EXHIBIT 4.4
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.
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(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.
(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;
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(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;
(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:
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(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.
(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.
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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.
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.
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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.
(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:
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(i) first, to the Company;
(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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(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;
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(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;
(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.
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(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
(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.
B-12
(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.
(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
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.
B-15
"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.
"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).
B-16
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) 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:
B-17
(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
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
(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
(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
(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: /S/ XXXX X. XXXXX
-------------------------------
Name: Xxxx X. Xxxxx
Title: CEO
OCM GW HOLDINGS, LLC
By: /S/ XXXXXXX XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Principal
SHAREHOLDERS
------------
PETRO CAPITAL ADVISORS
By:
-------------------------------
Name:
Title:
XMEN, LLC
By:
-------------------------------
Name:
Title:
XXXXX X. XXXX REVOCABLE TRUST
By:
-------------------------------
Name:
Title:
BARGUS PARTNERSHIP
By: /S/ XXX XXXXXXXX
-------------------------------
Name: Xxx Xxxxxxxx
Title: Partner
-------------------------------
Xxxxxxx Xxxxxx
/S/ XXXXXXX XXXXXXXX
-------------------------------
Xxxxxxx Xxxxxxxx
-------------------------------
Xxxxx Xxxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
STAR-TEX TRADING CO.
By: Xxxx X. Xxxxx
-------------------------------
Name: Xxxx X. Xxxxx
Title: CEO
/S/ J. XXXXXX XXXXXXXX
-------------------------------
J. Xxxxxx Xxxxxxxx
SCHEDULE I
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SHAREHOLDER H SHARES REGISTRABLE SECURITIES
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Xxxxxxx Xxxxxxxx 1,000 75,000
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Bargus Partnership 500 37,500
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Star-Tex Trading Co. 200 15,000*
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J. Xxxxxx Xxxxxxxx 3,000 225,000*
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* Such Shareholder elected not to receive those Registrable Securities
set forth opposite his name.
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:
