Exhibit 99(c)
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is made and entered into
effective February 28, 2005, by and among OCM GW Holdings, LLC, a Delaware
limited liability company ("Seller"), ▇▇▇▇▇ ▇▇▇▇ ("▇▇▇▇"), and certain other
individuals as set forth on the signature page hereto (collectively with Keel,
"Purchasers" and, individually, a "Purchaser").
WITNESSETH:
WHEREAS, Seller owns in the aggregate 81,000 shares of the Series G
Convertible Preferred Stock, par value $0.01 per share (the "Preferred Stock"),
of GulfWest Energy Inc. (the "Company").
WHEREAS, Seller desires to sell to the Purchasers and the Purchasers
desire to purchase from Seller 4,300 shares of the Preferred Stock, in the
amounts set forth opposite such individual's name on Exhibit A, and on the date
set forth above Seller has committed to sell, and Purchasers have committed to
Buy, such amounts.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties, intending to be legally bound,
hereby agree as follows:
1. Sale of Stock. Subject to the terms and conditions of this Agreement, and the
representations and warranties herein contained, Seller hereby agrees to sell,
and each Purchaser, severally and not jointly, hereby agrees to purchase, the
shares of Preferred Stock (the "Preferred Shares") as set forth on Exhibit A for
the consideration hereinafter described.
2. Consideration. The purchase price to be paid by Purchasers and received by
Seller for the Preferred Shares shall be $500.00 per share (the "Purchase
Price") payable in accordance with Section 3(B). Each Purchaser shall pay that
portion of the Purchase Price set forth on Exhibit A opposite such Purchaser's
name.
3. Closing.
(A) Closing Date. The closing (the "Closing") shall take place at the
offices of Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. The date of the Closing shall be February 28, 2005
and shall herein be referred to as the "Closing Date."
(B) Payment of Purchase Price. The Purchase Price shall be payable to
Seller as set forth on Exhibit A at the Closing in the form of wire transfers or
other method as may reasonably acceptable to Seller of immediately available
funds in the appropriate amounts by each Purchaser to Seller to the account of
Seller, written notice of which account shall have been provided to Purchasers.
(C) Seller's Closing Documents. Seller shall deliver, or cause to be
delivered, to the Purchasers at Closing stock certificates for the applicable
number of shares purchased hereunder accompanied by appropriate stock transfer
powers duly executed by Seller.
1
(D) Purchaser's Closing Documents. Each Purchaser shall deliver, or
cause to be delivered, to Seller at the Closing that portion of the Purchase
Price owed by such Purchaser to Seller as set forth on Exhibit A.
(E) Each Purchaser's Obligations to Close Independent. The failure of
any Purchaser to perform the transactions contemplated hereby shall not affect
any other Purchaser's obligation to close on the Closing Date or to be bound by
the provisions of this Agreement.
4. Representations, Warranties and Covenants of Purchasers. Each Purchaser,
individually and not jointly, hereby represents and warrants and covenants to
Seller as of the Closing Date, as follows:
(A) Purchaser has full legal power, right and authority to execute this
Agreement and to perform his obligations hereunder and has taken all actions
necessary to authorize the execution and delivery of this Agreement, the
performance of Purchaser's obligations hereunder, and the consummation of the
transactions contemplated herein.
(B) The execution and delivery of this Agreement and the consummation
of the transactions contemplated herein will not (i) conflict with, result in a
breach or violation of any of the terms or provisions of, or constitute (or with
due notice or lapse of time or both would constitute) a default under, or give
rise to any right of termination, acceleration or cancellation under, any
indenture, agreement, contract, license, arrangement, understanding, evidence of
indebtedness, note, lease or other instrument to which Purchaser or any of his
properties is bound, (ii) result in the violation of any statute, law, order,
rule or regulation applicable to Purchaser of any court or of any regulatory
body or administrative agency or other governmental body having jurisdiction,
(iii) result in the creation or imposition of any lien or encumbrance upon
Purchaser or any of his properties, or (iv) require any consent, approval,
notification, waiver or other similar action from any third party.
(C) Purchaser is an "accredited investor" within the meaning of Rule
501 of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act");
(D) Purchaser has sufficient knowledge and experience in investing in
companies similar to the Company in terms of the Company's stage of development
so as to be able to evaluate the risks and merits of Purchaser's investment in
the Company and it is able financially to bear the risks thereof;
(E) Purchaser has received or has had full access to all the
information it considers necessary or appropriate to make an informed investment
decision with respect to the Preferred Shares to be purchased by Purchaser under
this Agreement;
(F) Purchaser further has had an opportunity to ask questions and
receive answers from the Company and/or Seller regarding the terms and
conditions of the offering of the Preferred Shares and to obtain additional
information necessary to verify any information furnished to Purchaser or to
which Purchaser had access;
2
(G) the Preferred Shares being purchased by Purchaser are being
acquired for Purchaser's own account for the purpose of investment and not with
a view to, or for resale in connection with, any distribution thereof within the
meaning of the Securities Act;
(H) Purchaser understands that (i) the Preferred Shares have not been
registered under the Securities Act because of their issuance in a transaction
exempt from the registration requirements of the Securities Act, (ii) the
Preferred Shares must be held indefinitely unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from such
registration, and (iii) the Preferred Shares will bear the legends to such
effect set forth in (J);
(I) Without in any way limiting the representations set forth above,
Purchaser agrees not to make any disposition of all or any portion of the
Preferred Shares unless and until: (i) there is then in effect a registration
statement under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement; or (ii)
Purchaser has notified the Company of the proposed disposition and has furnished
the Company with a statement of the circumstances surrounding the proposed
disposition and any other required documentation, and, at the expense of the
Company, in the case of clause (ii), an opinion of counsel if required by the
Company in its discretion;
(J) Accordingly, each Purchaser acknowledges that a copy of this
Agreement has been delivered to the Company and that Seller has requested of
Company that the certificates evidencing the Preferred Shares purchased
hereunder will bear a legend substantially similar to the following:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL (WHICH
MAY BE COUNSEL FOR THE COMPANY) IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
SUBSCRIPTION AGREEMENT, DATED FEBRUARY 28, 2005, WHICH PROVIDES,
AMONG OTHER THINGS, FOR CERTAIN RESTRICTIONS ON THE TRANSFER OF SUCH
SHARES. NO REGISTRATION OR TRANSFER OF ANY SHARES REPRESENTED BY THIS
CERTIFICATE WILL BE MADE ON THE COMPANY'S BOOKS UNLESS SUCH
RESTRICTIONS HAVE BEEN COMPLIED WITH. A COPY OF SUCH AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICES OF GULFWEST ENERGY INC. AND WILL BE
FURNISHED UPON REQUEST TO ANY HOLDER OF THE SHARES REPRESENTED BY
THIS CERTIFICATE.
3
5. Representations and Warranties of Seller. Seller hereby represents and
warrants to Purchasers as of the Closing Date, as follows:
(A) Seller has the relevant entity power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. Seller has
taken all actions necessary to authorize the execution and delivery of the
Agreement, the performance of Seller's obligations hereunder, and the
consummation of the transactions contemplated herein.
(B) Subject to the accuracy of each Purchaser's representations in
Section 4, the execution and delivery of this Agreement and the consummation of
the transactions contemplated herein will not (a) conflict with, result in a
breach or violation of any of the terms or provisions of, or constitute (or with
due notice or lapse of time or both would constitute) a default under, or give
rise to any right of termination, acceleration or cancellation under, any
indenture, agreement, contract, license, arrangement, understanding, evidence of
indebtedness, note, lease or other instrument to which Seller or any of its
properties is bound, (b) result in the violation of any statute, law, order,
rule or regulation applicable to Seller of any court or of any regulatory body
or administrative agency or other governmental body having jurisdiction, (c)
result in the creation or imposition of any lien or encumbrance upon Seller or
any of its properties, or (d) require any consent, approval, notification,
waiver or other similar action from any third party.
6. Conditions Precedent to Obligations of Seller. The obligations of Seller
hereunder are subject to the following conditions precedent:
(A) Performance. Each covenant and agreement of each Purchaser set
forth in this Agreement to be performed on or before the Closing Date shall have
been duly performed in all material respects.
(B) No Violation of Statutes, Orders, etc. There shall not be in effect
any statute, rule, or regulation which makes it illegal for Seller to consummate
the transactions contemplated hereby, or any order, decree, or judgment
enjoining Seller from consummating the transactions contemplated hereby.
(C) Representations and Warranties True and Correct. The
representations and warranties of each Purchaser contained in this Agreement
shall have been true and correct in all material respects.
7. Conditions Precedent to Obligations of the Purchasers. The obligations of the
Purchasers hereunder are subject to the following conditions precedent:
(A) Performance. Each covenant and agreement of Seller set forth in
this Agreement to be performed on or before the Closing Date shall have been
duly performed in all material respects.
(B) No Violation of Statutes, Orders, etc. There shall not be in effect
any statute, rule, or regulation which makes it illegal for such Purchaser to
consummate the transactions contemplated hereby, or any order, decree, or
judgment enjoining consummation of the transactions contemplated hereby.
4
(C) Representations and Warranties True and Correct. The representations and
warranties of Seller contained in this Agreement shall have been true and
correct in all material respects.
8. Indemnification.
(A) Each Purchaser, severally and not jointly, shall indemnify and hold
Seller and its officers, directors, agents, attorneys, employees and affiliates
harmless from any damage, claim, liability or expense, including, without
limitation, reasonable attorneys' fees (collectively "Damages"), arising out of
or relating to the breach of any warranty, representation, covenant or agreement
of such Purchaser contained in this Agreement.
(B) Seller shall indemnify and hold each Purchaser and their respective
agents, attorneys, employees and affiliates harmless from any Damages arising
out of or relating to the breach of any warranty, representation, covenant or
agreement of Seller contained in this Agreement.
9. Transfers of Preferred Stock.
(A) Keel agrees that he shall not, directly or indirectly, in one
transaction or a series of related transactions, for a period of two years from
the date hereof, transfer, sell, assign, mortgage, hypothecate, pledge, create a
security interest in or lien upon, encumber, donate, contribute, place in trust
(including a voting trust) or otherwise voluntarily or involuntarily dispose of
("Transfer") any of Keel's Preferred Stock unless such Transfer (i) is effected
in accordance with Sections 9, 10, or 11 or (ii) constitutes a Permitted
Transfer, subject to the prior written consent of the Oaktree Parties which may
be granted or withheld in their sole and absolute discretion. After the
expiration of such two year period, Transfers of Preferred Stock shall be
subject to Section 12; to the extent Section 12 would not apply to a Transfer of
Preferred Stock, Keel agrees that any transferee receiving Preferred Stock must
agree in writing to be bound by all of the provisions and conditions of this
Agreement as a party hereto in the capacity of Keel.
"Oaktree Parties" means Oaktree Capital Management, LLC,
Seller, OCM Principal Opportunities Fund III, L.P., OCM Principal Opportunities
Fund IIIA, L.P. and each of their respective Permitted Transferees and
affiliates.
"Permitted Transfer" means the Transfer of Preferred Stock to
a Permitted Transferee who has agreed in writing to be bound by all of the
provisions and conditions of this Agreement as a party hereto in the capacity of
a Purchaser.
"Permitted Transferee" means (a) as to a Person other than a
natural Person, (i) any general partner or managing member of such Person, or
(ii) any partnership, limited partnership, limited liability company,
corporation or other entity organized, formed or incorporated and managed or
controlled by such Person, its general partner or managing member as a vehicle
for purposes of making investments and (b) as to any natural Person, (i) such
Person's spouse, his siblings, or other immediate family members or any of their
respective lineal descendants ("Beneficiaries"), (ii) any trust, corporation,
limited liability company, partnership or other entity which was organized,
formed or incorporated for the benefit of such Person's Beneficiaries and whose
voting control is vested in such Person or its Beneficiaries or in a Person
reasonably acceptable to the Oaktree Parties, or (iii) any bona fide recognized
charity or charitable organization.
5
"Person" means any natural Person, corporation, limited
liability company, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, and
any government or agency or political subdivision thereof.
(B) Any purported Transfer of the Preferred Stock by Keel in
contravention of this Agreement shall be null and void and of no force and
effect whatsoever.
(C) The foregoing notwithstanding, except as contemplated by Section 11
or 12, in no event shall any of the following constitute a Transfer of shares of
Preferred Stock for purposes of Section 9 or be subject to the terms hereof: (i)
an exchange, reclassification or other conversion of all shares of Preferred
Stock on an equivalent basis into any cash, securities or other property
pursuant to a merger, consolidation or recapitalization of the Company or any of
its subsidiaries (and in which event the rights and obligations of the parties
shall survive such merger, consolidation or recapitalization, as the case may
be) with, or Transfer by the Company or any of its subsidiaries of all or
substantially all its assets to, any Person; or (ii) an exercise, exchange,
redemption or conversion of Preferred Stock into shares of common stock in
accordance with the terms thereof.
10. Tag Along Rights.
(A) If Seller and/or any Oaktree Party proposes to Transfer any shares
of Preferred Stock (such Person or Persons, "Transferor"), which represent more
than 10% of the common stock outstanding on a fully diluted basis as of such
date, in a single transaction or series of related transactions (a "Tag Along
Transaction"), to any third party other than another Oaktree Party, then such
Transferor shall offer (a "Tag Along Offer") to each Purchaser the right to
include in such proposed sale a number of shares of Preferred Stock, not to
exceed, in respect of any such Purchaser, that number of shares of Preferred
Stock determined by application of the following formula: (i) the number of all
shares of Preferred Stock to be sold by the Transferor in the Tag Along
Transaction, multiplied by (ii)(A) the number of shares of Preferred Stock held
by such Purchaser divided by (B) the number of shares of Preferred Stock held by
all Purchasers that elect to sell in the Tag Along Transaction, plus those of
the Transferor.
(B) The Transferor shall give written notice to each Purchaser of the
Tag Along Offer (the "Tag Along Notice") at least 20 days before the expected
consummation of the Tag Along Transaction. The Tag Along Notice shall specify
the proposed transferee, the number of shares of Preferred Stock to be
transferred to such transferee, the amount and type of consideration to be
received therefor and the place and date on which the Tag Along Transaction is
to be consummated. Each Purchaser who wishes to include shares in the Tag Along
Transaction in accordance with the terms of this Section 10 shall so notify the
Transferor not more than 10 days after its receipt of the Tag Along Notice. The
Tag Along Offer shall be conditioned upon the Transferor's Transfer of shares of
Preferred Stock in the Tag Along Transaction and with the transferee named
therein. If any Purchaser accepts the Tag Along Offer (each such Purchaser, a
"Tag Along Seller"), the Transferor shall reduce to the extent necessary the
number of shares of such Preferred Stock it otherwise would have sold in the Tag
Along Transaction so as to permit each Tag Along Seller to Transfer the number
of shares of such Preferred Stock that they are entitled to Transfer under this
Section 10, and the Transferor and each Tag Along Seller shall Transfer the
number of shares of such Preferred Stock specified in the Tag Along Offer to the
proposed transferee in accordance with the terms of the Tag Along Transaction
set forth in the Tag Along Notice and receive the same consideration per share.
6
(C) Only shares of Preferred Stock may be included in a Tag Along
Transaction.
(D) No Transfer may be made by the Transferor under this Section 10
unless, contemporaneously therewith, all Tag Along Sellers electing to
participate in such Tag Along Transaction receive the amounts to which they are
entitled under this Section 10. Each Tag Along Seller pursuant to this Section
10 shall be obligated to join on a pro rata basis (based on the number of shares
of Preferred Stock to be sold) in any indemnification or other obligations that
are part of the terms and conditions of such Tag Along Transaction (other than
any such obligations that relate specifically to a particular Purchaser, such as
indemnification with respect to representations and warranties given by a
Purchaser regarding such Purchaser's title to and ownership of Preferred Stock).
11. Drag-Along Rights.
(A) Notwithstanding any other provision in this Agreement, if Seller
and/or one or more Oaktree Parties (such Person or Persons, "Seller") proposes
to Transfer (other to another Oaktree Party) shares of Preferred Stock
representing (a) more than 50% of the total voting power represented by the
outstanding capital stock (including the Preferred Stock) then outstanding and
normally entitled to vote in the election of directors of the Company ("Voting
Stock") or (b) more than 50% of the total voting power represented by the
outstanding Voting Stock of the Company and other securities of the Company
having the right to vote upon the satisfaction of any condition or the
occurrence of any contingency or event, including the exercise, exchange or
conversion of the security for or into any other security (the Preferred Stock
being Transferred being referred to as the "Seller Stock"), to any third party
(a "Drag Along Third Party") pursuant to a bona fide offer to acquire shares of
Preferred Stock (whether in the form of a purchase of shares of Preferred Stock,
merger, consolidation, exchange, business combination, recapitalization or
otherwise) made by an unrelated Person which has the demonstrable financial
ability to consummate such a transaction ("Bona Fide Offer"), then Seller shall
have the right, subject to the provisions of this Section 11, to require all
Purchasers (collectively, the "Drag Along Sellers") to include in such Transfer
(a "Required Sale") a portion of each such Drag Along Seller's shares of
Preferred Stock (the "Drag Along Stock") by delivering notice (the "Drag Along
Notice") to the Drag Along Sellers. The portion that each Drag Along Seller
shall be required to include in the Required Sale shall equal the product of (i)
the percentage of the Preferred Stock held by Seller that it proposes to
Transfer (expressed as a percentage), divided by 100, and (ii) the aggregate
number of shares of Preferred Stock held by such Drag Along Seller.
(B) The Drag Along Notice shall set forth: (i) the date of such notice
(the "Drag Along Notice Date"); (ii) the name and address of the Drag Along
Third Party; (iii) the proposed amount and type of consideration to be paid per
share of Preferred Stock for the Seller Stock, and a description in reasonable
detail of the terms and conditions of payment offered by the Drag Along Third
Party, together with written proposals or agreements, if any, with respect
thereto; (iv) the aggregate number of shares of Seller Stock; and (v) the
proposed date of the Required Sale (the "Drag Along Date"), which shall be not
less than 20 nor more than 180 days after the Drag Along Notice Date.
7
(C) The Drag Along Sellers shall cooperate in good faith with Seller in
connection with consummating the Required Sale (including the giving of consents
and the voting of any shares of capital stock held by the Drag Along Sellers to
approve the Required Sale). On the Drag Along Date, each of the Drag Along
Sellers shall deliver, free and clear of all liens, claims or encumbrances, and
on the same terms and conditions applicable to Seller's sale of the Seller
Stock, a certificate or certificates and/or other instrument or instruments for
all of its shares of Preferred Stock being sold, duly endorsed and in proper
form for transfer, with the signature guaranteed, to the Drag Along Third Party
in the manner and at the address indicated in the Drag Along Notice, and Seller
shall cause each Drag Along Seller's share of the purchase price to be paid to
such Drag Along Seller. Seller and the Drag Along Sellers shall all receive the
same consideration per share. No Transfer may be made by Seller under this
Section 11 unless, contemporaneously therewith, all Drag Along Sellers in such
Required Sale receive the amounts to which they are entitled under this Section
11. Each Drag Along Seller pursuant to this Section 11 shall be obligated to
join on a pro rata basis (based on the number of shares of Preferred Stock to be
sold) in any indemnification or other obligations that are part of the terms and
conditions of such Required Sale (other than any such obligations that relate
specifically to a particular Purchaser, such as indemnification with respect to
representations and warranties given by a Purchaser regarding such Purchaser's
title to and ownership of Preferred Stock).
12. Right of First Offer. Subject to the terms and conditions in this Section
12, after the date of this Agreement (or, with respect to Keel, after the two
year anniversary of the date hereof (immediately after the lapse of the Transfer
restrictions in Section 9)), each Purchaser hereby grants to Seller (or such
Oaktree Party designated by Seller) (the "Rights Holder") a right of first offer
with respect to offers to sell Preferred Stock. To the extent this Section 12
would not apply to a Transfer of Preferred Stock, each Purchaser agrees that any
transferee receiving Preferred Stock must agree in writing to be bound by all of
the provisions and conditions of this Agreement as a party hereto in the
capacity of Purchaser. Each time each such Purchaser determines to Transfer his
Preferred Stock for cash or other consideration, such Purchaser (the "RFO
Selling Purchaser") will first offer the Rights Holder the right to purchase
such Preferred Stock proposed to be Transferred (the "RFO Preferred Stock") in
accordance with the following provisions:
(A) Such RFO Selling Purchaser shall deliver a notice by certified mail
(the "Offer Notice") to the Rights Holder stating (i) it has determined to
dispose of the RFO Preferred Stock, (ii) the number of shares of RFO Preferred
Stock proposed to be disposed of, and (iii) the per share price and terms upon
which Purchaser desires to dispose of such RFO Preferred Stock.
(B) By written notification received by the RFO Selling Purchaser
within 20 days after giving of the Offer Notice (the "Offer Period"), the Rights
Holder may elect to purchase or obtain, at the price and on the terms specified
in the Offer Notice, up to that portion of such RFO Preferred Stock as that
proposed to be disposed of by the RFO Selling Purchaser and set forth in the
Offer Notice. If part of all of the consideration proposed to be paid for the
RFO Preferred Stock as stated in the Offer Notice is other than cash, the price
stated in such Offer Notice shall be deemed to be the sum of the cash
consideration, if any, specified in such Offer Notice, plus the fair market
value of the non-cash consideration, determined in good faith by Seller.
(C) In the notice of election made by the Rights Holder pursuant to
paragraph (B) above, the Rights Holder shall state whether it has agreed to
purchase all the RFO Preferred Stock set forth therein or a lesser number, and
if a lesser number, how many shares.
8
(D) Any notice by the Rights Holder to purchase RFO Preferred Stock
shall be binding on the Rights Holder except to the extent otherwise provided in
this Section 12.
(E) With respect to those shares of RFO Preferred Stock that are not
subscribed by the Rights Holder, (a) the RFO Selling Purchaser shall have 60
days following the expiration of the Offer Period to sell or enter into an
agreement to sell such RFO Preferred Stock to a third party at a price not less
than, and upon terms no more favorable to such third party than those specified
in the Offer Notice, (b) if the Rights Holder has exercised its right to
purchase less than all RFO Preferred Stock pursuant to this Section 12 it shall
not be obligated to consummate such purchase unless and until any remaining
shares of RFO Preferred Stock set forth in the Offer Notice not elected to be
purchased by the Rights Holder have actually been sold in accordance with the
terms set forth in the Offer Notice, in which event a closing with respect to
both the purchase by such Rights Holder and such third party shall occur
simultaneously, and (c) the third party transferee must agree in writing to be
bound by the terms and provisions of this Agreement as a Purchaser. If such
Purchaser does not sell such RFO Preferred Stock referred to in the Offer Notice
within such 60 day period or the agreement entered into with respect to such RFO
Preferred Stock within such 60 day period is not consummated within 30 days of
the execution thereof, the RFO Selling Purchaser shall not thereafter Transfer
any Preferred Stock without first again offering such securities to the Rights
Holder in the manner provided above.
13. Right to Require Conversion. At any ▇▇▇▇ ▇▇▇▇▇▇ and/or any Oaktree Party
converts any or all of the Preferred Stock held by it into common stock, Seller
(or such other Oaktree Party designated by Seller) may, by giving written notice
to the Purchasers, require each Purchaser to convert a percentage of the
Preferred Stock held by such Purchaser into common stock equal to the percentage
of Preferred Stock converted by Seller and such other Oaktree Parties based on
their total holdings of Preferred Stock immediately prior to such conversion.
Each such Purchaser receiving such notice of conversion shall convert the
required number of shares of Preferred Stock into common stock within 10 days of
notice thereof subject to any limits on conversion imposed by the Company's
charter.
14. Spouses. Each party hereto who is a natural person and each of their
respective spouses, by their execution of this Agreement, (a) evidence that they
are fully aware of, understand and fully consent and agree to the provisions of
this Agreement and its binding effect upon any community property or similar
marital property interest in the Preferred Stock that they may now or hereafter
own and (b) agree that termination of their marital relationship with any
individual party hereto for any reason shall not have the effect of removing any
such Preferred Stock otherwise subject to this Agreement from coverage hereof.
Each party hereto who is a natural person further agrees that he or she shall
cause his or her spouse (and any subsequent spouse) to execute and deliver,
within 30 days after the request of Seller, their written agreement to be bound
by the terms and provisions hereof, in a form and substance satisfactory to
Seller, if such spouse is not a signatory hereto in such capacity.
15. Miscellaneous.
(A) Survival. Except as otherwise set forth herein, the representations,
warranties, covenants, and obligations of the parties hereto contained in this
Agreement shall survive the Closing. After all shares of Preferred Stock have
converted into common stock, the provisions of Sections 9, 10, 11, 12 and 13
shall be of no further force or effect, provided that such Sections shall not
apply in any case to any shares of common stock acquired by Purchaser upon
conversion of Preferred Stock.
9
(B) No Tax Representations or Warranties. Seller and Purchasers acknowledge that
no representation or warranty with respect to the tax consequences of the
Agreement and the transactions contemplated therein have been made by Seller to
Purchasers. Purchasers are responsible for consulting, if they so desire, with
their own tax advisor regarding the tax consequences to them of the Agreement
and the transactions contemplated herein.
(C) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto in respect of its subject matters and
supersedes all prior understandings, agreements, or representations by or among
the parties hereto, written or oral, to the extent they relate in any way to the
subject matter hereof or the transactions contemplated hereby.
(D) Amendment; Waiver. This Agreement may not be amended or modified, and no
provisions hereof may be waived, without the written consent of the parties
hereto. No action taken pursuant to this Agreement, including any investigation
by or on behalf of any party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representation, warranty,
covenant or agreement contained herein. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
further or continuing waiver of such breach or as a waiver of any other or
subsequent breach. No failure on the part of any party to exercise, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.
(E) Notices. Any notice, request, demand or other communication required or
permitted to be given to a party pursuant to the provisions of this Agreement
will be in writing and will be effective and deemed given under this Agreement
on the earliest of: (a) the date of personal delivery, (b) the date of
transmission by facsimile, with confirmed transmission and receipt, (c) two days
after deposit with a nationally-recognized courier or overnight service such as
Federal Express, or (d) five days after mailing via certified mail, return
receipt requested. All notices not delivered personally or by facsimile will be
sent with postage and other charges prepaid and properly addressed to the party
to be notified at the address set forth for such party:
(i) If to Holdings:
c/o Oaktree Capital Management, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: B. ▇▇▇▇▇ ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which does not constitute notice):
Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
(ii) If to a Purchaser, at the address set forth on the
signature page hereto.
10
(F) Oaktree Parties. For administrative convenience, any notice or
other communication to any Oaktree Party shall be deemed given, subject to
Section 15(E), upon delivery to the care of Oaktree Capital Management, LLC, and
any right or obligation of any Oaktree Party may be exercised or discharged, as
applicable, by Oaktree Capital Management, LLC on behalf any or all Oaktree
Parties.
(G) Severability. The provisions of this Agreement will be deemed
severable and the invalidity or unenforceability of any provision hereof will
not affect the validity or enforceability of the other provisions hereof;
provided that if any provision of this Agreement, as applied to any party or to
any circumstance, is adjudged by a court, governmental body, arbitrator not to
be enforceable in accordance with its terms, the parties agree that the court,
governmental body, arbitrator making such determination will have the power to
modify the provision in a manner consistent with its objectives such that it is
enforceable, and/or to delete specific words or phrases, and in its reduced
form, such provision will then be enforceable and will be enforced.
(H) Construction. The parties hereto have jointly participated in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement will be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof will arise
favoring or disfavoring any party hereto because of the authorship of any
provision of this Agreement. Any reference to any federal, state, local or
foreign law will also be deemed to refer to such law as amended and all rules
and regulations promulgated thereunder, unless the context otherwise requires.
The words "include," "includes" and "including" will be deemed to be followed by
"without limitation." Pronouns in masculine, feminine and neuter genders will be
construed to include any other gender, and words in the singular form will be
construed to include the plural and vice versa, unless the context otherwise
requires. The words "this Agreement," "herein," "hereof," "hereby," "hereunder"
and words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The parties hereto intend
that each representation, warranty and covenant contained herein will have
independent significance. If any party hereto has breached any representation,
warranty or covenant contained herein in any respect, the fact that there exists
another representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which such party has
breached, will not detract from or mitigate the fact that such party is in
breach of the first representation, warranty or covenant.
(I) No Third Party Beneficiaries. Except as otherwise set forth in this
Agreement, all representations, warranties, covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. Nothing in this Agreement shall create or be
deemed to create any third-party beneficiary rights in any Person not a party to
this Agreement.
(J) Governing Law. This Agreement and the performance of the
transactions and the obligations of the parties hereunder will be governed by
and construed and enforced in accordance with the laws of the State of Texas,
without giving effect to any choice of law principles.
11
(K) Descriptive Headings. The section and subsection headings contained
in this Agreement are inserted for convenience only and will not affect in any
way the meaning or interpretation of this Agreement.
(L) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
(M) Successors and Assigns. This Agreement and the rights and
obligations of the parties hereunder shall inure to the benefit of, and be
binding upon, their respective successors, assigns and legal representatives.
(N) Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement or any other agreement or
document to be executed or delivered pursuant hereto, the prevailing party shall
be entitled to reasonable attorneys' fees, costs, and disbursements in addition
to any other relief to which such party may be entitled.
(O) Adjustments for Stock Splits, Etc. Wherever in this Agreement there
is a reference to a specific number of shares of capital stock of any class or
series, then, upon the occurrence of any subdivision, combination or stock
dividend of such class or series of stock, the specific number of shares so
referenced in this Agreement will automatically be proportionally adjusted to
reflect the effect of such subdivision, combination or stock dividend on the
outstanding shares of such class or series of stock.
(P) Merger. The parties acknowledge that it is intended that the
Company merge into a Delaware corporation in connection with the transactions
contemplated by the Subscription Agreement, dated February 25, 2005, between
Seller and the Company. This Agreement shall survive such merger and shall apply
to such Delaware corporation and its capital stock without any further action on
the part of the parties.
(SIGNATURE PAGE FOLLOWS)
12
(SUBSCRIPTION AGREEMENT
SIGNATURE PAGE)
IN WITNESS WHEREOF, the parties have executed this Agreement on and
as of the date first written above.
SELLER:
OCM GW HOLDINGS, LLC
By: OCM Principal Opportunities Fund III,
L.P., its managing member
By: OCM Principal Opportunities Fund III
GP, LLC, its general partner
By: Oaktree Capital Management, LLC, its
managing partner
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal
13
(SUBSCRIPTION AGREEMENT
SIGNATURE PAGE)
PURCHASERS:
/s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇, individually
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, individually
/s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇▇▇▇▇▇, individually
/s/ ▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇ ▇▇▇▇▇▇▇, individually
/s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇ ▇▇▇▇▇▇, individually
/s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇ ▇▇▇▇▇▇, individually
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, individually
/s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇ ▇▇▇▇▇▇, individually
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, individually
/s/ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇, individually
/s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇, individually
14
EXHIBIT A
Individual Preferred Shares Purchase Price
---------- ---------------- --------------
▇▇▇▇▇ ▇▇▇▇ 600 $300,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 500 $250,000
▇▇▇▇ ▇▇▇▇▇▇ 500 $250,000
▇▇▇ ▇▇▇▇▇▇▇ 500 $250,000
▇▇▇ ▇▇▇▇▇▇ 500 $250,000
▇▇▇ ▇▇▇▇▇▇ 500 $250,000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 500 $250,000
▇▇▇ ▇▇▇▇▇▇ 100 $ 50,000
▇▇▇▇▇ ▇▇▇▇▇▇ 50 $ 25,000
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ 50 $ 25,000
▇▇▇▇▇ ▇▇▇▇ 500 $250,000
Total 4,300 $2,150,000
15
