EXHIBIT 99.4
BUSINESS OPPORTUNITY AGREEMENT
THIS BUSINESS OPPORTUNITY AGREEMENT (this "Agreement"), dated as of October
30, 1995, is by and among Enron Capital & Trade Resources Corp., a Delaware
corporation ("ECT"), Coda Acquisition, Inc., a Delaware corporation ("Sub"),
Joint Energy Development Investments Limited Partnership, a Delaware limited
partnership ("JEDI"), and each of the individuals listed on the signature page
hereto (the "Management Investors").
W I T N E S S E T H:
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WHEREAS, Coda Energy, Inc., a Delaware corporation ("Coda"), and ECT are
parties to a letter of understanding dated August 23, 1995 relating to a
proposed merger of Sub into Coda (the "Merger") pursuant to which Coda will be
the surviving corporation, the holders of all outstanding shares of Common Stock
of Coda immediately prior to the Merger will receive cash for such shares, and
ECT or its designee will own a controlling interest in Coda following the
Merger; and
WHEREAS, JEDI is an Affiliate (as defined below) of ECT, and ECT has agreed
with JEDI that it will make certain investments ("Qualified Investments")
through JEDI, but ECT has no obligation to make other investments ("Excluded
Investments") through JEDI; and
WHEREAS, although it has no obligation to do so, ECT has offered to JEDI
the opportunity to be its designee that will own a controlling interest in Coda
following the Merger, and JEDI has accepted such offer and, in connection
therewith, has designated such interest as a Qualified Investment rather than an
Excluded Investment; and
WHEREAS, JEDI expects to derive significant benefits from its ownership
interest in Coda following the Merger; and
WHEREAS, in contemplation of and in connection with the Merger, Sub
proposes to enter into subscription agreements with each Management Investor,
employment agreements with certain Management Investors, a Stockholders
Agreement (as defined below) with JEDI and each Management Investor and other
arrangements that the parties hereto believe to be beneficial to Coda, the
Management Investors and JEDI following the Merger, such agreements and
arrangements to be executed simultaneously with the execution of this Agreement
and effective upon consummation of the Merger; and
WHEREAS, the Management Investors expect to derive significant benefits
from the Merger and from their employment relationship with, and ownership
interests in, Coda following the Merger; and
WHEREAS, ECT is a wholly-owned subsidiary of Enron Corp., a Delaware
corporation ("Enron"), and Enron owns controlling interests in a number of other
entities (Enron, ECT and any other Affiliate of Enron other than Coda being
referred to herein individually as an "Enron Entity" and collectively as "Enron
Entities"); and
WHEREAS, in order for the Merger to occur, ECT and other Enron Entities
will be required to take certain actions, including the execution of definitive
agreements relating to the Merger, the approval of the terms of the subscription
agreements, employment agreements, Stockholders Agreement and other arrangements
between Coda and the Management Investors following the Merger and the
furnishing of cash necessary to permit the Merger consideration to be paid to
the holders of outstanding Common Stock of Coda; and
WHEREAS, Enron Entities own interests in a number of corporations,
partnerships and other entities engaged in energy-related businesses and intend
to acquire from time to time additional interests in such Persons (as
hereinafter defined) or in other Persons; and
WHEREAS, Enron Entities may owe fiduciary or contractual duties to other
Enron Entities and to owners of interests in other Enron Entities or to other
Persons; and
WHEREAS, upon consummation of the Merger, Enron Entities may owe fiduciary
or contractual duties to Coda, its stockholders and other Persons, and Coda may
owe fiduciary or contractual duties to its stockholders and other Persons; and
WHEREAS, in the event an Enron Entity or Coda were to breach any such duty,
it could be held liable for damages in a legal action brought either directly on
behalf of the Person to whom such duty is owed or derivatively on behalf of such
Person by its stockholders, partners or other owners; and
WHEREAS, duties that an Enron Entity or Coda may owe to another Person may
include, under certain circumstances, the duty not to take advantage of a
Business Opportunity (as hereinafter defined) without first offering to such
other Person the opportunity to take advantage of such Business Opportunity; and
WHEREAS, under the laws applicable to fiduciary duties, in the absence of
this Agreement there could arise circumstances in which an Enron Entity has, or
may be alleged to have, conflicting duties to offer a Business Opportunity to
more than one Person; and
WHEREAS, Enron Entities from time to time purchase properties or entities
and engage in lending or other activities that may result in the acquisition of
interests in properties or entities, including the acquisition of production
payments, royalty interests and other interests in energy properties, and among
the Enron Entities is ECT Securities Corp., which is a registered broker-dealer
that arranges transactions in securities for others and may in the future engage
in securities underwriting activities; and
WHEREAS, ECT is unwilling to take the actions required of it in order for
the Merger to occur without assurances from the Management Investors and JEDI
that Enron Entities will be permitted to continue to conduct their business
following the Merger without undue risk of liability or damage to business
relationships with customers; and but for this Agreement ECT would be unwilling
to take such actions because of the unacceptable risk of liability to ECT and
other Enron Entities resulting from uncertainties regarding the duties owed by
them and conflicts between duties owed to Coda and duties owed to other Persons;
and
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WHEREAS, the parties hereto desire to provide for more certainty regarding
the circumstances in which an Enron Entity has a duty to offer a Business
Opportunity to Coda, to provide for other agreements intended to permit Enron
Entities to continue to conduct their business activities without undue risk of
liability to Coda or its stockholders, including the Management Investors,
following the Merger or undue risk of damage to the Enron Entities' business
relationships and to enter into other agreements aimed at providing, to the
extent practicable, more certainty regarding the duties of Enron Entities and
Coda; and
WHEREAS, ECT, in offering to JEDI the opportunity to be its designee that
will own a controlling interest in Coda following the Merger and in taking other
actions it is required to take or cause to be taken in order for the Merger to
occur, has relied on the fact that this Agreement would be executed and in the
future will rely on this Agreement and the commitments herein made by Coda, the
Management Investors and JEDI; and ECT and other Enron Entities that are
beneficiaries of this Agreement will, in taking the steps required of them to
cause or permit the Merger to occur and in continuing to conduct their business
following the Merger, rely on this Agreement and the commitments herein made by
Coda, the Management Investors and JEDI; and
WHEREAS, in order to induce ECT and other Enron Entities to enter into, or
to cause other Enron Entities to enter into, definitive agreements relating to
the Merger (including subscription agreements, the Stockholders Agreement and,
in the case of certain Management Investors, employment agreements), to enable
ECT and other Enron Entities to take the other actions required to be taken by
them in order for the Merger to be consummated, to provide more certainty
regarding the duties of the parties to this Agreement to each other following
the Merger, to permit the Enron Entities to comply with their fiduciary and
contractual duties and to avoid undue risk of litigation, the parties hereto
desire to enter into this Agreement; and each party agrees that this Agreement
is a material inducement to the other parties hereto to enter into the
agreements relating to the Merger and to consummate the Merger;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and obligations hereinafter set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. When used herein the following terms
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shall have the meanings indicated:
"AFFILIATE" of a Person means any Person controlling, controlled by, or
under common control with such Person, with "control" and its correlative terms
meaning the possession, directly or indirectly, of the power to direct or cause
the direction of management or policies (whether through ownership of securities
or any partnership or other ownership interest, by contract or otherwise) of a
Person. For the purposes of this Agreement, control shall include the
possession, directly or indirectly, through one or more intermediaries, of (A)
in the case of a corporation, 50% or more of the outstanding voting securities
thereof; (B) in the case of a limited liability company, partnership, limited
partnership or venture, the right to 50% or more of the distributions therefrom
(including liquidating distributions); and (C) in the case of any other Person,
50% or more of the economic or beneficial interest therein. For the purposes of
this
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Agreement, control shall also include serving as manager or general partner of a
Person or performing similar functions for a Person.
"BUSINESS OPPORTUNITY" means any opportunity for a Person (a) to enter into
any transaction pursuant to which such Person would acquire (whether by
purchase, lease, or other transaction), own, invest in, finance, lend funds to,
contribute capital to, manage, operate or otherwise participate in any Person,
assets or transaction or (b) to act as a broker, finder, financial adviser or
investment banker with respect to any such transaction by any other Person. In
no event, however, will the opportunity to market oil or gas produced by Coda or
other Persons from properties in which Coda has an interest constitute a
Business Opportunity, and such term shall exclude the acquisition of equipment
and supplies in the ordinary course of Coda's oil and gas exploration,
development and production business.
"CODA" means Coda and all Affiliates of Coda in which Coda owns an
interest, directly or indirectly, unless the context otherwise requires.
"PERSON" means any natural person, corporation, limited partnership,
limited liability company, general partnership, joint stock company, joint
venture, association, company, trust, bank, trust company, land trust, business
trust or other organization, whether or not a legal entity.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement of even date
herewith among Sub, JEDI and the Management Investors.
SECTION 2. OPTION RELATING TO ENRON PROJECTS. (a) Sub hereby grants to
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ECT an option (the "Enron Project Option") on those Business Opportunities that
Coda desires to pursue, but with respect to which, at the time Coda first
notifies ECT that Coda desires to pursue such Business Opportunity, an Enron
Entity has already taken and plans to continue to take Significant Steps (as
defined in Section 2(c)) to pursue a Business Opportunity involving the same
entity or the same or substantially the same properties (an "Enron Project");
provided, however, that the Enron Project Option is exercisable only if the
pursuit of such Business Opportunity by Coda would (in ECT's reasonable judgment
made in good faith) conflict with or make significantly more difficult the
efforts by an Enron Entity to pursue such Enron Project.
(b) If ECT is entitled to exercise the Enron Project Option and does so,
then an Enron Entity may pursue the Business Opportunity to the exclusion of
Coda or may otherwise pursue the Enron Project, in which case Coda will refrain
from pursuing such Business Opportunity, unless and until ECT informs Coda that
the Enron Entity has ceased its efforts to pursue such Business Opportunity.
Upon exercise of the Enron Project Option, an Enron Entity that elects to pursue
an Enron Project is not required to do so on terms that are identical to the
terms of the Business Opportunity that Coda proposed to pursue.
(c) "Significant Steps" means the commitment of significant human or
financial resources in pursuit of a Business Opportunity including, but not be
limited to, the commitment of significant engineering, financial, legal,
accounting or other resources (including in-house resources) to the process of
evaluating the property or entity that is the subject of the Business
Opportunity, the signing of a letter of intent or memorandum of understanding,
or the exchange
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of proposals or negotiations with management of an entity that is the subject of
the Business Opportunity or that owns the property that is the subject of the
Business Opportunity. An Enron Entity shall not be deemed to have taken
Significant Steps if its commitment has been limited to the review and
preliminary evaluation of periodic reports filed with the Securities and
Exchange Commission or other publicly available information and/or a review and
preliminary evaluation of an offering circular, private placement memorandum or
similar offering materials prepared for use by multiple parties that may
consider such Business Opportunity.
(d) The parties hereby stipulate that ECT has taken Significant Steps with
respect to Enron Projects involving entities listed in the document entitled
"Enron Projects List" dated the date hereof and delivered by ECT to the
Representatives and to the General Counsel of Coda. The parties agree that ECT
is not required to disclose the Enron Projects List to Management Investors
other than the Representatives and the General Counsel of Coda.
SECTION 3. ECT CONSENT REQUIRED IN CERTAIN EVENTS. Sub agrees that Coda
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will not pursue a Business Opportunity without the prior consent of ECT if:
(a) An Enron Entity (other than Enron Oil & Gas Company) has a lending
relationship or a significant ownership or similar relationship with any
property or entity (including Affiliates of such entity) that is the subject of
the Business Opportunity or an investment banking relationship with any such
entity; or
(b) An entity (including Affiliates of such entity) that is the subject of
the Business Opportunity or whose properties are so subject is listed in the
document entitled "ECT Business Opportunity Restricted List" dated the date
hereof and delivered by ECT to Coda and the Management Investors; or
(c) An entity (including Affiliates of such entity) that is the subject of
the Business Opportunity or whose properties are so subject is a party to a
contract with an Enron Entity that is material to Enron and its subsidiaries
considered as a whole.
Relationships of the type referred to in Section 3(a) include the ownership of a
production payment burdening such property or any property owned by such entity,
a royalty or overriding royalty interest burdening such property or any property
owned by such entity, a loan secured by such property to such entity or
guaranteed by such entity, a joint ownership interest in such property or an
equity interest in such entity (other than a less than 5% interest in a class of
publicly traded securities). No lending relationship of the type referred to in
Section 3(a) will be deemed to exist unless there is an outstanding unpaid
balance on a loan or an outstanding loan commitment. An investment banking
relationship of the type referred to in Section 3(a) will include an arrangement
pursuant to which ECT Securities Corp. is performing underwriting or brokerage
services for such entity. ECT may from time to time amend the ECT Business
Opportunity Restricted List, provided that no entity may be added to the list
unless an Enron Entity has a relationship with it of the type described in
Section 3(a).
SECTION 4. AGREEMENT THAT ENRON ENTITIES DO NOT HAVE TO OFFER CERTAIN
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BUSINESS OPPORTUNITIES TO CODA. (a) Sub, the Management Investors and JEDI
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agree that any Business
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Opportunity developed by an Enron Entity is not required to be offered to Coda
and may be pursued by such Enron Entity or another Enron Entity (and hereby
waive the right to claim that any such Business Opportunity should be offered to
Coda) if such Business Opportunity has any one or more of the following
characteristics:
(i) less than 35% of the aggregate estimated investment in the
Business Opportunity is attributable, directly or indirectly, to mineral
interests in oil and gas properties located within five miles of any oil or
gas field that includes properties that are owned by Coda and that account
for more than 5% of the book value of total assets of Coda and its
subsidiaries on a consolidated basis; and
(ii) the Business Opportunity consists of the acquisition of
publicly traded securities constituting less than 10% of a class of
outstanding securities, provided that the acquisition thereof is effected
for the purpose of investment or for trading purposes and not for the
purpose of obtaining control of the issuer or of any of its assets; and
(iii) the Business Opportunity is developed by Enron Oil & Gas
Company ("EOG"); and
(iv) the Business Opportunity is developed by an Enron Entity other
than EOG, unless more than 50% by value of the assets that are the subject
of, or owned by the entity that is the subject of, the Business Opportunity
are devoted to the businesses of exploring for oil and gas, developing oil
and gas reserves upon discovery thereof, operating oil and gas properties,
producing oil and gas from such properties and realizing value from the
sale of production from such properties (the "E&P Business").
(b) for purposes of the foregoing, the E&P Business does not include the
following businesses, and assets employed in the following activities shall not
be considered to be part of the E&P Business for purposes of determining whether
the 50% test in Section 4(a)(iv) is met:
(i) acquisition or development of coal bed methane projects;
(ii) acquiring or developing mineral prospects other than those
involving the production of hydrocarbons or involving the production of
sulphur or other minerals produced in association with hydrocarbons;
(iii) acquisition or development of geothermal projects or prospects;
(iv) acquisition or development of integrated projects in which a
significant portion of the projects' capital expenditures must be spent on
infrastructure, such as transportation facilities, or in which the economic
success of the exploration, development and production activities depends
on the development of a large cogeneration facility, liquefied natural gas
facility, processing facility, manufacturing plant or other facility
requiring significant capital investment by the party conducting the
business (as opposed to third parties);
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(v) manufacturing or drilling and production services for third
parties, including, without limitation, manufacturing of oilfield
equipment, production of drilling fluids, contract xxxxxxx services,
contract drilling services, oilfield rental tool services, fishing
services, mud services, well evaluation services, workover services,
contract operator services, supply or crew transportation services or any
other services of the type typically contracted for by oil and gas
exploration, development and production companies;
(vi) oil or gas transportation or storage business, including the
ownership or operation of gathering systems, transmission pipelines,
compressor stations, barges, storage facilities or related facilities (but
excluding the acquisition and ownership of equipment and supplies of the
type normally acquired by exploration, development and production companies
in connection with their activities on oil and gas leases);
(vii) gas processing, fractionation of natural gas liquids, chemical
manufacturing or similar businesses (but excluding field separation
operations);
(viii) the business of trading in energy price swaps, options, futures
contracts or other derivative products (except to hedge its own price
risk), the business of making unsecured loans or loans secured by oil and
gas or other properties, the business of acquiring production payments or
conducting other activities that may enable oil and gas companies or other
companies to obtain funds for financing their businesses, or the business
of conducting other activities designed to assist oil and gas companies in
making acquisitions; or
(ix) the business of marketing oil and gas produced by third parties
or otherwise purchasing and reselling or exchanging oil and gas for a
profit.
Nothing in this Section 4 shall be deemed to constitute an agreement by Sub that
Coda will not acquire any business that conducts non-E&P Business activities.
SECTION 5. PURSUIT OF BUSINESS OPPORTUNITIES BY ENRON ENTITIES IN CERTAIN
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EVENTS. Sub agrees that Enron Entities may continue to conduct their business
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in the ordinary course, even if doing so may have a competitive impact on Coda.
In that connection, Sub recognizes that ECT and other Enron Entities will
continue to engage in oil and gas marketing activities, that ECT may continue to
engage in financing of other entities or in furnishing services in connection
therewith (including financing of or services in connection with Business
Opportunities pursued by others in competition with Coda) and that ECT may
acquire other Persons engaged in oil and gas exploration and production. Sub,
JEDI and the Management Investors hereby consent to such activities, even if
they have competitive impact on Coda.
SECTION 6. CONSENTS BY STOCKHOLDERS OF CODA. At any time, ECT or Coda
--------------------------------
may request that any stockholder of Coda furnish to ECT or Coda a consent in
writing to any action or inaction by any Enron Entity or Coda that ECT or Coda
believes such Enron Entity or Coda is entitled under Section 2, 3, 4 or 5 of
this Agreement to take or refrain from taking. In the event a stockholder of
Coda fails or refuses to furnish the consent, ECT or Coda, as the case may be,
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shall have the right to submit the matter to arbitration. If a stockholder of
Coda furnishes such consent, such consent will also contain an agreement by such
stockholder that, in the absence of a material misstatement or omission by ECT
or Coda in connection with its request for such consent, he or she will not
thereafter claim that the action or inaction covered by such consent is a breach
of this Agreement or any fiduciary or other duty owed by ECT or any other Enron
Entity to Coda or to such stockholder or by Coda or its Board of Directors to
such stockholder. Nothing herein shall be deemed to require ECT or Coda to
submit any matter to arbitration.
SECTION 7. ARBITRATION.
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(a) Agreement to Arbitrate. Any and all claims, demands, causes of
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action, disputes, controversies and other matters in question arising out of or
relating to any provision of Sections 2, 3, 4, 5, 6, 8(c), 8(e) or 8(m) of this
Agreement or the alleged breach thereof ("Claims"), even though some or all of
such Claims allegedly are extracontractual in nature, whether such Claims sound
in contract, tort or otherwise, at law or in equity, under state or federal law,
whether provided by statute or the common law, for damages or any other relief,
shall be resolved and decided exclusively by binding arbitration pursuant to the
Federal Arbitration Act in accordance with the Commercial Arbitration Rules then
in effect with the American Arbitration Association. Any arbitration initiated
hereunder involving a matter with respect to which ECT or Coda has requested a
consent under Section 6 must be initiated within six months following ECT's or
Coda's first request for such consent.
(b) Procedural Matters. The arbitration proceeding shall be conducted in
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Dallas, Texas. The arbitration shall be before a panel of three arbitrators.
Each party to such dispute shall select one arbitrator (with all Management
Investors party to the dispute considered to be one party) and the two
arbitrators selected by the parties shall select the third arbitrator. The
arbitrators are authorized to issue subpoenas for depositions and other
discovery mechanisms, as well as trial subpoenas, in accordance with the Federal
Rules of Civil Procedure. Any party may initiate a proceeding in the
appropriate United States District Court to enforce this provision. This
agreement to arbitrate shall be enforceable in either federal or state court.
Judgment upon any award rendered in any such arbitration proceeding may be
entered by any federal or state court having jurisdiction. The enforcement of
this agreement to arbitrate and all procedural aspects of this agreement to
arbitrate, including the construction and interpretation of this agreement to
arbitrate, the scope of the arbitrable issues, allegations of waiver, delay or
defenses to arbitrability and the rules governing the conduct of the
arbitration, shall be governed by and construed pursuant to the Federal
Arbitration Act.
(c) Amounts Awarded. The arbitrators may award such damages as they deem
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appropriate, except that the arbitrators shall have no authority under any
circumstances to award punitive (including, without limitation, any exemplary
damages, treble damages or any other penalty or punitive type of damages),
consequential, incidental or indirect damages (in tort, contract or otherwise)
that exceed, with respect to any Claim (regardless of the number of Persons
asserting such Claim or the number of Persons against whom such Claim is
asserted), the lesser of (i) the amount equal to the amount of actual damages
awarded, if any, and (ii) $500,000, regardless of whether such damages may be
available under applicable law or otherwise, the
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parties hereby waiving their right, if any, to recover such damages in excess of
such amount in connection with any such Claim.
(d) Costs. The arbitrators shall be entitled to award costs of the
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arbitration and attorney's fees as they deem appropriate, except that in the
event an arbitration is initiated regarding a Claim involving a matter with
respect to which ECT or Coda requested a consent pursuant to Section 6 and the
Claimant failed or refused to furnish such consent, the arbitrator shall award
costs of the arbitration and attorney's fees to the prevailing party in the
arbitration.
(e) Prior Notice. Prior to the institution of a Claim under this
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Agreement by any Person, such Person shall provide to Coda and all other Parties
to this Agreement a written notice specifying the nature and basis of the Claim.
The Persons who are the subject of any Claim shall be given thirty (30) days to
cure any breach before any Claim is filed.
SECTION 8. MISCELLANEOUS.
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(a) Contracts and Agreements. Each of Sub and ECT agrees not to, and Sub
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agrees that following the Merger Coda will not, enter into any contracts or
agreements that will prevent it from performing its duties and obligations
hereunder or prevent the other parties to this Agreement from realizing the
benefits hereof. Notwithstanding the foregoing provisions of this Section 8(a),
in the event that (x) Coda or ECT, as the case may be, has made reasonable
efforts to persuade a third party that proposes to make a Business Opportunity
available to agree to contract terms that will permit Coda or ECT to perform in
full its obligations hereunder, (y) such third party is unwilling to agree to
contract terms that will permit Coda or ECT to perform in full its obligations
hereunder, and (z) such third party will not make such Business Opportunity
available unless ECT, another Enron Entity or Coda, as the case may be, enters
into a contract with terms that will not or may not permit Coda or ECT, as the
case may be, to perform in full its obligations hereunder, then ECT, such other
Enron Entity or Coda, as the case may be, may enter into such contract (and the
entering into such contract shall not be a breach hereof). In such case, the
obligations of the parties to this Agreement shall be subject to the terms of
such contract.
(b) Third Party Beneficiaries This Agreement is also intended for the
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benefit of each member of the Board of Directors of Coda and each Enron Entity,
each of which will be considered a third party beneficiary of this Agreement.
(c) Confidentiality. The provisions of this Agreement and all information
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regarding Business Opportunities, Enron Projects and entities listed on the ECT
Business Opportunity Restricted List, and all other information exchanged by the
parties pursuant to this Agreement, shall not be disclosed by any party to this
Agreement unless otherwise publicly disclosed and except as otherwise required
by law. The Representatives and the General Counsel of Coda will keep
confidential any information supplied to them by ECT under this Agreement and
will not disclose it to other Persons, including other Management Investors,
except that (i) they may disclose it to any employee of Coda if in their
reasonable judgment such employee has the need to know such information in order
to discharge his or her duties as an employee and (ii) they may disclose it to
any Management Investor if in their reasonable judgment such Management Investor
has a need to know such information in connection with a decision to grant or
withhold
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a consent pursuant to Section 6. Except as provided in the preceding sentence,
the Representatives will keep confidential the Enron Projects List and the ECT
Business Opportunity Restricted List, and in that connection they will not,
without the prior written consent of ECT, disclose the contents of either list
to any other Management Investor. The confidentiality obligations of any
Management Investor under this Agreement shall expire on the first anniversary
of the date on which such Management Investor ceases to be an employee of Coda,
except that in any event no Management Investor shall disclose any information
covered by a confidentiality agreement to which any Enron Entity or Coda is a
party if such disclosure would constitute a breach of such confidentiality
agreement.
(d) Amendment; Waivers. This Agreement may only be altered, supplemented,
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amended or waived by the written consent of each party hereto; provided that a
majority of Mr. Xxxx Xxxxxx, Xx. Xxxxx Xxxxxxxxx and Xx. Xxxx Xxxxxxx (the
"Representatives") may take any action on behalf of all Management Investors
with respect to any matter with respect to which all Management Investors are
similarly situated. Notwithstanding the foregoing, the Representatives will not
have any authority to grant, on behalf of any other Management Investor, any
consent and waiver requested by ECT or Coda pursuant to Section 6 or an
arbitration with respect thereto. All Management Investors will be deemed to be
similarly situated with respect to the receipt of the Enron Projects List under
Section 2 and the receipt of the ECT Business Opportunity Restricted List under
Section 3.
(e) Assignment. The terms and conditions of this Agreement shall inure to
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the benefit of and be binding upon the parties hereto and their permitted
successors and assigns; provided, however, that no party hereto shall have the
right to assign this Agreement without the consent of the other parties hereto.
JEDI and each Management Investor agrees that it will not assign its shares of
capital stock of Coda or any portion thereof to any Person unless it obtains
from such Person an agreement to be bound by this Agreement. Sub agrees that
Coda will not issue any additional shares of capital stock of Coda to any Person
unless it obtains from such Person an agreement to be bound by this Agreement
and an agreement that such Person will not assign its shares of capital stock of
Coda or any portion thereof to any other Person unless it obtains from such
Person an agreement to be bound by this Agreement.
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(f) Notices. Any and all notices, designations, consents, offers,
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acceptances, or other communications provided for herein (each a "Notice") shall
be given in writing by personal delivery, overnight courier, telegram, or
telecopy which shall be addressed, or sent, to the respective addresses or
telecopy numbers as follows (or such other address or telecopy number as any
party hereto may specify for itself by Notice given in accordance with this
Section 8(f)):
ECT: Enron Capital & Trade Resources Corp.
0000 Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx/Xxxxxx XxXxx, Specialist - 28th
Floor
Telecopy No. 000-000-0000
Telephone No. 000-000-0000
Sub: Coda Energy, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telecopy No. 000-000-0000
Telephone No. 000-000-0000
The Representatives: Mr. Xxxx Xxxxxx, Xx. Xxxxx Xxxxxxxxx and Xx. Xxxx
Xxxxxxx
Coda Energy, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Management Investors: c/o Mr. Xxxx Xxxxxx, Xx. Xxxxx Xxxxxxxxx and Xx. Xxxx
Xxxxxxx
Coda Energy, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
All Notices shall be deemed effective, delivered and received (a) if given by
personal delivery, when such Notice is personally delivered at the address
specified above; (b) if given by telecopy, when such telecopy is transmitted to
the telecopy number specified above and receipt thereof is confirmed; (c) if
given by overnight courier, on the business day immediately following the day on
which such Notice is delivered to a reputable overnight courier service; or (d)
if given by telegram, when such Notice is delivered at the address specified
above.
(g) Counterparts. This Agreement may be executed in two or more
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counterparts, each of which counterparts shall be deemed to be an original and
which counterparts together shall constitute one and the same agreement of the
parties hereto.
(h) Choice of Law. This Agreement shall be governed by the internal laws
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of the State of Texas without regard to the principles of conflicts of laws
thereof.
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(i) Entire Agreement. This Agreement contains the entire understanding of
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the parties hereto respecting the subject matter hereof and supersedes all prior
agreements, discussions and understandings with respect thereto.
(j) No Partnership. No term or provision of this Agreement shall be
--------------
construed to establish any relationship of partnership, agency or joint venture
among the parties hereto.
(k) Invalidity. In the event that any one or more of the provisions
----------
contained in this Agreement is, for any reason, held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
will not affect any other provision of this Agreement.
(l) Contractual Obligations. Nothing herein shall require any Enron Entity
-----------------------
or Coda to fail to perform any contractual obligation to which it is subject,
including any obligation under any standstill agreement or confidentiality
agreement with any entity that may be the subject of a Business Opportunity.
(m) Effectiveness of this Agreement. This Agreement is effective upon
-------------------------------
consummation of the Merger, except that the obligations in Sections 8(a) and
8(c) shall be effective immediately. This Agreement will terminate upon the
occurrence of a Trigger Event (as defined in the Stockholders Agreement). Sub
agrees that Coda will not effect a public offering of its common stock or engage
in any other transaction that will result in public ownership of its common
stock unless subsequent to the offering Enron Entities will own less than 50% of
the outstanding common stock of Coda or unless the parties reach agreement on
the terms and conditions of a business opportunity agreement that is appropriate
for a company with publicly traded common stock, that is satisfactory to the
underwriters, if any, and that permits ECT and other Enron Entities to continue
to operate their businesses without undue risk of liability.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
ENRON CAPITAL & TRADE RESOURCES CORP.
By:___________________________________________
Name:_________________________________________
Title:________________________________________
CODA ACQUISITION, INC.
By:___________________________________________
Name: C.Xxxx Xxxxxxxx
Title: Vice President
-12-
JOINT ENERGY DEVELOPMENT
INVESTMENTS LIMITED PARTNERSHIP
By: ENRON CAPITAL MANAGEMENT
LIMITED PARTNERSHIP, as General Partner
By: ENRON CAPITAL CORP., as General Partner
By:________________________________________
Name: C. Xxxx Xxxxxxxx
Title: Agent and Attorney-in-Fact
MANAGEMENT INVESTORS:
___________________________________________
Xxxxxxx X. Xxxxxxxxxx
___________________________________________
Xxx X. Xxxxxxxx
___________________________________________
J. Xxxxx Xxxxxxxx
___________________________________________
X. X. Xxxxxxx
___________________________________________
Xxx X. Xxxxxx
___________________________________________
Xxxxx X. Xxxxxxxxx
___________________________________________
Xxxxxx X. Xxxxxxx
___________________________________________
Xxxxx X. Xxxxxxx
-13-
___________________________________________
Xxxx X. Xxxxxxx
___________________________________________
Xxxxxxx X. Xxxxxx
___________________________________________
Xxxx X. Xxxxxx
___________________________________________
Xxxx X. Xxxxxxxx
___________________________________________
Xxxxxx X. Xxxxxx
___________________________________________
Xxx X. Xxxxxxx, III
___________________________________________
Xxxxx X. Xxxxxxxx
