly authorized to do so by the lead managing
underwriter; provided, however, that if any other Shareholder of securities of
the Company is subject to a shorter period or receives more advantageous terms
relating to the Lock-Up Period, then the Lock-Up Period shall be such shorter
period and also on such more advantageous terms. Notwithstanding the foregoing,
the Shareholders shall not be required to sign lock-up agreements unless other
Persons permitted to include securities on such Registration Statement and all
of the Company's directors and executive officers have signed substantially
similar lock-up agreements with the managing underwriters. Any such lock-up
agreements signed by the Shareholders shall contain reasonable and customary
exceptions.
(l) Transfer of Registration Rights. The rights of a Shareholder under this
Section 8 may not be transferred or assigned in connection with a transfer of
Registrable Securities.
(m) Amendment. The provisions of this Section 8 may be waived or amended by
the agreement of Shareholders holding a majority of the Registrable Securities.
(n) Definitions. For this Section 8:
"Claim" is defined in Section 8(h)(i).
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Indemnified Party" is defined in Section 8(h)(iii).
"Indemnifying Party" is defined in Section 8(h)(iii). "Losses" is defined
in Section 8(h)(i).
"NASD" means the National Association of Securities Dealers, Inc.
"Participating Shareholders" means Shareholders participating, or electing
to participate, in an offering of Registrable Securities.
"Proposed Registration" is defined in Section 8(a).
"Registrable Securities" means any shares of Common Stock held by
Shareholder as listed as Registrable Securities on Schedule I and any shares of
Common Stock issued to a Shareholder as a dividend on H Shares, including any
resulting shares issued, by virtue of the effect of antidilution provisions or
combination, merger, consolidation or other similar event; provided, however,
that shares of Common Stock that are considered to be Registrable Securities
shall cease to be Registrable Securities (i) upon the sale thereof pursuant to
an effective registration statement, (ii) upon the first anniversary of the date
of the issuance of such shares or (iii) when such securities cease to be
outstanding.
B-15
Exhibit 99(f)
"Registration Expenses" means all expenses (other than underwriting
discounts and commissions) arising from or incident to the performance of, or
compliance with, Section 8, including, (i) SEC, stock exchange, NASD and other
registration and filing fees, (ii) all fees and expenses incurred in connection
with complying with any securities or blue sky laws (including, fees, charges
and disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) all printing, messenger and delivery expenses,
(iv) the fees, charges and disbursements of counsel to the Company and of its
independent public accountants and any other accounting and legal fees, charges
and expenses incurred by the Company (including, any expenses arising from any
special audits or "comfort letters" required in connection with or incident to
any registration), (v) the fees, charges and disbursements of any special
experts retained by the Company in connection with any registration pursuant to
the terms of this Agreement, (vi) all internal expenses of the Company
(including, all salaries and expenses of its officers and employees performing
legal or accounting duties), (vii) the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange,
over-the-counter market or Nasdaq and (viii) Securities Act liability insurance
(if the Company elects to obtain such insurance), regardless of whether the
Registration Statement filed in connection with such registration is declared
effective. "Registration Expenses" shall not include fees, charges and
disbursements of any firm of counsel to any Participating Shareholders.
"Registration Statement" means the registration statement of the Company
filed with the SEC on the appropriate form pursuant to the Securities Act which
covers shares of Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to the Registration Statement,
including post-effective amendments, in each case including the prospectus
contained therein, all exhibits thereto and all materials incorporated by
reference therein.
"SEC" or "Commission" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Selling Expenses" means the underwriting fees, discounts, selling
commissions and stock transfer taxes applicable to all Registrable Securities
registered by the Participating Shareholders.
"Shareholder Indemnified Parties" is defined in Section 8(h)(i).
9. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto in respect of its subject matter and
supersedes all prior understandings, agreements, or representations by or among
the parties hereto, written or oral, to the extent they relate in any way to the
subject matter hereof or the transactions contemplated hereby.
B-16
Exhibit 99(f)
(b) Amendment; Waiver. This Agreement may not be amended or modified, and
no provisions hereof may be waived, without the written consent of Shareholders
holding a majority of the H Shares governed by this Agreement at the relevant
time and Holdings; provided that no amendment may be made to Section 7 or the
provisions of Section 9 affecting such Section without the consent of each
affected Releasee. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed
as a further or continuing waiver of such breach or as a waiver of any other or
subsequent breach. No failure on the part of any party to exercise, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law. Notwithstanding the
foregoing, Shareholders holding a majority of the H Shares governed by this
Agreement at the relevant time and Holdings may waive the performance of a party
to this Agreement; provided that no such waiver shall affect any Shareholders
obligations under Section 7 or the provisions of Section 9 affecting such
Section without the consent of each affected Releasee.
(c) Notices. Any notice, request, demand or other communication required or
permitted to be given to a party pursuant to the provisions of this Agreement
will be in writing and will be effective and deemed given under this Agreement
on the earliest of: (a) the date of personal delivery, (b) the date of
transmission by facsimile, with confirmed transmission and receipt, (c) two days
after deposit with a nationally-recognized courier or overnight service such as
Federal Express, or (d) five days after mailing via certified mail, return
receipt requested. All notices not delivered personally or by facsimile will be
sent with postage and other charges prepaid and properly addressed to the party
to be notified at the address set forth for such party:
(i) If to Holdings:
c/o Oaktree Capital Management, LLC
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: B. Xxxxx Xxxx
Telecopier: (000) 000-0000
B-17
Exhibit 99(f)
with a copy to (which does not constitute notice):
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxxx
(ii) If to a Shareholder:
To the name and address beside such Shareholder's name on the signature
page hereto.
(d) Severability. The provisions of this Agreement will be deemed severable
and the invalidity or unenforceability of any provision hereof will not affect
the validity or enforceability of the other provisions hereof; provided that if
any provision of this Agreement, as applied to any party or to any circumstance,
is adjudged by a court, governmental body, arbitrator not to be enforceable in
accordance with its terms, the parties agree that the court, governmental body,
arbitrator making such determination will have the power to modify the provision
in a manner consistent with its objectives such that it is enforceable, and/or
to delete specific words or phrases, and in its reduced form, such provision
will then be enforceable and will be enforced.
(e) Construction. The parties hereto have jointly participated in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement will be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof will arise
favoring or disfavoring any party hereto because of the authorship of any
provision of this Agreement. Any reference to any federal, state, local or
foreign law will also be deemed to refer to such law as amended and all rules
and regulations promulgated thereunder, unless the context otherwise requires.
The words "include," "includes" and "including" will be deemed to be followed by
"without limitation." Pronouns in masculine, feminine and neuter genders will be
construed to include any other gender, and words in the singular form will be
construed to include the plural and vice versa, unless the context otherwise
requires. The words "this Agreement," "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. The parties hereto intend
that each representation, warranty and covenant contained herein will have
independent significance. If any party hereto has breached any representation,
warranty or covenant contained herein in any respect, the fact that there exists
another representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which such party has
breached, will not detract from or mitigate the fact that such party is in
breach of the first representation, warranty or covenant.
B-18
Exhibit 99(f)
(f) Arbitration. Any and all claims, counterclaims, demands, causes of
action, disputes, controversies, and other matters in question arising out of or
relating to this Agreement or in any way relating to the subject matter of this
Agreement or the relationship between the parties hereto created by this
Agreement, involving the parties hereto or their respective representatives
("Disputes") even though all or some of the Disputes allegedly are
extra-contractual in nature, whether such Disputes sound in contract, tort or
otherwise, at law or in equity, under state, provincial or federal law, for
damages or any other relief will be resolved as follows: first, each affected
Shareholder and representatives of Holdings will meet to attempt to resolve such
Dispute. If the Dispute cannot be resolved by agreement of the affected parties
hereto, any such party may at any time make a written demand for binding
arbitration of the Dispute in accordance with this Section provided that the
foregoing shall not preclude equitable or other judicial relief to enforce the
provisions hereof or to preserve the status quo pending resolution of Disputes;
and provided further that resolution of Disputes with respect to claims by third
Persons will be deferred until any judicial proceedings with respect thereto are
concluded. Subject to the provisions of this Section, such Shareholder(s) and
Holdings will agree upon the rules of the arbitration prior to the arbitration
and based upon the nature of the Dispute; provided that to the extent that the
parties hereto cannot agree on the rules of the arbitration, then the Commercial
Arbitration Rules of the American Arbitration Association in effect on the date
hereof, and except as the applicable rules are modified by this Agreement, will
apply. As a minimum set of rules in the arbitration the parties hereto agree as
follows:
(i) To the extent the claims asserted are in excess of $4.0 million, the
arbitration will be held before a panel of three arbitrators consisting of one
arbitrator selected by Shareholder(s), the other selected by Holdings, and the
third then selected by those two arbitrators (such third arbitrator to be
neutral). If agreement cannot be reached on a third arbitrator within 30 days of
the need therefor, the Chief Judge of the U.S. District Court for the Southern
District of Texas shall appoint an arbitrator. If the claims asserted are less
than $4.0 million, the Chief Judge of the U.S. District Court for the Southern
District of Texas shall appoint a sole arbitrator. All arbitrators shall be
attorneys with at least ten years experience in oil and gas transactions.
(ii) The arbitrator(s) will deliver their decision in writing within 20
days after the termination of the arbitration hearings.
(iii) The non-prevailing party will bear the costs and fees of the
arbitration.
(iv) The arbitrator(s) final decision will be in writing but will not
specify the basis for their decision, the basis for the damages award or the
basis of any other remedy. The arbitrator(s)' decision will be considered as a
final and binding resolution of the disagreement, will not be subject to appeal
and may be entered as an order in any court of competent jurisdiction in the
United States; provided that this Agreement confers no power or authority upon
the arbitrator(s) (i) to render any decision that is based on clearly
erroneously findings of fact, (ii) that manifestly disregards the law, or (iii)
that exceeds the powers of the arbitrator(s), and no such decision will be
eligible for confirmation. Each party hereto agrees to submit to the
jurisdiction of any such court for purposes of the enforcement of any such
order. No party will xxx the other except for enforcement of the arbitrator(s)'
decision if any other party is not performing in accordance with the
arbitrator(s)' decision. The provisions of this Agreement will be binding on the
arbitrator(s).
B-19
(v) Any arbitration proceeding will be conducted on a confidential basis.
(vi) Any arbitration proceeding shall be held in Houston, Texas.
(vii) Any arbitration proceeding, including discovery, shall be conducted
in accordance with the Texas Rules of Civil Procedure and the Texas Rules of
Evidence.
(g) Remedies Cumulative. The parties shall have all remedies for breach of
this Agreement available to them as provided by law or equity. Without limiting
the generality of the foregoing, the parties agree that in addition to any other
rights and remedies available at law or in equity, the parties shall be entitled
to obtain specific performance of the obligations of each party to this
Agreement and immediate injunctive relief and that, in the event any action or
proceeding is brought in equity or to enforce the same, no party will urge, as a
defense, that there is an adequate remedy at law. No single or partial assertion
or exercise of any right, power or remedy of a party hereunder shall preclude
any other or further assertion or exercise thereof.
(h) No Third Party Beneficiaries. Except as otherwise set forth in this
Agreement, all representations, warranties, covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. Nothing in this Agreement shall create or be
deemed to create any third-party beneficiary rights in any Person not a party to
this Agreement; provided that the Releasees are expressly made third party
beneficiaries of this Agreement.
(i) Spouse. Each Shareholder and his spouse, if any, by their execution of
this Agreement, (a) evidence that they are fully aware of, understand and fully
consent and agree to the provisions of this Agreement and its binding effect
upon any community property or similar marital property interest in the
securities of the Company that they may now or hereafter own and (b) agree that
termination of their marital relationship for any reason shall not have the
effect of removing any such securities otherwise subject to this Agreement from
coverage hereof. Each Shareholder further agrees that he shall cause his spouse
(and any subsequent spouse), if any, to execute and deliver a Joinder Agreement
in the form of Exhibit A.
(j) Governing Law. This Agreement and the performance of the transactions
and the obligations of the parties hereunder will be governed by and construed
and enforced in accordance with the laws of the State of Texas, without giving
effect to any choice of law principles.
B-20
Exhibit 99(f)
(k) Descriptive Headings. The section and subsection headings contained in
this Agreement are inserted for convenience only and will not affect in any way
the meaning or interpretation of this Agreement.
(l) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument. If a Shareholder listed on the
signature page hereto does not execute this Agreement, this Agreement shall not
be binding against such Shareholder but shall be binding against those
Shareholders who do execute the Agreement.
(m) Successors and Assigns. This Agreement and the rights and obligations
of the parties hereunder shall inure to the benefit of, and be binding upon,
their respective successors, assigns and legal representatives.
(n) Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement or any other agreement or
document to be executed or delivered pursuant hereto, the prevailing party shall
be entitled to reasonable attorneys' fees, costs, and disbursements in addition
to any other relief to which such party may be entitled.
(o) Adjustments for Stock Splits, Etc. Wherever in this Agreement there is
a reference to a specific number of units or shares of any Company security of
any class or series, then, upon the occurrence of any subdivision, combination
or stock dividend of such class or series of stock, the specific number of
shares so referenced in this Agreement will automatically be proportionally
adjusted to reflect the effect of such subdivision, combination or stock
dividend on the outstanding shares of such class or series of stock.
(p) Termination. Sections 3(d)-(f) and 4 will terminate as to a Shareholder
without any action of any party hereto on the later of (i) two years from the
date the first H Share was issued and (ii) such time as all of such
Shareholder's H Shares have converted into Common Stock. Holdings may terminate
Sections 3(d)-(f) and 4 at any time as to any or all party(ies) by giving ten
days written notice to the other parties hereto. Section 7 and the provisions of
Section 9 affecting such section may not be terminated without the consent of
each person affected, including the third party beneficiaries thereof.
(q) Merger. The parties acknowledge that it is intended that the Company
merge into a Delaware corporation in connection with the transactions
contemplated by the Subscription Agreement. This Agreement shall survive such
merger and shall apply to such Delaware corporation and its capital stock
without any further action on the part of the parties. Each Shareholder agrees
to vote in favor such merger.
B-21
Exhibit 99(f)
(r) Letter Agreement. Each Shareholder is party to the Letter Agreement
dated April 22, 2004, by and among the Company, Gulfwest Oil & Gas Company and
the other signatories thereto. Each Shareholder agrees to exercise no rights
under such agreement. In addition, to the extent requested by the Company, each
Shareholder will execute consents, amendments and waivers to such agreement to
effect the transactions contemplated hereby. Notwithstanding the foregoing, the
Company and the Shareholders agree that, as provided in the Letter Agreement,
the Company will keep the shelf Registration Statement on Form S-1 (SEC
Registration No. 333-116048) effective and current under the Securities Act of
1933, as amended, at its expense until December 8, 2006.
B-22
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the Shareholders and Holdings on the day and year first written above.
GULFWEST ENERGY INC.
By:___________________
Name:
Title:
OCM GW HOLDINGS, LLC
By: _________________
Name:
Title:
SHAREHOLDERS
PETRO CAPITAL ADVISORS
By:____________________
Name:
Title:
XMEN, LLC
By:_____________________
Name:
Title:
XXXXX X. XXXX REVOCABLE TRUST
By:_____________________
Name:
Title:
BARGUS PARTNERSHIP
By: ___________________
Name:
Title:
__________________________
Xxxxxxx Xxxxxx
________________________
Xxxxxxx Xxxxxxxx
_______________________
Xxxxx Xxxxxxxxx
_______________________
Xxxxx X. Xxxxxxxx
STAR-TEX TRADING CO.
By: ________________________
Name:
Title:
______________________________
J. Xxxxxx Xxxxxxxx
SCHEDULE I
--------------------------------------- ------------------------ ---------------------------------
Shareholder H Shares Registrable Securities
--------------------------------------- ------------------------ ---------------------------------
--------------------------------------- ------------------------ ---------------------------------
Petro Capital Advisors 1,000 75,000
--------------------------------------- ------------------------ ---------------------------------
--------------------------------------- ------------------------ ---------------------------------
Xxxxxxx Xxxxxx 600 45,000
--------------------------------------- ------------------------ ---------------------------------
--------------------------------------- ------------------------ ---------------------------------
Xxxxxxx Xxxxxxxx 1,000 75,000
--------------------------------------- ------------------------ ---------------------------------
--------------------------------------- ------------------------ ---------------------------------
Xmen, LLC 1,200 90,000
--------------------------------------- ------------------------ ---------------------------------
--------------------------------------- ------------------------ ---------------------------------
Xxxxx Xxxxxxxxx 40 3,000
--------------------------------------- ------------------------ ---------------------------------
--------------------------------------- ------------------------ ---------------------------------
Xxxxx X. Xxxx Rev. Trust 150 11,250
--------------------------------------- ------------------------ ---------------------------------
--------------------------------------- ------------------------ ---------------------------------
Bargus Partnership 500 37,500
--------------------------------------- ------------------------ ---------------------------------
--------------------------------------- ------------------------ ---------------------------------
Xxxxx X. Xxxxxxxx 260 19,500
--------------------------------------- ------------------------ ---------------------------------
--------------------------------------- ------------------------ ---------------------------------
Star-Tex Trading Co. 200 15,000
--------------------------------------- ------------------------ ---------------------------------
--------------------------------------- ------------------------ ---------------------------------
J. Xxxxxx Xxxxxxxx 3,000 225,000
--------------------------------------- ------------------------ ---------------------------------
EXHIBIT A
JOINDER AGREEMENT
This Joinder Agreement (this "Joinder Agreement") is executed by the
undersigned spouse ( "Spouse") of ___________ ("Shareholder") pursuant to the
terms of that Share Transfer Restriction and Right of First Refusal Agreement
among OCM GW Holdings, LLC ("Holdings") and the Shareholders set forth on the
signature page thereto (as may be amended from time to time, the "Agreement").
By the execution of this Joinder Agreement, Spouse agrees as follows:
1. Joinder. Spouse hereby agrees to be bound by the terms and conditions of
the Agreement to the same extent as if Spouse had executed the Agreement as an
original party thereto. Nothing contained herein shall be deemed to relieve
Shareholder from any liability or obligation incurred thereunder.
2. Representations and Warranties. The covenants, representations and
warranties set forth in Sections 3 and 4 of the Agreement are incorporated
herein mutatis mutandis, and Spouse hereby makes and agrees to such covenants,
representations and warranties as of the date of this Joinder Agreement (except
as to the first sentence of Section 3(a) where Shareholder represents and
warrants as to both record ownership and Beneficial Ownership, to the extent
Spouse may not have record ownership, or become record owner of, securities of
the Company owned of record or that would be owned of record by Shareholder).
3. Notice. Any notice required as permitted by the Agreement shall be given
to the Spouse at the address listed below Spouse's signature below.
4. Definitions. Undefined capitalized terms in this Joinder Agreement are
defined in the Agreement.
5. Counterparts. This Joinder Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
6. Governing Law. This Joinder Agreement shall be governed by the laws of
the State of Texas, without reference to the principles of conflicts of law
thereof.
EXECUTED AND DATED this _____ day of __________, 200_.
[SPOUSE]
By:____________________
Name:
Address:
Attention:
Telecopy:
Agreed to and accepted by Holdings:
OCM GW HOLDINGS, LLC
By:__________________
Name:
Title:
Agreed to and accepted by the Company:
GULFWEST ENERGY INC.
By:___________________
Name:
Title:
