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EXHIBIT 10.2
FIRST AMENDMENT TO THE SECOND AMENDED
AND RESTATED SHAREHOLDERS' AGREEMENT
This First Amendment to the Second Amended and Restated Shareholders'
Agreement (the "Amendment") is made and entered into this 30th day of March,
2000, by and among Xxxxx Energy Company, a Texas corporation (the "Company"),and
Bankers Trust Company, a New York banking corporation ("BT") and each of the
following (collectively, "Existing Shareholders" and together with BT, the
"Shareholders"), B. Xxxx Xxxxx, a Texas resident ("Price"), Don Wm. Xxxxxxxx, a
Texas resident ("Xxxxxxxx"), Energy Capital Investment Company PLC, an English
investment company ("Energy PLC"), EnCap Equity 1994 Limited Partnership, a
Texas limited partnership ("EnCap LP"), BER Partnership L.P., a Texas limited
partnership ("BER"), TJG Investments, Inc., a Texas corporation ("TJG"), BEC
Partnership, a Texas general partnership ("BEC"), Xxx X. Xxxx ("Xxxx"), Xxxxxx
Xxxxxx ("Xxxxxx"), Xxxxx X. Xxxxxx ("Xxxxxx"), BOC Operating Corporation, Inc.,
a Texas corporation ("BOC"), EnCap Energy Capital Fund III-B, L.P., a Texas
limited partnership ("EnCap III-B"), BOCP Energy Partners, L.P., a Texas limited
partnership ("BOCP"), EnCap Energy Capital Fund III, L.P., a Texas limited
partnership ("EnCap III"), Xxxxx Xxxxxxxx Energy Fund, L.P., a Delaware limited
partnership ("Kayne"), BancAmerica Capital Investors SBIC I, L.P., a Delaware
limited partnership ("BACI"), Eos Partners, L.P., a Delaware limited partnership
("Eos Partners"), Eos Partners SBIC, L.P., a Delaware limited partnership ("Eos
SBIC"), Eos Partners SBIC II, L.P., a Delaware limited partnership ("Eos SBIC
II" together with Eos Partners and Eos SBIC, are collectively referred to as
"EOS"), SGC Partners II LLC, a Delaware limited liability company ("SGCP"), and
evidences the following:
RECITALS
A. The Company and the Existing Shareholders entered into the Second
Amended and Restated Shareholders' Agreement (the "Agreement") on May 14, 1999,
pursuant to which such parties agreed, among other things to vote their shares
in favor of the election of the Designated Nominees (as defined in the
Agreement);
B. The Company and certain of the Existing Shareholders have entered
into a Subscription Agreement dated as of even date herewith ("Subscription
Agreement"), pursuant to which such Shareholders have subscribed to purchase
Units (as defined in the Subscription Agreement);
C. The Company, BT and certain other lenders have entered into a Credit
Agreement, dated March 30, 2000, pursuant to which, under the circumstances set
forth therein, certain loans made by BT may be converted into Units;
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D. The parties to the Agreement desire to amend the Agreement as herein
provided to include the Units and to make BT a party to the Agreement;
AGREEMENT
NOW, THEREFORE, for and in consideration of the foregoing Recitals and
mutual covenants contained herein, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby agree
as follows:
Section 1 AMENDMENTS TO DEFINED TERMS. The following defined terms in
the Agreement are amended to read as follows:
(a) The definition of Preferred Shares in Recital B. to the Agreement
shall be deleted.
(b) The following definitions shall be added to Section 1 of the
Agreement
"PREFERRED SHARES" means collectively the Preferred Series B Shares and
the Preferred Series C Shares;
"PREFERRED SERIES B SHARES" means the Company's Cumulative Redeemable
Preferred Stock, Series B, $.01 par value.
"PREFERRED SERIES C SHARES" means the Company's Cumulative Redeemable
Preferred Stock, Series C, $.01 par value.
(c) The definition of Xxxxx Group shall be amended to read as follows:
"XXXXX GROUP" shall mean TJG, BEC, BER, BOC, Goff, Barrow, Xxxxxx and
any transferee of the member of the Xxxxx Group that executes or is required to
execute an Addendum Agreement.
(d) The definition "Shareholder" shall be amended to add BT.
Section 2 AMENDMENTS TO THE RIGHT OF FIRST REFUSAL; TAG-ALONG RIGHTS;
AND DRAG ALONG RIGHTS. The following parts of Section 4 of the Agreement are
amended to read as follows:
(a) Section 4(f) shall be amended to read as follows:
"If any Shareholder desires to make a Disposition of any
Preferred Series B Shares owned or held by it pursuant to a bona fide offer
(other than in an Exempt Transfer), such Shareholder (for purposes of this
Section 4(f), a "Selling Preferred Series B Shareholder") shall offer such
shares (the Preferred Series B Shares proposed to be transferred being called
the "Subject Preferred Series B Shares") for sale at the Purchase Price to the
other Shareholders who then own Preferred Series B Shares ("Preferred Series B
Shareholders"), all in accordance with the following provisions of this Section
4(f).
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(i) The Selling Preferred Series B Shareholder shall
deliver a written notice ("Preferred Series B Stock Offering
Notice") to the other Preferred Series B Shareholders to sell
the Subject Preferred Series B Shares to the Preferred Series
B Shareholders pursuant to this Agreement, indicating the
number of Subject Preferred Series B Shares and the proposed
Purchase Price. Once the Preferred Series B Stock Offering
Notice is delivered, the offer by the Selling Preferred Series
B Shareholder may not be withdrawn prior to the expiration of
the options of the other Preferred Series B Shareholders, as
provided in this Section 4(f). Within 15 days from the receipt
of such Preferred Series B Stock Offering Notice, the other
Preferred Series B Shareholders may deliver to the Selling
Preferred Series B Shareholder written notice accepting the
offer in the Preferred Series B Stock Offering Notice,
pursuant to which each such other Preferred Series B
Shareholder may purchase no more than the number of shares
equal to the product of: (A) the total number of Subject
Preferred Series B Shares, multiplied by (B) the fraction
equal to the total number of Preferred Series B Shares owned
by such other Preferred Series B Shareholder divided by the
aggregate number of Preferred Series B Shares owned by all
other Preferred Series B Shareholders. Any such reply to the
Selling Preferred Series B Shareholder shall constitute an
agreement binding upon the Selling Preferred Series B
Shareholder and the Preferred Series B Shareholders delivering
such reply to sell and purchase the stated portion of the
Subject Preferred Series B Shares at the Purchase Price.
(ii) Any dispute concerning the calculation of the
Purchase Price shall be resolved by the Board of Directors of
the Company, excluding any member of the Board who is, or is a
director, officer, partner or stockholder of, the Selling
Preferred Series B Shareholder in the transaction for which
the Purchase Price is being determined; provided that if all
directors are excluded pursuant to the foregoing, such
disputes shall be submitted to binding arbitration as provided
in Exhibit B. The Purchase Price shall be paid in cash at the
closing.
If the Preferred Series B Shareholders do not elect to purchase all of
the Subject Preferred Series B Shares (such Subject Preferred Series B Shares
not being purchased are referred to herein as the "Remaining Subject Preferred
Series B Shares"), then the Selling Preferred Series B Shareholder shall cause
the proposed transferee (the "Proposed Preferred Series B Purchaser") to offer
in writing (a "Preferred Series B Sale Notice"), not less than 30 nor more than
120 days prior to the consummation of any proposed Disposition, to the Preferred
Series B Shareholders other than the Selling Preferred Series B Shareholder (the
"Tag Along Preferred Series B Shareholders") to purchase from each Tag Along
Preferred Series B Shareholder a number of the Preferred Series B Shares held by
each Tag Along Preferred Series B Shareholder equal to the product of: (i) the
total number of Remaining Subject Preferred Series B Shares which a proposed
transferee has offered to purchase, multiplied by (ii) the fraction equal to the
total number of Preferred Series B Shares which a Tag Along Preferred Series B
Shareholder
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owns, divided by the aggregate number of Preferred Series B Shares then
outstanding. The Preferred Series B Sale Notice shall set forth: (i) the name of
the Selling Preferred Series B Shareholder and the number of Subject Preferred
Series B Shares proposed to be transferred, (ii) the name and address of the
Proposed Preferred Series B Purchaser, (iii) the proposed amount and form of
consideration and terms and conditions of payment offered by such Proposed
Preferred Series B Purchaser and (iv) that the Proposed Preferred Series B
Purchaser has been informed of the tag along right provided for in this Section
4(f) and has agreed to purchase Preferred Series B Shares owned by any Tag Along
Preferred Series B Shareholder in accordance with the terms hereof. The tag
along right may be exercised by any Tag Along Preferred Series B Shareholder by
delivery of a written notice to the Proposed Preferred Series B Purchaser and
Selling Preferred Series B Shareholder (the "Preferred Series B Tag Along
Notice") within 30 days following its receipt of the Preferred Series B Sale
Notice. The Preferred Series B Tag Along Notice shall state the amount of
Preferred Series B Shares (the "Tag Along Preferred Series B Shares") that such
Tag Along Preferred Series B Shareholder proposes to include in such transfer to
the Proposed Preferred Series B Purchaser. To the extent that a Tag Along
Preferred Series B Shareholder accepts such tag along offer, the number of
Preferred Series B Shares to be sold to the Proposed Preferred Series B
Purchaser by the Selling Preferred Series B Shareholder shall be reduced to the
extent necessary to comply with this Section 4(f). In the event that the
Proposed Preferred Series B Purchaser does not purchase all Tag Along Preferred
Series B Shares from the Tag Along Preferred Series B Shareholders on the same
terms and conditions as specified in the Preferred Series B Sale Notice, then
the Selling Preferred Series B Shareholder shall not be permitted to sell any
Subject Preferred Series B Shares to the Proposed Preferred Series B Purchaser
in the proposed transfer. The closing of any purchase from the Tag Along
Preferred Series B Shareholders shall occur contemporaneously with the purchase
and sale of the Subject Preferred Series B Shares (as adjusted hereunder) or at
such other time as such Tag Along Preferred Series B Shareholders and the
Proposed Preferred Series B Purchaser shall agree.
If the other Preferred Series B Shareholders do not elect to purchase
all Subject Preferred Series B Shares, the Selling Preferred Series B
Shareholder shall, subject to the other provisions of this Section 4(f), be
freed and discharged, except as herein stated, from all obligations under the
terms of this Agreement other than to sell the remaining Subject Preferred
Series B Shares to the purchaser and at the price and upon the terms stated in
the Preferred Series B Offering Notice, but only if such sale shall be completed
within a period of 90 days from the date of delivery of the Preferred Series B
Offering Notice to the other Preferred Series B Shareholders. If the Selling
Preferred Series B Shareholder does not complete such sale within such 90 day
period, all the provisions of this Agreement, including the provisions of this
Section 4(f), shall apply to any future sale or offer for sale of such Preferred
Series B Shares owned by the Selling Preferred Series B Shareholder."
(b) The following shall be added as Section 4(g) of the Agreement:
"If any Shareholder desires to make a Disposition of any
Preferred Series C Shares owned or held by it pursuant to a bona fide offer
(other than in an Exempt Transfer), such
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Shareholder (for purposes of this Section 4(g), a "Selling Preferred Series C
Shareholder") shall offer such shares (the Preferred Series C Shares proposed to
be transferred being called the "Subject Preferred Series C Shares") for sale at
the Purchase Price to the other Shareholders who then own Preferred Series C
Shares ("Preferred Series C Shareholders"), all in accordance with the following
provisions of this Section 4(g).
(i) The Selling Preferred Series C Shareholder shall
deliver a written notice ("Preferred Series C Stock Offering
Notice") to the other Preferred Series C Shareholders to sell
the Subject Preferred Series C Shares to the Preferred Series
C Shareholders pursuant to this Agreement, indicating the
number of Subject Preferred Series C Shares and the proposed
Purchase Price. Once the Preferred Series C Stock Offering
Notice is delivered, the offer by the Selling Preferred Series
C Shareholder may not be withdrawn prior to the expiration of
the options of the other Preferred Series C Shareholders, as
provided in this Section 4(g). Within 15 days from the receipt
of such Preferred Series C Stock Offering Notice, the other
Preferred Series C Shareholders may deliver to the Selling
Preferred Series C Shareholder written notice accepting the
offer in the Preferred Series C Stock Offering Notice,
pursuant to which each such other Preferred Series C
Shareholder may purchase no more than the number of shares
equal to the product of: (A) the total number of Subject
Preferred Series C Shares, multiplied by (B) the fraction
equal to the total number of Preferred Series C Shares owned
by such other Preferred Series C Shareholder divided by the
aggregate number of Preferred Series C Shares owned by all
other Preferred Series C Shareholders. Any such reply to the
Selling Preferred Series C Shareholder shall constitute an
agreement binding upon the Selling Preferred Series C
Shareholder and the Preferred Series C Shareholders delivering
such reply to sell and purchase the stated portion of the
Subject Preferred Series C Shares at the Purchase Price.
(ii) Any dispute concerning the calculation of the
Purchase Price shall be resolved by the Board of Directors of
the Company, excluding any member of the Board who is, or is a
director, officer, partner or stockholder of, the Selling
Preferred Series C Shareholder in the transaction for which
the Purchase Price is being determined; provided that if all
directors are excluded pursuant to the foregoing, such
disputes shall be submitted to binding arbitration as provided
in Exhibit B. The Purchase Price shall be paid in cash at the
closing.
If the Preferred Series C Shareholders do not elect to purchase all of
the Subject Preferred Series C Shares (such Subject Preferred Series C Shares
not being purchased are referred to herein as the "Remaining Subject Preferred
Series C Shares"), then the Selling Preferred Series C Shareholder shall cause
the proposed transferee (the "Proposed Preferred Series C Purchaser") to offer
in writing (a "Preferred Series C Sale Notice"), not less than 30 nor more than
120 days prior to the consummation of any proposed Disposition, to the Preferred
Series C Shareholders other than the Selling Preferred Series C Shareholder (the
"Tag Along Preferred
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Series C Shareholders") to purchase from each Tag Along Preferred Series C
Shareholder a number of the Preferred Series C Shares held by each Tag Along
Preferred Series C Shareholder equal to the product of: (i) the total number of
Remaining Subject Preferred Series C Shares which a proposed transferee has
offered to purchase, multiplied by (ii) the fraction equal to the total number
of Preferred Series C Shares which a Tag Along Preferred Series C Shareholder
owns, divided by the aggregate number of Preferred Series C Shares then
outstanding. The Preferred Series C Sale Notice shall set forth: (i) the name of
the Selling Preferred Series C Shareholder and the number of Subject Preferred
Series C Shares proposed to be transferred, (ii) the name and address of the
Proposed Preferred Series C Purchaser, (iii) the proposed amount and form of
consideration and terms and conditions of payment offered by such Proposed
Preferred Series C Purchaser and (iv) that the Proposed Preferred Series C
Purchaser has been informed of the tag along right provided for in this Section
4(g) and has agreed to purchase Preferred Series C Shares owned by any Tag Along
Preferred Series C Shareholder in accordance with the terms hereof. The tag
along right may be exercised by any Tag Along Preferred Series C Shareholder by
delivery of a written notice to the Proposed Preferred Series C Purchaser and
Selling Preferred Series C Shareholder (the "Preferred Series C Tag Along
Notice") within 30 days following its receipt of the Preferred Series C Sale
Notice. The Preferred Series C Tag Along Notice shall state the amount of
Preferred Series C Shares (the "Tag Along Preferred Series C Shares") that such
Tag Along Preferred Series C Shareholder proposes to include in such transfer to
the Proposed Preferred Series C Purchaser. To the extent that a Tag Along
Preferred Series C Shareholder accepts such tag along offer, the number of
Preferred Series C Shares to be sold to the Proposed Preferred Series C
Purchaser by the Selling Preferred Series C Shareholder shall be reduced to the
extent necessary to comply with this Section 4(g). In the event that the
Proposed Preferred Series C Purchaser does not purchase all Tag Along Preferred
Series C Shares from the Tag Along Preferred Series C Shareholders on the same
terms and conditions as specified in the Preferred Series C Sale Notice, then
the Selling Preferred Series C Shareholder shall not be permitted to sell any
Subject Preferred Series C Shares to the Proposed Preferred Series C Purchaser
in the proposed transfer. The closing of any purchase from the Tag Along
Preferred Series C Shareholders shall occur contemporaneously with the purchase
and sale of the Subject Preferred Series C Shares (as adjusted hereunder) or at
such other time as such Tag Along Preferred Series C Shareholders and the
Proposed Preferred Series C Purchaser shall agree.
If the other Preferred Series C Shareholders do not elect to purchase
all Subject Preferred Series C Shares, the Selling Preferred Series C
Shareholder shall, subject to the other provisions of this Section 4(g), be
freed and discharged, except as herein stated, from all obligations under the
terms of this Agreement other than to sell the remaining Subject Preferred
Series C Shares to the purchaser and at the price and upon the terms stated in
the Preferred Series C Offering Notice, but only if such sale shall be completed
within a period of 90 days from the date of delivery of the Preferred Series C
Offering Notice to the other Preferred Series C Shareholders. If the Selling
Preferred Series C Shareholder does not complete such sale within such 90 day
period, all the provisions of this Agreement, including the provisions of this
Section 4(g), shall apply to any future sale or offer for sale of such Preferred
Series C Shares owned by the Selling Preferred Series C Shareholder."
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Section 3 CONSENT OF PREFERRED SERIES B SHAREHOLDER. Each Preferred
Series B Shareholder consents and agrees that dividends and other distributions
may be paid with respect to the Preferred Series C Shares, and the Preferred
Series C Shares may be redeemed as follows:
(a) While the Preferred Series C Shares are outstanding, the
Corporation shall be required to redeem Preferred Series B Shares pursuant to
Section 6(b) as if the first sentence of Section 6(b) was replaced with the
following two sentences:
"Following the closing of a Qualified Public Offering, the Corporation
shall redeem for cash, in the manner provided for in subsection (a), a
number of shares of Series B Preferred calculated by dividing the
Series B Excess Offering Proceeds by the Redemption Price of the Series
B Preferred. The Series B Excess Offering Proceeds shall equal the
Excess Offering Proceeds multiplied by a fraction the numerator of
which is the Stated Value plus per share accrued and unpaid dividends
on the Series B Preferred and the denominator of which is the Stated
Value plus per share accrued and unpaid dividends on the Series C
Preferred plus the Stated Value plus per share accrued and unpaid
dividends on the Series B Preferred.
(b) While the Preferred Series C Shares are outstanding,
distributions, dividends and the definition of Excess Offering Proceeds shall
include the term "plus Parity Securities" after the words Series B Preferred in
clause (ii) thereof and repurchases of Preferred Series B Shares and Parity
Stock shall be made as if Section 3(e) of the Certificate of Designations of
Preferred Stock for the Preferred Series B Shares read as follows:
(e) So long as any shares of Series B Preferred are
outstanding, no dividend or other distribution, whether in liquidation
or otherwise, shall be declared or paid, or set apart for payment on or
in respect of, any Junior Securities, nor shall any Junior Securities
be redeemed, purchased or otherwise acquired for any consideration
prior to the stated maturity thereof (or any money be paid to a sinking
fund or otherwise set apart for the purchase or redemption of any such
Junior Securities), without the prior consent of the holders of a
majority of the outstanding shares of Series B Preferred voting
together as a separate class. So long as any shares of Series B
Preferred are outstanding and without the prior consent of the holders
of a majority of the outstanding shares of Series B Preferred voting
together as a separate class, no dividend or other distribution,
whether in liquidation or otherwise, shall be declared or paid, or set
apart for payment on or in respect of, any Parity Securities, nor shall
any Parity Securities be redeemed, purchased or otherwise acquired for
any consideration prior to the stated maturity thereof (or any money be
paid to a sinking fund or otherwise set apart for the purchase or
redemption of any such Parity Securities), unless (i) if there are any
accrued and unpaid dividends on the Series B Preferred Stock or such
Parity Stock, such dividend or distribution shall be allocated to pay
such accrued and unpaid dividends the Series B Preferred and such
Parity Stock, pro rata based on the amount of such accrued and unpaid
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dividends and (ii) if all accrued and unpaid dividends have been paid
on the Series B Preferred and such Parity Stock, such dividends and
distributions shall be allocated pro rata to the holders of the Series
B Preferred and the Parity Stock based on the respective liquidation
preferences thereof.
(c) The Shareholders agree that the Preferred Series C Shares
are Parity Securities with the Preferred Series B Shares.
Section 4 EFFECTIVE DATE; BINDING EFFECT. This Amendment shall become
effective on the day the Company issues shares of Preferred Series C Shares as
provided in the Subscription Agreement, dated of even date, to which this
Amendment is attached as Exhibit C ("Subscription Agreement"). Following
effectiveness, each Investor and the Company by execution of this Agreement
shall be bound by and subject to the terms and obligations under the Agreement,
as amended by this Amendment. If this Amendment does not become effective within
six business days following the Expiration Date (as defined in the Subscription
Agreement) it shall become null and void and shall never take effect.
Section 5 NO OTHER CHANGES. Except as explicitly amended by the
Amendment, the terms, conditions, rights and obligations under the Agreement
shall remain in full force and effect.
Section 6 COUNTERPARTS. This Amendment may be executed by the parties
hereto in any number of counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date above first written.
XXXXX ENERGY COMPANY
By:
-----------------------------------
Xxxxxxxx X. Xxxxxxxx
President
--------------------------------------
B. Xxxx Xxxxx
--------------------------------------
Don Wm. Xxxxxxxx
ENERGY CAPITAL INVESTMENT COMPANY PLC
By:
-----------------------------------
Xxxx X. Xxxxxxxx
Director
ENCAP EQUITY 1994 LIMITED PARTNERSHIP
By:
-----------------------------------
D. Xxxxxx Xxxxxxxx
Managing Director
BER PARTNERSHIP L.P.
By: BOC Operating Company, Inc.
By:
-----------------------------------
Xxx X. Xxxx
President
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TJG INVESTMENTS, INC.
By:
-----------------------------------
Xxx X. Xxxx
President
BEC PARTNERSHIP
By:
-----------------------------------
Xxx X. Xxxx
Manager
--------------------------------------
Xxx X. Xxxx
--------------------------------------
Xxxxxx Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
BOC OPERATING COMPANY, INC.
By:
-----------------------------------
Xxx X. Xxxx
President
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ENCAP ENERGY CAPITAL FUND III-B, L.P.
By: EnCap Investments L.L.C., General Partner
By:
-----------------------------------
D. Xxxxxx Xxxxxxxx
Managing Director
BOCP ENERGY PARTNERS, L.P.
By: EnCap Investments L.L.C., Manager
By:
-----------------------------------
Xxxx X. Xxxxxxxx
Managing Director
ENCAP ENERGY CAPITAL FUND III, L.P.
By:
-----------------------------------
D. Xxxxxx Xxxxxxxx
Managing Director
XXXXX XXXXXXXX ENERGY FUND, L.P.
By: Xxxxx Xxxxxxxx Capital Advisors, L.P., its General Partner
By: Xxxxx Xxxxxxxx Investment Management, Inc., its General Partner
By:
-----------------------------------
Xxxxxx X. Xxxxxxxxx
Managing Director
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BANCAMERICA CAPITAL INVESTORS SBIC I, L.P.
By: BancAmerica Capital Management SBIC I, LLC, its general partner
By: BancAmerica Capital Management I, L.P., its sole member
By: BACM I GP, LLC, its general partner
By:
-----------------------------------
J. Xxxxxx Xxxx
Managing Director
EOS PARTNERS, L.P.
By:
-----------------------------------
Xxxxx X. Xxxxx
General Partner
EOS PARTNERS SBIC, L.P.
By: Eos SBIC General, L.P., its general partner
By: Eos SBIC, Inc., its general partner
By:
-----------------------------------
Xxxxx X. Xxxxx
President
EOS PARTNERS SBIC II, L.P.
By: Eos SBIC General II, L.P., its general partner
By: Eos SBIC II, Inc., its general partner
By:
-----------------------------------
Xxxxx X. Xxxxx
President
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SGC PARTNERS II LLC
By:
-----------------------------------
V. Xxxxx Xxxxxx
Managing Director
BANKERS TRUST COMPANY
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
