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EXHIBIT 99.1
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement"), dated as of May 12,
1998, is entered into by and between Coho Energy, Inc., a Texas corporation
(the "Company"), and Energy Investment Partnership No. 1, a Texas general
partnership (the "Holder").
RECITALS
WHEREAS, Holder intends to endeavor to make a further equity
investment in the Company; and
WHEREAS, Holder intends to assist the Company in raising funds to
pursue strategic acquisitions.
AGREEMENT
Now, therefor, in consideration of the premises, mutual covenants and
agreements hereinafter contained and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions.
"Advice" shall have the meaning provided in Section 3.5 hereof.
"Affiliate" means, with respect to any Person, any Person who, directly
or indirectly, controls, is controlled by or is under common control with that
Person.
"Affiliated Group", with respect to any Person, means such Person and
each Affiliate and Associate (within the meaning of Rule 12b-2 promulgated
under the Exchange Act) of such Person and each other Person with whom such
Person is acting "as a partnership, limited partnership, syndicate, or other
group for the purpose of acquiring, holding, or disposing of" shares (within
the meaning of Section 13(d)(3) of the Exchange Act, regardless of whether the
Company shall at any time be subject to the requirements of the Exchange Act).
"Agreement" means this Shareholder Agreement, as such from time to
time may be amended.
"Common Stock" means shares of the Common Stock, $0.01 par value per
share, of the Company, and any capital stock into which such Common Stock
thereafter may be changed.
"Common Stock Equivalents" means, without duplication with any other
Common Stock or Common Stock Equivalents, any rights, warrants, options,
convertible securities or indebtedness, exchangeable securities or
indebtedness, or other rights, exercisable for or convertible or exchangeable
into, directly or indirectly, Common Stock of the Company and securities
convertible or exchangeable into Common Stock of the Company, whether at the
time of issuance or upon the passage of time or the occurrence of some future
event.
"Company" shall have the meaning set forth in the introductory
paragraph hereof.
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"Demand Registration" shall have the meaning set forth in Section
3.1.1 hereof.
"Demand Request" shall have the meaning set forth in Section 3.1.1.
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Excluded Registration" means a registration under the Securities Act
of (i) securities registered on Form S-8 or any similar successor form and (ii)
securities registered to effect the acquisition of or combination with another
Person.
"Holder" shall have the meaning set forth in the introductory
paragraph hereof and shall include any direct or indirect transferee of the
Holder who shall elect to become a party to this Agreement. "Holders" shall
mean each Holder collectively. If at any time there is more than one Holder,
except as otherwise specifically set forth in this Agreement, any notices,
designations, consents, or similar actions to be taken by the Holder or Holders
hereunder shall be taken by Holders who own a majority of shares of Common
Stock owned by all Holders.
"Holder Designee" shall have the meaning provided in Section 2.1.1
hereof.
"Inspectors" shall have the meaning provided in Section 3.4 hereof.
"Material Adverse Effect" shall have the meaning provided in Section
3.1.4 hereof.
"NASD" shall have the meaning provided in Section 3.4 hereof.
"Other Registrable Shares" shall have the meaning provided in Section
3.1.4 hereof.
"Person" or "person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or other agency or political
subdivision thereof.
"Records" shall have the meaning provided in Section 3.4 hereof.
"Registrable Shares" means at any time the shares of Common Stock of
the Company owned by the Holder or Holders whether owned on the date hereof or
acquired hereafter; provided, however, that Registrable Shares shall not
include any shares (x) the sale of which has been registered pursuant to the
Securities Act and which shares have been sold pursuant to such registration,
or (y) which have been sold to the public pursuant to Rule 144 of the SEC under
the Securities Act.
"Registration Expenses" shall have the meaning provided in Section 3.6
hereof.
"Requesting Holder" shall have the meaning provided in Section 3.1.1
hereof.
"Required Filing Date" shall have the meaning provided in Section
3.1.1(b) hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
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"Seller Affiliates" shall have the meaning provided in Section 3.7.1
hereof.
"Subsidiary" of any Person means (i) a corporation a majority of whose
outstanding shares of capital stock or other equity interests with voting
power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person, by one or more subsidiaries of
such Person or by such Person and one or more subsidiaries of such Person, and
(ii) any other Person (other than a corporation) in which such Person, a
subsidiary of such Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination thereof, has (x)
at least a majority ownership interest or (y) the power to elect or direct the
election of the directors or other governing body of such Person.
"Suspension Notice" shall have the meaning provided in Section 3.5
hereof.
Section 1.2 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words
in the plural include the singular;
(4) provisions apply to successive events and
transactions; and
(5) "herein," "thereof" and other words of similar import
refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.
ARTICLE 2
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES
Section 2.1 Board of Directors.
2.1.1 Board Representation. Within five days following the purchase
by the Holder of all of the shares of Common Stock held by The Xxxxxx Xxxxxxx
Leveraged Equity Fund II, L.P. and Xxxxx Oil Company Ltd., the Company shall
cause two nominees of the Holder (each, a "Holder Designee") to be appointed or
elected to the Board of Directors of the Company and one such nominee
designated by the Holder to be appointed to the Compensation Committee and
Audit Committee of the Board of Directors and, if established, the Executive
Committee of the Board of Directors, such nominees to serve until the next
annual meeting of shareholders of the Company and until their respective
successors are elected and qualified or until their earlier death, resignation
or removal from office. The Company agrees to continue to cause two nominees
of the Holder or Holders to be nominated for election to the Board of Directors
of the Company at each annual meeting of the Company's shareholders thereafter.
The Holder agrees that no Holder Designee shall be a director or officer of an
independent exploration and production company that could reasonably be viewed
as a competitor of the Company. To the extent the Company's proxy statement
for any annual meeting of shareholders includes a recommendation regarding the
election of any other nominees to the Company's Board of Directors, the Company
agrees to include a recommendation of its Board of Directors that the
shareholders also vote in favor of the Holder's or Holders' nominees. The
Company shall appoint such designee or designees of the Holder or Holders
serving on the Company's Board of Directors to be a member of the Compensation
Committee and Audit Committee of the Board of Directors and, if established,
the Executive Committee of the Board of Directors. The Company shall ensure
that the articles of incorporation and bylaws
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of the Company as in effect immediately following the date hereof do not, at
any time thereafter, conflict in any respect with the provisions of this
Agreement.
2.1.2 Vacancies. If, prior to his election to the Board of
Directors of the Company pursuant to Section 2.1.1 hereof, any Holder Designee
shall be unable or unwilling to serve as a director of the Company, the Holder
or Holders shall be entitled to nominate a replacement who shall then be a
Holder Designee for purposes of this Section 2. If, following an election or
appointment to the Board of Directors of the Company pursuant to Section 2.1.1
hereof, any Holder Designee shall resign or be removed or be unable to serve
for any reason prior to the expiration of his term as a director of the
Company, the Holder or Holders shall, within 30 days of such event, notify the
Board of Directors of the Company in writing of a replacement Holder Designee,
and the Company shall cause such replacement Holder Designee to be appointed to
the Board of Directors of the Company and each applicable committee thereof to
fill the unexpired term of the Holder Designee who such new Holder Designee is
replacing.
2.1.3 Termination of Rights. The right of the Holder or Holders to
designate directors under Section 2.1.1 shall terminate upon the first to occur
of (i) the termination of this Agreement, (ii) such time as the Holder or
Holders elect in writing to terminate its or their rights under this Article 2,
or (iii) such time as both (A) Energy Investment Partnership No. 1 and its
Affiliates cease to own at least 1,000,000 shares of Common Stock (such number
of shares to be appropriately adjusted to reflect stock splits, stock
dividends, recapitalizations, or other changes to the Common Stock) and (B) any
Holder (and Affiliates thereof) that became a Holder by being a transferee of a
Holder shall not own at least 4% of the outstanding shares of Common Stock.
2.1.4 Costs and Expenses. The Company will pay all reasonable
out-of-pocket expenses incurred by the designees of the Holder or Holders in
connection with their participation in meetings of the Board of Directors (and
committees thereof) of the Company and the Boards of Directors (and committees
thereof) of the Subsidiaries of the Company.
2.2 Other Activities of the Holder; Fiduciary Duties. It is
understood and accepted that the Holder or Holders and their Affiliates have
interests in other business ventures which may be in conflict with the
activities of the Company and its Subsidiaries and that, subject to applicable
law, nothing in this Agreement shall limit the current or future business
activities of the Holder or Holders or their Affiliates whether or not such
activities are competitive with those of the Company and its Subsidiaries.
Nothing in this Agreement, express or implied, shall relieve any officer or
director of the Company (including any designee of a Holder pursuant to Section
2.1.1) or any of its Subsidiaries of any fiduciary or other duties or
obligations they may have to the Company's shareholders.
ARTICLE 3
REGISTRATION RIGHTS
Section 3.1 Demand Registration.
3.1.1 Request for Registration.
(a) At any time the Holder or Holders may request the
Company, in writing (a "Demand Request"), to effect the registration
under the Securities Act of all or part of its or their Registrable
Shares (a "Demand Registration"); provided that the Registrable Shares
proposed to be sold by the Holder or Holders requesting a Demand
Registration (the "Requesting Holders," which term shall
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include parties deemed "Requesting Holders" pursuant to Section 3.1.5
hereof) represent, in the aggregate, more than 20% of the total number
of Registrable Shares held by all Holders.
(b) Each Demand Request shall specify the number of
Registrable Shares proposed to be sold. Subject to Section 3.1.6, the
Company shall file the Demand Registration within 30 days after
receiving a Demand Request (the "Required Filing Date") and shall use
all commercially reasonable efforts to cause the same to be declared
effective by the SEC as promptly as practicable after such filing;
provided, that the Company need effect only three Demand
Registrations; provided, further, that if any Registrable Shares
requested to be registered pursuant to a Demand Request under this
Section 3.1 are excluded from a registration pursuant to Section 3.1.4
below, the Holders shall have the right, with respect to each such
exclusion, to one additional Demand Registration under this Section
3.1 with respect to such excluded Registrable Shares.
3.1.2 Effective Registration and Expenses. A registration will not
count as a Demand Registration until it has become effective (unless (i) the
Requesting Holders withdraw all their Registrable Shares, (ii) the Company has
performed its obligations hereunder in all material respects and (iii) there
has not been any event, change or effect which, individually or in the
aggregate, has had or would be reasonably likely to have a material adverse
effect on the business, operations, prospects, assets, condition (financial or
otherwise) or results of operations of the Company, in which case such demand
will count as a Demand Registration unless the Requesting Holders pay all
Registration Expenses, as hereinafter defined, in connection with such
withdrawn registration); provided, that if, after it has become effective, an
offering of Registrable Shares pursuant to a registration is interfered with by
any stop order, injunction, or other order or requirement of the SEC or other
governmental agency or court, such registration will be deemed not to have been
effected and will not count as a Demand Registration. Subject to the following
sentence, in the event that a Demand Request is made by a Holder that is
subsequently withdrawn by that Holder, all Registration Expenses incurred in
connection therewith shall be borne by that Holder and such withdrawn Demand
Request shall not be counted as a Demand Registration in determining the number
of Demand Registrations to which the Holders are entitled pursuant to Section
3.1.1(b). In the event that a Demand Request is made by a Holder that is
subsequently withdrawn by that Holder, all Registration Expenses shall be borne
by the Company if (i) the Company has not performed its obligations hereunder
in all material respects or (ii) there has been any event, change or effect
which, individually or in the aggregate, has had or would be reasonably likely
to have a material adverse effect on the business, operations, prospects,
assets, condition (financial or otherwise) or results of operations of the
Company; and in such case a withdrawn Demand Request shall not be counted as a
Demand Registration in determining the number of Demand Registrations to which
the Holders are entitled pursuant to Section 3.1.1(b).
3.1.3 Selection of Underwriters. The offering of Registrable Shares
pursuant to a Demand Registration shall be in the form of a "firm commitment"
underwritten offering. The Requesting Holders of a majority of the Registrable
Shares to be registered in a Demand Registration shall select the investment
banking firm or firms to manage the underwritten offering; provided that such
selection shall be subject to the consent of the Company, which consent shall
not be unreasonably withheld.
3.1.4 Priority on Demand Registrations. No securities to be sold
for the account of any Person (including the Company) other than a Requesting
Holder and the holders of the Other Registrable Shares shall be included in a
Demand Registration unless the managing underwriter or underwriters shall
advise the Requesting Holders in writing that the inclusion of such securities
will not materially and adversely affect the price or success of the offering
(a "Material Adverse Effect"). Furthermore, in the event the managing
underwriter or underwriters shall advise the Requesting Holders that even after
exclusion of all securities of other Persons pursuant to the immediately
preceding sentence, the amount of Registrable Shares proposed to be included in
such Demand Registration by Requesting Holders and the holders of the Other
Registrable
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Shares is sufficiently large to cause a Material Adverse Effect, the
Registrable Shares of the Requesting Holders and the holders of the Other
Registrable Shares to be included in such Demand Registration shall equal the
number of shares which the Requesting Holders are so advised can be sold in
such offering without a Material Adverse Effect and such shares shall be
allocated pro rata among the Requesting Holders and the holders of Other
Registrable Shares on the basis of the number of Registrable Shares held by the
Requesting Holders and the number of shares owned by holders of Other
Registrable Shares who have requested shares to be included in such
registration. The term "Other Registrable Shares" shall mean shares of Common
Stock that the Company has a contractual obligation to register the offer and
sale of in a Demand Registration pursuant to a validly existing registration
rights or similar agreement in effect on the date of this Agreement
(collectively the "Other Registration Rights Agreements").
3.1.5 Rights of Nonrequesting Holders. Upon receipt of any Demand
Request, the Company shall promptly (but in any event within 10 days) give
written notice of such proposed Demand Registration to all other Holders and
all holders of Other Registrable Shares, who shall have the right, exercisable
by written notice to the Company within 15 days of their receipt of the
Company's notice, to elect to include in such Demand Registration such portion
of their Registrable Securities with respect to Holders and Other Registrable
Shares with respect to holders of Other Registrable Shares as they may request.
All Holders requesting to have their Registrable Shares included in a Demand
Registration in accordance with the preceding sentence shall be deemed to be
"Requesting Holders" for purposes of this Section 3.1.
3.1.6 Deferral of Filing. The Company may defer the filing (but not
the preparation) of a registration statement required by Section 3.1 until a
date not later than 180 days after the Required Filing Date (or, if longer, 180
days after the effective date of the registration statement contemplated by
clause (ii) below) if (i) at the time the Company receives the Demand Request,
the Company or any of its Subsidiaries are engaged in confidential negotiations
or other confidential business activities, disclosure of which would be
required in such registration statement (but would not be required if such
registration statement were not filed), and the Board of Directors of the
Company determines in good faith that such disclosure would be materially
detrimental to the Company and its shareholders or would have a material
adverse effect on any such confidential negotiations or other confidential
business activities, or (ii) prior to receiving the Demand Request, the Board
of Directors had determined to effect a registered underwritten public offering
of the Company's securities for the Company's account and the Company had taken
substantial steps (including, but not limited to, selecting a managing
underwriter for such offering) and is proceeding with reasonable diligence to
effect such offering. A deferral of the filing of a registration statement
pursuant to this Section 3.1.6 shall be lifted, and the requested registration
statement shall be filed forthwith, if, in the case of a deferral pursuant to
clause (i) of the preceding sentence, the negotiations or other activities are
disclosed or terminated, or, in the case of a deferral pursuant to clause (ii)
of the preceding sentence, the proposed registration for the Company's account
is abandoned. In order to defer the filing of a registration statement
pursuant to this Section 3.1.6, the Company shall promptly (but in any event
within 10 days), upon determining to seek such deferral, deliver to each
Requesting Holder and each holder of Other Registrable Shares that requested
the inclusion of shares in the Demand Registration a certificate signed by an
executive officer of the Company stating that the Company is deferring such
filing pursuant to this Section 3.1.6 and a general statement of the reason for
such deferral and an approximation of the anticipated delay. Within 20 days
after receiving such certificate, the holders of a majority of the Registrable
Shares held by the Requesting Holders and for which registration was previously
requested may withdraw such Demand Request by giving notice to the Company; if
withdrawn, the Demand Request shall be deemed not to have been made for all
purposes of this Agreement. The Company may defer the filing of a particular
registration statement pursuant to this Section 3.1.6 only once.
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Section 3.2 Piggyback Registrations.
3.2.1 Right to Piggyback. Each time the Company proposes to
register any of its equity securities (other than pursuant to an Excluded
Registration) under the Securities Act for sale to the public (whether for the
account of the Company or the account of any securityholder of the Company) and
the form of registration statement to be used permits the registration of
Registrable Shares, the Company shall give prompt written notice to each Holder
of Registrable Shares (which notice shall be given not less than 30 days prior
to the effective date of the Company's registration statement), which notice
shall offer each such Holder the opportunity to include any or all of its or
his Registrable Shares in such registration statement, subject to the
limitations contained in Section 3.2.2 hereof. Each Holder who desires to have
its or his Registrable Shares included in such registration statement shall so
advise the Company in writing (stating the number of shares desired to be
registered) within 20 days after the date of such notice from the Company. Any
Holder shall have the right to withdraw such Holder's request for inclusion of
such Holder's Registrable Shares in any registration statement pursuant to this
Section 3.2.1 by giving written notice to the Company of such withdrawal.
Subject to Section 3.2.2 below, the Company shall include in such registration
statement all such Registrable Shares so requested to be included therein;
provided, however, that the Company may at any time withdraw or cease
proceeding with any such registration if it shall at the same time withdraw or
cease proceeding with the registration of all other equity securities
originally proposed to be registered.
3.2.2 Priority on Registrations. If the Registrable Shares
requested to be included in the registration statement by any Holder differ
from the type of securities proposed to be registered by the Company and the
managing underwriter advises the Company that due to such differences the
inclusion of such Registrable Shares would cause a Material Adverse Effect,
then (i) the number of such Holder's or Holders' Registrable Shares to be
included in the registration statement shall be reduced to an amount which, in
the judgment of the managing underwriter, would eliminate such Material Adverse
Effect or (ii) if no such reduction would, in the judgment of the managing
underwriter, eliminate such Material Adverse Effect, then the Company shall
have the right to exclude all such Registrable Shares from such registration
statement provided no other securities of such type are included and offered
for the account of any other Person in such registration statement. Any
partial reduction in number of Registrable Shares to be included in the
registration statement pursuant to clause (i) of the immediately preceding
sentence shall be effected pro rata based on the ratio which such Holder's
requested shares bears to the total number of shares requested to be included
in such registration statement by all Persons who have requested that their
shares be included in such registration statement. If the Registrable Shares
requested to be included in the registration statement are of the same type as
the securities being registered by the Company and the managing underwriter
advises the Company that the inclusion of such Registrable Shares would cause a
Material Adverse Effect, the Company will be obligated to include in such
registration statement, as to each Holder, only a portion of the shares such
Holder has requested be registered equal to the ratio which such Holder's
requested shares bears to the total number of shares requested to be included
in such registration statement by all Persons who have requested that their
shares be included in such registration statement. If the Company initiated
the registration, then the Company may include all of its securities in such
registration statement before any of such Holder's requested shares are
included. If another securityholder initiated the registration, then the
Company may not include any of its securities in such registration statement
unless all Registrable Shares requested to be included in the registration
statement by all Holders are included in such registration statement. If as a
result of the provisions of this Section 3.2.2 any Holder shall not be entitled
to include all Registrable Securities in a registration that such Holder has
requested to be so included, such Holder may withdraw such Holder's request to
include Registrable Shares in such registration statement. No Holder may
participate in any registration statement hereunder unless such Person (x)
agrees to sell such Person's Registrable Shares on the basis provided in any
underwriting arrangements approved by the Company and (y) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements, and other documents reasonably required under the terms of such
underwriting arrangements; provided, however, that no such Person shall be
required to make
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any representations or warranties in connection with any such registration
other than representations and warranties as to (i) such Person's ownership of
his or its Registrable Shares to be sold or transferred free and clear of all
liens, claims, and encumbrances, (ii) such Person's power and authority to
effect such transfer, and (iii) such matters pertaining to compliance with
securities laws as may be reasonably requested; provided further, however, that
the obligation of such Person to indemnify pursuant to any such underwriting
arrangements shall be several, not joint and several, among such Persons
selling securities, and the liability of each such Person will be in proportion
to, and provided further that such liability will be limited to, the net amount
received by such Person from the sale of his or its Registrable Shares pursuant
to such registration.
3.3 Holdback Agreement. Unless the managing underwriter otherwise
agrees, each of the Company and the Holders agrees, and the Company agrees, in
connection with any underwritten registration, to use its reasonable efforts to
cause its Affiliates to agree, not to effect any public sale or private offer
or distribution of any Common Stock or Common Stock Equivalents during the ten
business days prior to the effectiveness under the Securities Act of any
underwritten registration and during such time period after the effectiveness
under the Securities Act of any underwritten registration (not to exceed 120
days) (except, if applicable, as part of such underwritten registration) as the
Company and the managing underwriter may agree.
3.4 Registration Procedures. Whenever any Holder has requested
that any Registrable Shares be registered pursuant to this Agreement, the
Company will use its commercially reasonable efforts to effect the registration
and the sale of such Registrable Shares in accordance with the intended method
of disposition thereof, and pursuant thereto the Company will as expeditiously
as possible:
(i) prepare and file with the SEC a registration statement on any
appropriate form under the Securities Act with respect to such Registrable
Shares and use its commercially reasonable efforts to cause such registration
statement to become effective;
(ii) prepare and file with the SEC such amendments, post-effective
amendments, and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than 180 days (or such lesser
period as is necessary for the underwriters in an underwritten offering to sell
unsold allotments) and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(iii) furnish to each seller of Registrable Shares and the
underwriters of the securities being registered such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary
prospectus), any documents incorporated by reference therein and such other
documents as such seller or underwriters may reasonably request in order to
facilitate the disposition of the Registrable Shares owned by such seller or
the sale of such securities by such underwriters (it being understood that,
subject to Section 3.5 and the requirements of the Securities Act and
applicable state securities laws, the Company consents to the use of the
prospectus and any amendment or supplement thereto by each seller and the
underwriters in connection with the offering and sale of the Registrable Shares
covered by the registration statement of which such prospectus, amendment or
supplement is a part);
(iv) use its commercially reasonable efforts to register or qualify
such Registrable Shares under such other securities or blue sky laws of such
jurisdictions as the managing underwriter reasonably requests; use its
commercially reasonable efforts to keep each such registration or qualification
(or exemption therefrom) effective during the period in which such registration
statement is required to be kept effective; and do any and all other acts and
things which may be reasonably necessary or advisable to enable each seller to
consummate
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the disposition of the Registrable Shares owned by such seller in such
jurisdictions (provided, however, that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph or (B) consent to
general service of process in any such jurisdiction);
(v) promptly notify each seller and each underwriter and (if
requested by any such Person) confirm such notice in writing (A) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed and, with respect to a registration statement or any post-effective
amendment, when the same has become effective, (B) of the issuance by any state
securities or other regulatory authority of any order suspending the
qualification or exemption from qualification of any of the Registrable Shares
under state securities or "blue sky" laws or the initiation of any proceedings
for that purpose, and (C) of the happening of any event which makes any
statement made in a registration statement or related prospectus untrue or
which requires the making of any changes in such registration statement,
prospectus or documents so that they will not contain any 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, and, as promptly as
practicable thereafter, prepare and file with the SEC and furnish a supplement
or amendment to such prospectus so that, as thereafter deliverable to the
purchasers of such Registrable Shares, such prospectus will not contain any
untrue statement of a material fact or omit a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading;
(vi) if requested by the managing underwriter or any seller
promptly incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriter or any seller reasonably requests
to be included therein, including, without limitation, with respect to the
Registrable Shares being sold by such seller, the purchase price being paid
therefor by the underwriters and with respect to any other terms of the
underwritten offering of the Registrable Shares to be sold in such offering,
and promptly make all required filings of such prospectus supplement or
post-effective amendment;
(vii) as promptly as practicable after filing with the SEC of any
document which is incorporated by reference into a registration statement (in
the form in which it was incorporated), deliver a copy of each such document to
each seller;
(viii) cooperate with the sellers and the managing underwriter to
facilitate the timely preparation and delivery of certificates (which shall not
bear any restrictive legends unless required under applicable law) representing
securities sold under any registration statement, and enable such securities to
be in such denominations and registered in such names as the managing
underwriter or such sellers may request and keep available and make available
to the Company's transfer agent prior to the effectiveness of such registration
statement a supply of such certificates;
(ix) promptly make available for inspection by any seller, any
underwriter participating in any disposition pursuant to any registration
statement, and any attorney, accountant or other agent or representative
retained by any such seller or underwriter (collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents and properties
of the Company (collectively, the "Records"), as shall be reasonably necessary
to enable them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information requested
by any such Inspector in connection with such registration statement; provided,
that, unless the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in the registration statement or the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, the Company shall not be required to provide any
information under this subparagraph (x) if (A) the Company believes, after
consultation with counsel for the Company, that to do so would cause the
Company to forfeit an attorney-client privilege that was applicable to such
information or (B) if either (1) the Company has requested and been
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granted from the SEC confidential treatment of such information contained in
any filing with the SEC or documents provided supplementally or otherwise or
(2) the Company reasonably determines in good faith that such Records are
confidential and so notifies the Inspectors in writing unless prior to
furnishing any such information with respect to (A) or (B) such Holder of
Registrable Securities requesting such information agrees to enter into a
confidentiality agreement in customary form and subject to customary
exceptions; and provided, further that each Holder of Registrable Securities
agrees that it will, upon learning that disclosure of such Records is sought in
a court of competent jurisdiction, give notice to the Company and allow the
Company at its expense, to undertake appropriate action and to prevent
disclosure of the Records deemed confidential;
(x) furnish to each seller underwriter a signed counterpart of (A)
an opinion or opinions of counsel to the Company, and (B) a comfort letter or
comfort letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as the sellers or managing
underwriter reasonably requests;
(xi) cause the Registrable Shares included in any registration
statement to be (A) listed on each securities exchange, if any, on which
similar securities issued by the Company are then listed, or (B) authorized to
be quoted and/or listed (to the extent applicable) on the National Association
of Securities Dealers, Inc. Automated Quotation ("NASDAQ") or the NASDAQ
National Market System if the Registrable Shares so qualify;
(xii) provide a CUSIP number for the Registrable Shares included in
any registration statement not later than the effective date of such
registration statement;
(xiii) cooperate with each seller and each underwriter participating
in the disposition of such Registrable Shares and their respective counsel in
connection with any filings required to be made with the National Association
of Securities Dealers, Inc. ("NASD");
(xiv) during the period when the prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act;
(xv) notify each seller of Registrable Shares promptly of any
request by the SEC for the amending or supplementing of such registration
statement or prospectus or for additional information;
(xvi) prepare and file with the SEC promptly any amendments or
supplements to such registration statement or prospectus which, in the opinion
of counsel for the Company or the managing underwriter, is required in
connection with the distribution of the Registrable Shares;
(xvii) enter into such agreements (including underwriting agreements
in the managing underwriter's customary form) as are customary in connection
with an underwritten registration; and
(xviii) advise each seller of such Registrable Shares, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the SEC suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding for such purpose
and promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal at the earliest possible moment if such stop order
should be issued.
3.5 Suspension of Dispositions. Each Holder agrees by acquisition
of any Registrable Shares that, upon receipt of any notice (a "Suspension
Notice") from the Company of the happening of any event of the kind described
in Section 3.4(v)(C), such Holder will forthwith discontinue disposition of
Registrable Shares
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until such Holder's receipt of the copies of the supplemented or amended
prospectus, or until it is advised in writing (the "Advice") 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 in the
prospectus, and, if so directed by the Company, such Holder will deliver to the
Company all copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Shares current at the
time of receipt of such notice. In the event the Company shall give any such
notice, the time period regarding the effectiveness of registration statements
set forth in Section 3.4(ii) hereof shall be extended by the number of days
during the period from and including the date of the giving of the Suspension
Notice to and including the date when each seller of Registrable Shares covered
by such registration statement shall have received the copies of the
supplemented or amended prospectus or the Advice. The Company shall use its
commercially reasonable efforts and take such actions as are reasonably
necessary to render the Advice as promptly as practicable.
3.6 Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Article 3, including, without
limitation, (i) all registration and filing fees, (ii) all fees and expenses
associated with filings required to be made with the NASD (including, if
applicable, the fees and expenses of any "qualified independent underwriter" as
such term is defined in Schedule E of the By-Laws of the NASD, and of its
counsel), as may be required by the rules and regulations of the NASD, (iii)
fees and expenses of compliance with securities or "blue sky" laws (including
reasonable fees and disbursements of counsel in connection with "blue sky"
qualifications of the Registrable Shares), (iv) rating agency fees, (v)
printing expenses (including expenses of printing certificates for the
Registrable Shares in a form eligible for deposit with Depository Trust Company
and of printing prospectuses if the printing of prospectuses is requested by a
holder of Registrable Shares), (vi) messenger and delivery expenses, (vii) the
Company's internal expenses (including without limitation all salaries and
expenses of its officers and employees performing legal or accounting duties),
(viii) the fees and expenses incurred in connection with any listing of the
Registrable Shares, (ix) fees and expenses of counsel for the Company and fees
and expenses of the Company's independent certified public accountants
(including the expenses of any special audit or "cold comfort" letters required
by or incident to such performance), (x) securities acts liability insurance
(if the Company elects to obtain such insurance), (xi) the fees and expenses of
any special experts retained by the Company in connection with such
registration, (xii) the fees and expenses of other Persons retained by the
Company and (xiii) reasonable fees and expenses of one firm of counsel for the
sellers (which shall be selected by the holders of a majority of the
Registrable Shares being included in any particular registration statement)
(all such expenses being herein called "Registration Expenses"), subject to
Section 3.1.2, will be borne by the Company whether or not any registration
statement becomes effective; provided that, except as expressed otherwise
provided above, in no event shall Registration Expenses include any
underwriting discounts or commissions and transfer taxes.
3.7 Indemnification.
3.7.1 The Company agrees to indemnify and reimburse, to the fullest
extent permitted by law, each seller of Registrable Shares, and each of its
employees, advisors, agents, representatives, partners, officers, and directors
and each Person who controls such seller (within the meaning of the Securities
Act or the Exchange Act) and any agent or investment advisor thereof
(collectively, the "Seller Affiliates") (A) against any and all losses, claims,
damages, liabilities, and expenses, joint or several (including, without
limitation, attorneys' fees and disbursements except as limited by 3.7.3) based
upon, arising out of, related to or resulting from any untrue or alleged untrue
statement of a material fact contained in any registration statement,
prospectus, or preliminary prospectus relating to the offer and sale of
Registrable Shares, or any amendment thereof or supplement thereto, or any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, (B) against any and
all loss, liability, claim, damage, and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation
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or investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon, arising out of, related to
or resulting from any such untrue statement or omission or alleged untrue
statement or omission, and (C) against any and all costs and expenses
(including reasonable fees and disbursements of counsel) as may be reasonably
incurred in investigating, preparing, or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon, arising out of, related to or
resulting from any such untrue statement or omission or alleged untrue
statement or omission, to the extent that any such expense or cost is not paid
under subparagraph (A) or (B) above; except insofar as the same are made in
reliance upon and in strict conformity with information furnished in writing to
the Company by such seller or any Seller Affiliate for use therein or arise
from such seller's or any Seller Affiliate's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such seller or Seller Affiliate with a
sufficient number of copies of the same. The reimbursements required by this
Section 3.7.1 will be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.
3.7.2 In connection with any registration statement in which a
seller of Registrable Shares is participating, each such seller will furnish to
the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the fullest extent permitted by law, each such seller
will indemnify the Company and its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act or the Exchange
Act) against any and all losses, claims, damages, liabilities, and expenses
(including, without limitation, reasonable attorneys' fees and disbursements
except as limited by Section 3.7.3) resulting from any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement, prospectus, or any preliminary prospectus or any amendment thereof
or supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is contained in any information or
affidavit so furnished in writing by such seller or any of its Seller
Affiliates specifically for inclusion in the registration statement; provided
that the obligation to indemnify will be several, not joint and several, among
such sellers of Registrable Shares, and the liability of each such seller of
Registrable Shares will be in proportion to, and provided further that such
liability will be limited to, the net amount received by such seller from the
sale of Registrable Shares pursuant to such registration statement; provided,
however, that such seller of Registrable Shares shall not be liable in any such
case to the extent that prior to the filing of any such registration statement
or prospectus or amendment thereof or supplement thereto, such seller has
furnished in writing to the Company information expressly for use in such
registration statement or prospectus or any amendment thereof or supplement
thereto which corrected or made not misleading information previously furnished
to the Company.
3.7.3 Any Person entitled to indemnification hereunder will (A) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give such notice
shall not limit the rights of such Person) and (B) unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, however, that any Person
entitled to indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such Person unless (X) the
indemnifying party has agreed to pay such fees or expenses, or (Y) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such Person. If such defense is not
assumed by the indemnifying party as permitted hereunder, the indemnifying
party will not be subject to any liability for any settlement made by the
indemnified party without its consent (but such consent will not be
unreasonably withheld). If such defense is assumed by the indemnifying party
pursuant to the provisions hereof, such
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indemnifying party shall not settle or otherwise compromise the applicable
claim unless (1) such settlement or compromise contains a full and
unconditional release of the indemnified party or (2) the indemnified party
otherwise consents in writing. An indemnifying party who is not entitled to,
or elects not to, assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all parties indemnified by
such indemnifying party with respect to such claim.
3.7.4 Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 3.7.1 or Section 3.7.2 are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities, or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, liabilities, or expenses (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the actions
which resulted in the losses, claims, damages, liabilities or expenses as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or indemnified party, and
the parties, relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The parties hereto agree
that it would not be just and equitable if contribution pursuant to this
Section 3.7.4 were determined by pro rata allocation (even if the Holders or
any underwriters or all of them were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in this Section 3.7.4. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities,
or expenses (or actions in respect thereof) referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or, except as provided in
Section 3.7.3, defending any such action or claim. Notwithstanding the
provisions of this Section 3.7.4, no Holder shall be required to contribute an
amount greater than the dollar amount by which the proceeds received by such
Holder with respect to the sale of any Registrable Shares exceeds the amount of
damages which such Holder has otherwise been required to pay by reason of such
statement or omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations in this Section 3.7.4 to
contribute shall be several in proportion to the amount of Registrable Shares
registered by them and not joint.
If indemnification is available under this Section 3.7, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 3.7.1 and Section 3.7.2 without regard to the relative
fault of said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 3.7.4.
3.7.5 The indemnification and contribution provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director, or
controlling Person of such indemnified party and will survive the transfer of
securities.
3.8 Other Registration Rights. If compliance by the Company with
any provision of this Agreement would cause the Company to breach any
provisions of the Amended and Restated Registration Rights Agreement dated as
of December 8, 1994 by and among the Company, Xxxxxxx X. Xxxxxxx and Xxxxxxxxx
X. Xxxxxxxx (the "Xxxxxxx Agreement") or the Stock Purchase Warrant to Purchase
Shares of Common Stock of COHO ENERGY, INC. issued to Amoco Corporation on
December 18, 1997 (the "Amoco Warrant"), then the provisions set forth in the
Xxxxxxx Agreement or the Amoco Warrant, as applicable, shall control, and the
Company, in such case, shall not be deemed to be in breach of this Agreement
due to the Company's compliance with such provision in the Xxxxxxx Agreement or
the Amoco Warrant, as applicable,
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and the Company's failure to comply with the applicable provisions of this
Agreement. Except for as set forth in the Xxxxxxx Agreement or the Amoco
Warrant, as applicable, no holder of Other Registrable Shares has priority
rights for inclusion in a Demand Registration that are inconsistent with the
terms of this Agreement. The Company shall not grant or amend any registration
rights after the date of this Agreement that would in any way diminish the
rights of the Holders hereunder, and any such registration rights shall be
granted or amended only if such rights are subordinate to or pari passu with the
rights of the Holders hereunder.
ARTICLE 4
TERMINATION
The provisions of this Agreement, unless earlier terminated pursuant
to their terms, shall terminate on the twentieth anniversary of the date of
this Agreement.
ARTICLE 5
LIMITATIONS ON CERTAIN TRANSACTIONS
Section 5.1 Limitations on Certain Transactions. Each Holder,
severally and not jointly, covenants and agrees with the Company that, for the
period commencing on the date hereof and terminating two years thereafter, it
will not, directly or indirectly, except as specifically permitted by this
Article 5 or unless specifically requested or permitted in writing by the
Company's Board of Directors:
(a) deposit any shares of Common Stock in a voting trust
or grant any proxy with respect to any shares of Common Stock to any Person not
designated by the Company or subject any shares of Common Stock to any
arrangement or agreement with respect to the voting of such shares of Common
Stock; or
(b) act with one or more Persons (other than another
Holder or any Affiliate or partner of a Holder) as a partnership, limited
partnership, syndicate or "group" (as such term is used in Section 13(d)(3) of
the Exchange Act) for the purpose of acquiring, holding, voting or disposing of
shares of Common Stock.
No Holder shall, prior to the second anniversary hereof, directly or
indirectly, (i) sell or transfer, or offer to sell or transfer, shares of
Common Stock that represent more than 10% of the fully diluted common equity of
the Company to any single Person or Affiliated Group or (ii) sell or transfer,
or offer to sell or transfer, to any holder of 10% of the outstanding shares of
Common Stock, shares of Common Stock that represent more than 5% of the
outstanding Common Stock of the Company; provided, that the foregoing
prohibition shall not apply to sales or transfers (i) to any investment banking
firm acting as an underwriter pursuant to a public offering conducted in
accordance with Article 3, (ii) pursuant to a tender or exchange offer by any
Person with respect to which the Board of Directors of the Company shall have
recommended acceptance or shall have taken no position or (iii) pursuant to a
merger or other business combination involving the Company.
Section 5.2 Restrictive Legends.
(a) Each certificate representing restricted securities
(as defined in Rule 144 promulgated under the Securities Act) shall be
stamped with the following legend:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
CONVEYED EXCEPT IN COMPLIANCE THEREWITH.
(b) Each certificate representing shares of Common Stock
shall also be stamped with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF AN AGREEMENT BETWEEN CERTAIN SHAREHOLDERS
AND THE CORPORATION WHICH INCLUDES RESTRICTIONS ON CERTAIN SALES OF
THE SECURITIES. COPIES OF THE AGREEMENT MAY BE OBTAINED UPON WRITTEN
REQUEST TO THE SECRETARY OF THE CORPORATION.
(c) Each Holder consents to the Company's making a
notation on its records and giving instructions to any transfer agent
of the shares of Common Stock to implement the restrictions on
transfers established in this Agreement.
(d) In the event that any shares referred to in Section
5.2(a) shall cease to be restricted securities, the Company shall,
upon the written request of the holder thereof, issue to such holder a
new certificate evidencing such shares without the first paragraph of
the legend required by Section 5.2(a) endorsed thereon. In the event
that any shares referred to in Section 5.2(a) shall cease to be
subject to the restrictions on transfer set forth in this Agreement,
the Company shall, upon the written request of the holder thereof,
issue to such holder a new certificate evidencing such shares without
the second paragraph of the legend required by Section 5.2(a).
Section 5.3 Rule 144. The Company shall take all commercially
reasonable actions necessary to enable a Holder of Registrable Shares to sell
such securities without registration under the Securities Act pursuant to the
provisions of Rule 144. Upon the request of any Holder of Registrable Shares,
the Company will deliver to such Holder a written statement as to whether it
has complied with such requirements.
ARTICLE 6
RESOLUTION OF DISPUTES
Section 6.1 Resolution of Disputes between the Parties.
(a) Negotiation. The parties shall attempt in good faith
to resolve any dispute arising out of or relating to this Agreement
promptly by negotiations between executives who have authority to
settle the controversy. Any party may give the other party written
notice of any dispute not resolved in the normal course of business.
Within five days after the effective date of such notice, executives
of the parties shall agree upon a mutually acceptable time and place
to meet and shall meet at such time and place, and thereafter as often
as they reasonably deem necessary, to exchange relevant information
and to attempt to resolve the dispute. The first of such meetings
shall take place within 7 days of the effective date of the disputing
party's notice. If the matter has not been resolved within 60 days of
the disputing party's notice, or if the parties fail to agree on a
time and place for an initial meeting within five days of such notice,
either party may initiate mediation of the controversy or claim as
provided hereinafter. If a negotiator intends to be accompanied at a
meeting by an attorney, the other negotiator shall be given at least
three business days' notice of such intention and may also be
accompanied by an attorney. All negotiations pursuant to this Section
6.1 shall be treated as
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compromise and settlement negotiations for the purposes of federal and
state rules of evidence and procedure.
(b) Mediation. If the dispute has not been resolved by
negotiation as provided herein, the parties may endeavor to settle the
dispute by mediation under the then current CPR Model Procedure for
Mediation of Business Disputes. The neutral third party shall be
selected by the parties from the CPR Panels of Neutrals. If the
parties encounter difficulty in agreeing upon a neutral third party,
they shall seek the assistance of CPR in the selection process.
(c) Arbitration. Any dispute arising out of or relating
to this Agreement or the breach, termination or validity hereof or
thereof, which has not been resolved by non-binding procedures as
provided in Sections 6.1(a) or 6.1(b) hereof within 60 days of the
initiation of either or both of such procedures, shall be finally
settled by arbitration conducted expeditiously in accordance with the
CPR Rules for Non-Administered Arbitration of Business Disputes;
provided that if one party has requested the other to participate in a
non-binding procedure and the other has failed to participate, the
requesting party may initiate arbitration before the expiration of
such period. The arbitration shall be conducted by three independent
and impartial arbitrators. Each party shall appoint one arbitrator
and a third arbitrator not appointed by the parties shall be appointed
from the CPR Panels of Neutrals. The arbitration shall be governed by
the United States Arbitration Act and any judgment upon the award
decided upon by the arbitrators may be entered by any court having
jurisdiction thereof. The arbitrators are not empowered to award
damages in excess of compensatory damages and each party hereby
irrevocably waives any damages in excess of compensatory damages.
Each party hereby acknowledges that compensatory damages include
(without limitation) any benefit or right of indemnification given by
another party to the other under this Agreement. Any arbitration
conducted pursuant to this Section 6.1(c) shall be held at a mutually
acceptable location in Dallas, Texas, the United States of America.
6.2 Consent to Jurisdiction and Venue. Each of the parties hereby
(a) irrevocably submits to the exclusive jurisdiction of the United States
Federal District Court for the Northern District of Texas, sitting in Dallas
County, Texas, the United States of America, for the purposes of any suit,
action or proceeding arising out of or relating to this Agreement, (b) waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
(i) it is not personally subject to the jurisdiction of such court or of any
other court to which proceedings in such court may be appealed, (ii) such suit,
action or proceeding is brought in an inconvenient forum or (iii) the venue of
such suit, action or proceeding is improper and (c) expressly waives any
requirement for the posting of a bond by the party bringing such suit, action
or proceeding. Each of the parties consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices hereunder, and agrees that such services shall
constitute good and sufficient service of process and notice thereof. Nothing
in this Section 6.2 shall affect or limit any right to serve process in any
other manner permitted by law.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Notices. Any notices or other communications
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as follows
(or at such other address as may be substituted by notice given as herein
provided):
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If to the Company:
Coho Energy, Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
If to any Holder, at its address listed on the signature pages hereof.
Any notice or communication hereunder shall be deemed to have been
given or made as of the date so delivered if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and
five calendar days after mailing if sent by registered or certified mail
(except that a notice of change of address shall not be deemed to have been
given until actually received by the addressee).
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
Section 7.2 Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 7.3 Successors and Assigns. Whether or not an express
assignment has been made pursuant to the provisions of this Agreement,
provisions of this Agreement that are for the Holders' benefit as the holders
of any securities are also for the benefit of, and enforceable by, all
subsequent holders of securities and such subsequent holders shall be deemed to
be Holders and to have become parties to this Agreement, except as otherwise
expressly provided herein. This Agreement shall be binding upon the Company,
each Holder, and their respective successors and assigns; provided, however,
any transferee of a Holder may elect in writing, at the time of the transfer,
to not be a Holder hereunder, in which case such transferee shall not be
entitled to any benefits of, nor subject to any obligations under, this
Agreement. A Holder shall notify the Company in writing of the number of
shares of Common Stock transferred and the name, address and telephone and
facsimile numbers of any transferror in advance of such transfer.
Section 7.4 Duplicate Originals. All parties may sign any number
of copies of this Agreement. Each signed copy shall be an original, but all of
them together shall represent the same agreement.
Section 7.5 Severability. In case any provision in this
Agreement shall be held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and the remaining provisions shall not in any way be
affected or impaired thereby.
Section 7.6 Specific Performance. The Company and the Holder or
Holders recognize that if the Company refuses to perform under the provisions
of this Agreement, monetary damages alone will not be adequate to compensate
the Holder or Holders for its or their injury. The Holder or Holders shall
therefore be entitled, in addition to any other remedies that may be available,
to obtain specific performance of the terms of this Agreement.
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Section 7.7 No Waivers; Amendments.
7.7.1 No failure or delay on the part of the Company or any Holder
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
any Holder at law or in equity or otherwise.
7.7.2 Any provision of this Agreement may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Company and the Holders holding a majority of the Registrable Shares.
Section 7.8 Partner Liability. The partners of a Holder shall
not have any personal liability or obligation to any Person arising under this
Agreement; provided that this sentence shall not relieve any designee of a
Holder pursuant to Section 2.1.1 of any liability that may result from a breach
of a director's fiduciary duty to the Company's shareholders.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURES TO SHAREHOLDER AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the date first written above.
COHO ENERGY, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
ENERGY INVESTMENT PARTNERSHIP NO. 1
By:
----------------------------------------
Name:
--------------------------------------
Title: Co-Managing Partner
Address:
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
