EXHIBIT 10.5
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (this "Agreement") is made and
entered into this 14th day of August, 1998, by and among Future
Petroleum Corporation, a Utah corporation ("Future"), B. Xxxx Xxxxx, a
Texas resident ("Price"), Don Wm. Xxxxxxxx, a Texas resident
("Xxxxxxxx"), Energy Capital Investment Company PLC, an English
investment company ("Energy PLC"), EnCap Equity 1994 Limited
Partnership, a Texas limited partnership ("EnCap LP"), and Xxxxx Energy
Resources, Ltd., a Texas limited partnership ("Xxxxx").
RECITALS:
A. Price, Reynolds, Energy PLC and EnCap LP are currently
shareholders in Future.
B. As of even date herewith, Xxxxx is being issued shares of
common stock of Future, $0.01 par value per share ("Common Stock"), in
connection with the consummation of a merger of a wholly-owned
subsidiary of Xxxxx into and with a wholly-owned subsidiary of Future
pursuant to that certain Agreement and Plan of Merger dated as of August
14, 1998, by and among Xxxxx, SCL-Cal Company, a Texas corporation,
Future and Future CAL-TEX Corporation, a Texas corporation.
C. As of even date herewith, Energy PLC and EnCap LP are being
issued additional shares of Common Stock in consideration of their
agreement to subordinate certain indebtedness owed to them by Future to
a new senior credit facility.
D. The parties hereto deem it in their mutual best interests
to make the agreements contained herein.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the foregoing Recitals
and the mutual agreements contained herein, the sufficiency of which is
hereby acknowledged and confirmed, the parties hereto, intending to be
legally bound hereby, agree as follows:
Section 1. Definitions.
(a) The following defined terms shall have the respective
meanings assigned to them below:
(i) "Affiliate" shall mean, with respect to any person,
any person directly or indirectly controlling, controlled by or
under common control with, such other person. For purposes of
this definition, the term "control," when used with respect to any
person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling"
and "controlled" shall meanings correlative to the foregoing.
(ii) "Xxxxx Group" shall mean Xxxxx and any transferee of
a member of the Xxxxx Group that executes or is required to
execute an Addendum Agreement.
(iii) "Designated Nominee" shall mean a person designated
by a Subject Shareholder as a nominee for election to Future's
Board of Directors.
(iv) "EnCap Group" shall mean Energy PLC, EnCap LP and
any transferee of a member of the EnCap Group that executes or is
required to execute an Addendum Agreement.
(v) "Market Price" of the Common Stock means the average
closing prices of the Common Stock for the ten trading days
preceding an Offering Notice under Section 4(b) over the principal
securities exchange in which the Common Stock is traded or, if not
traded on an exchange, the average closing price for ten trading
days preceding such Offering Notice as reported on the NASDAQ NMS,
or if not traded on an exchange or the NASDAQ NMS, the average of
the closing bid and asked prices of the Common Stock for such ten
day period.
(vi) "Other Shareholder" shall mean, when used with
respect to a Subject Shareholder, the other Subject Shareholders.
(vii) "Price Group" shall mean Xxxxx, Xxxxxxxx and any
transferee of a member of the Price Group that executes or is
required to execute an Addendum Agreement.
(viii) "Purchase Price" means, for purposes of Section 4,
an amount stated in dollars equal to the total value of a bona
fide written offer from a person to purchase shares of Common
Stock from a Shareholder determined as follows: (i) cash payable
at closing shall be valued at the amount thereof, (ii) a security
trading on a public market and for which published trading prices
are readily available shall be valued at its closing sales price
(or if a sales price is not available, at the average of its
closing bid and asked prices) on the last business day preceding
the date of the first Offering Notice with respect to such offer,
and (iii) a security not described in clause (ii) or other prop-
erty, including cash payable in one or more installments after
closing, shall be valued at its fair market value on the last
business day preceding the date of the first Offering Notice with
respect to such offer as determined at the option of the Selling
Shareholder (as defined in Section 4) either (a) by a qualified
independent third party appraiser (the expense of which shall be
paid by the Company) or (b) in good faith by the Board of
Directors of the Company (excluding any member of the Board who is
a director, officer or shareholder of the Selling Shareholder or
who has the right to purchase Common Stock under this Agreement)
but only if all of such Board members agree to accept the
assignment to make such determination.
(ix) "Shareholders" shall mean Xxxxx, Energy PLC, EnCap
LP, Xxxxx, Xxxxxxxx and any person who executes or is required to
execute an Addendum Agreement (attached hereto as Exhibit "A")
with respect to the Common Stock.
(x) "Subject Shareholder" shall mean either the (i) Price
Group, (ii) EnCap Group or (iii) Xxxxx Group.
(xi) "Total Voting Power" shall mean the aggregate number
of votes which may be cast by holders of outstanding Voting
Securities.
(xii) "Voting Securities" shall mean Common Stock and any
other securities of Future entitled to vote generally for the
election of directors of Future.
Section 2. Agreement Regarding Board Representation.
(a) The Price Group shall have three Designated Nominees, the
EnCap Group shall have two Designated Nominees and the Xxxxx Group shall
have two Designated Nominees.
(b) Each Shareholder agrees (i) to use its reasonable best
efforts to cause Future's Board of Directors to be composed of seven
members, (ii) to use its reasonable best efforts to cause Future to
nominate or cause to be nominated to the Future Board of Directors the
Designated Nominees of the Other Shareholders and (iii) to vote or cause
to be voted all Voting Securities beneficially owned by such Shareholder
in favor of the election of the Designated Nominees of the Other
Shareholders to Future's Board of Directors. For purposes of this
Agreement, "beneficial ownership" or "beneficially own" shall be
determined in accordance with Rule 13d-3 under the Securities Exchange
Act of 1934, as amended.
(c) In the event of the death, incapacity, resignation or
removal of a Subject Shareholder's Designated Nominee preventing his or
her serving on Future's Board of Directors, each Shareholder will
promptly cause the election or appointment of another Designated Nominee
of such Subject Shareholder to fill the vacancy created thereby.
(d) Each Shareholder agrees to cause a designee of the Xxxxx
Group to be elected Chairman of the Board of Directors of Future. Xxx
X. Xxxx shall serve as the Xxxxx Group's initial designee. In the event
Xx. Xxxx no longer serves as the Xxxxx Group's designee, the Xxxxx Group
agrees that all of its subsequent replacement designees as Chairman of
the Board of Directors shall be subject to the prior approval of a
majority of the Board of Directors of Future, which approval shall not
be unreasonably withheld, and if a replacement designee is not so
approved, the Xxxxx Group shall designate another designee acceptable to
Future's Board of Directors.
Section 3. Tag Along Rights.
(a) If any Shareholder (for purposes of this Section 3, a
"Selling Shareholder") proposes to sell, dispose of or otherwise
transfer any shares (whether currently owned or hereafter acquired) of
Common Stock (the shares of Common Stock proposed to be transferred
being called the "Subject Shares") other than pursuant to an Exempt
Transfer (as defined below), the Selling Shareholder shall refrain from
effecting such transaction unless, prior to the consummation thereof,
the Shareholders other than the Selling Shareholder (the "Tag Along
Shareholders"), shall have been afforded the opportunity to join in such
sale on the basis hereinafter described. Each of the Shareholders
agrees not to transfer any shares of Common Stock indirectly in a manner
that would be inconsistent with the essential intent of this Section 3.
(b) Not less than 30 nor more than 120 days prior to the
consummation of any proposed sale, disposition or transfer of the
Subject Shares, the Selling Shareholder shall notify, or cause to be
notified, each Tag Along Shareholder in writing of each such proposed
transfer. Such notice ("Sale Notice") shall set forth: (i) the name of
the transferor (the "Proposed Purchaser") and the number of Subject
Shares proposed to be transferred, (ii) the name and address of the
Proposed Purchaser, (iii) the proposed amount and form of consideration
and terms and conditions of payment offered by such Proposed Purchaser
and (iv) that the Proposed Purchaser has been informed of the tag along
right provided for in this Section 3 and has agreed to purchase shares
of Common Stock owned by such Tag Along Shareholder in accordance with
the terms hereof. The tag along right may be exercised by any Tag Along
Shareholder by delivery of a written notice to the Selling Shareholder
proposing to sell the Subject Shares (the "Tag-Along Notice") within 30
days following its receipt of the notice specified above. The Tag-Along
Notice shall state the amount of shares of Common Stock (the "Tag-Along
Shares") that such Tag-Along Shareholder proposes to include in such
transfer to the Proposed Purchaser. If no Tag-Along Notice is received
during the 30-day period referred to above (or if such Notices do not
cover all the Subject Shares proposed to be transferred), the Selling
Shareholder shall have the right, for a 90-day period after the
expiration of the 30-day period referred to above, to transfer the
Subject Shares specified in the Tag-Along Notice (or the remaining
Subject Shares) on terms and conditions no more favorable than those
stated in the Tag-Along Notice and in accordance with the provisions of
this Section 3.
(c) In the event that the number of shares of Common Stock that
the Selling and Tag Along Shareholders propose to sell is greater than
the number of shares of Common Stock that the Proposed Purchaser
proposes to buy, each such Shareholder (a "Participating Shareholder")
shall be permitted to sell the total number of shares of Common Stock
that the Proposed Purchaser agrees to purchase multiplied by the Pro
Rata Percentage (as defined) attributable to such Participating
Shareholder, unless otherwise agreed by all of the Participating
Shareholders. The Pro Rata Percentage shall mean a percentage equal to
X divided by Y, where "X" is equal to the number of issued and
outstanding shares of Common Stock currently held by such Participating
Shareholder, and where "Y" is equal to the aggregate number of shares of
Common Stock then owned by all of the Participating Shareholders.
(d) Any such purchase shall be made on the same price and other
terms and conditions as the Proposed Purchaser has offered with respect
to the Subject Shares. In the event that the Proposed Purchaser does
not purchase the Tag-Along Shares from the Tag Along Shareholders on the
same terms and conditions as specified in the Sale Notice, then the
Selling Shareholder shall not be permitted to sell any Subject Shares to
the Proposed Purchaser in the proposed transfer. The closing of any
purchase from the Tag Along Shareholders shall occur contemporaneously
with the purchase and sale of the Subject Shares or at such other time
as such Tag-Along Shareholder and the Proposed Purchaser shall agree.
(e) As used herein, the term "Exempt Transfer" shall mean any
sale, disposition or transfer of the Subject Shares to be effected (i)
through a registration of such shares under the Securities Act of 1933,
as amended (the "Securities Act"), (ii) pursuant to and in compliance
with Rule 144 promulgated by the Securities and Exchange Commission
pursuant to the Securities Act, or (iii) transfers by a Selling
Shareholder to any person who is a partner or equity holder of such
Selling Shareholder, a successor of, or an entity all of the equity
interests of which are directly or indirectly owned by, the Selling
Shareholder or an Affiliate of the Selling Shareholder; provided that no
transfer pursuant to (iii) above shall be an Exempt Transfer unless the
transferee agrees in writing to be bound by this Agreement and executes
an Addendum Agreement hereto.
(f) The provisions of this Section 3 shall not apply to any
bona fide charge, pledge or mortgage by any Shareholder of any shares of
Common Stock owned or held by it or its rights under this Agreement;
provided that any disposition of any such shares of Common Stock after
foreclosure of such charge, pledge or mortgage shall be governed by the
provisions of this Agreement, and the purchaser or purchasers of the
shares shall have entered into an Addendum Agreement with Future and the
other Shareholders.
Section 4. Right of First Refusal.
(a) No Shareholder may sell, transfer or dispose of any shares
(whether currently owned or hereafter acquired) of Common Stock except
in compliance with this Section 4. If any Shareholder desires to
dispose of any shares of Common Stock owned or held by it pursuant to a
bona fide offer (other than in an Exempt Transfer), such Shareholder
(for purposes of this Section 4, a "Selling Shareholder") shall offer
such shares for sale at the Purchase Price to the other Shareholders,
all in accordance with the following provisions of this Section 4.
(i) The Selling Shareholder shall deliver a written notice
("Offering Notice") to the other Shareholders, and within 30 days
from the receipt of such Offering Notice, the other Shareholders
shall deliver written notice ("Reply Notice") to the Selling
Shareholder. If by their Reply Notice the other Shareholders
accept the offer of the Selling Shareholder, such Reply Notice
shall constitute an agreement binding upon the Selling Shareholder
and the other Shareholders to sell and purchase the offered shares
at the Purchase Price. Once the Offering Notice is delivered, the
offer by the Selling Shareholder may not be withdrawn prior to the
expiration of the option of the other Shareholders, as provided in
this Section 4.
(ii) Any dispute concerning the calculation of the
Purchase Price shall be resolved by the Board of Directors of the
Company, excluding any member of the Board who is, or is a
director, officer, partner or stockholder of, the Selling
Shareholder or who has a right to purchase stock from the Selling
Shareholder in the transaction for which the Purchase Price is
being determined; provided that if all directors are excluded
pursuant to the foregoing, such disputes shall be submitted to
binding arbitration as provided in Exhibit B. The Purchase Price
shall be paid in cash at the closing.
(iii) If the other Shareholders do not accept an offer of
the Selling Shareholder pursuant to the foregoing provisions of
this Section 4 the Selling Shareholder shall be freed and
discharged, except as herein stated, from all obligations under
the terms of this Agreement other than to sell the offered shares
to the purchaser and at the price and upon the terms stated in the
Offering Notice given by the Selling Shareholder pursuant to this
Section 4, but only if such sale shall be completed within a
period of ninety days from the date of delivery of the Offering
Notice to the other Shareholders. If the Selling Shareholder does
not complete such sale within such ninety-day period, all the
provisions of this Agreement, including the provisions of this
Section 4, shall apply to any future sale or offer for sale of
such shares of Common Stock owned by the Selling Shareholder.
(b) Upon any involuntary disposition of a Shareholder's shares
of Common Stock, such Shareholder or its representative shall send
notice thereof, disclosing in full to the Company and the other
Shareholders the nature and details of such involuntary disposition and
offer such shares for sale at the Market Price of Common Stock to the
other Shareholders, all in accordance with the following provisions of
this Section 4. As used in this Section 4(b), the term "Selling
Shareholder" shall mean such Shareholder or its representative, as the
case may be.
(i) The Selling Shareholder shall deliver an Offering
Notice to the other Shareholders. Each of the other Shareholders
shall have 30 days from the receipt of their respective Offering
Notice to deliver a Reply Notice to the Selling Shareholder. If
by their Reply Notice the other Shareholders accept the offer of
the Selling Shareholder, such Reply Notice shall constitute an
agreement binding upon the Selling Shareholder and the other
Shareholders to sell and purchase the offered shares at the price
and upon the terms stated in the Offering Notice of the Selling
Shareholder.
(ii) In connection with any purchase and sale of shares of
Common Stock pursuant to paragraph (i) of this Section 4(b), the
purchaser or purchasers shall pay the purchase price for the
shares in cash at the closing.
(iii) If the Shareholders do not accept the offer of the
Selling Shareholder pursuant to the foregoing provisions of this
Section 4(b), the Selling Shareholder shall be freed and
discharged from all obligations under the terms of this Agreement
except to dispose of the offered shares by involuntary disposition
but only if the transferee under any such disposition shall have
entered into and Addendum Agreement with the Company and the other
Shareholders. If such involuntary disposition is not effected,
all the provisions of this Agreement, including the provisions of
this Section 4, shall apply to any future involuntary disposition
of such shares of Common Stock owned by the Selling Shareholder.
(c) The provisions of this Section 4 shall not apply to any
bona fide charge, pledge or mortgage by any Shareholder of any shares of
Common Stock owned or held by it or its rights under this Agreement;
provided that any disposition of any such shares of Common Stock after
foreclosure of such charge, pledge or mortgage shall be governed by the
provisions of this Agreement, and the purchaser or purchasers of the
shares shall have entered into an Addendum Agreement with Future and the
other Shareholders.
Section 5. Representations and Warranties of Shareholders.
Each Shareholder hereby represents and warrants to the other
Shareholders as follows:
(a) As of the date hereof, such Shareholder is the record and
beneficial owner of the number of shares of Common Stock set forth
opposite its name in the attached Exhibit 4(a).
(b) Such Shareholder, if not a natural person, is duly formed,
validly existing and in good standing under the laws of the jurisdiction
of its formation.
(c) Such Shareholder has full power and authority to execute,
deliver, and perform this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered
by such Shareholder and constitutes a valid and legally binding
obligation of such Shareholder, enforceable against such Shareholder in
accordance with its terms.
(d) The execution, delivery, and performance by such
Shareholder of this Agreement do not and will not (i) if not a natural
person, be in contravention of or violate any provision of its charter
or other governing documents, as amended to the date hereof, (ii)
conflict with or result in a violation of any provision of, or
constitute (with or without the giving of notice or the passage of time
or both) a default under, or give rise (with or without the giving of
notice or the passage of time or both) to any right of termination,
cancellation, or acceleration under, any bond, debenture, note,
mortgage, indenture, lease, contract, agreement, or other instrument or
obligation to which such Shareholder is a party or by which such
Shareholder or any of its properties may be bound or (iii) violate any
applicable law, rule or regulation binding upon such Shareholder.
(e) No consent, approval, order, or authorization of, or
declaration, filing, or registration with, any court or governmental
agency or of any third party is required to be obtained or made by such
Shareholder in connection with the execution, delivery, or performance
by such Shareholder of this Agreement.
Section 6. Survival of Provisions.
All representations, warranties and covenants made by each party
hereto in this Agreement or any other document contemplated hereby shall
be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement or such other
document, regardless of any investigation made by or on behalf of any
such party.
Section 7. Entire Agreement.
This Agreement and the other documents contemplated hereunder
contain the entire understanding of the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements,
understandings, negotiations, and discussions among the parties with
respect to such subject matter, including, without limitation that
certain Voting Agreement dated November 25, 1997, by and between Future,
Energy PLC, EnCap LP, Xxxx Xxxxx and Don Wm. Xxxxxxxx and that certain
Purchase and Sale Agreement dated November 25, 1997, by and among
Future, Energy PLC, EnCap LP and Gecko Booty 1994 I Limited Partnership.
Neither Future nor any Shareholder shall be a party to any agreement
involving any holder of capital stock of Future, as such, unless Future
and all such Shareholders are also parties to that agreement, except
with the written consent of Future and all such Shareholders who are not
parties to such an agreement.
Section 8. Amendments.
This Agreement may be amended, modified, supplemented, restated or
discharged only by an instrument in writing signed by each of the
Subject Shareholders hereto. For purposes of this section, a Subject
Shareholder shall be deemed to have properly executed an amendment
hereto upon the consent of the holders of a majority of the then
outstanding Voting Securities held by the members of such Subject
Shareholder.
Section 9. Notices.
All notices and other communications required under this Agreement
shall (unless otherwise specifically provided herein) be in writing and
be delivered personally, by recognized commercial courier or delivery
service (which provides a receipt), by telecopier (with receipt
acknowledged), or by registered or certified mail (postage prepaid), at
the following addresses:
If to Xxxxx: c/x Xxxxx Energy Company
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxx
Fax No.: 000-000-0000
If to B. Xxxx Xxxxx or Don Wm. Xxxxxxxx:
c/o Future Petroleum Corporation
0000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
Fax No.: 000-000-0000
If to Energy PLC or EnCap LP:
x/x XxXxx Xxxxxxxxxxx, X.X.
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxx or Xxxxx Xxxxxxx
Fax No.: 000-000-0000
and shall be considered delivered on the date of receipt. A Shareholder
may specify as its proper address any other post office address within
the continental limits of the United States by giving notice to the
other Shareholders, in the manner provided in this Section, at least ten
(10) days prior to the effective date of such change of address.
Any party hereto may designate a different address by notice to the
other parties.
Section 10. Termination.
This Agreement shall terminate upon the earlier of (i) the written
consent of each of the Shareholders, (ii) when the Shareholders
collectively hold an aggregate of less than 30%, or when, with respect
to a Subject Shareholder, such Subject Shareholder owns less than 5% of
the issued and outstanding shares of Common Stock (and this Agreement
shall be terminated solely with respect to such Subject Shareholder but
shall remain in effect as to those Subject Shareholders owning 5% or
more of the issued and outstanding shares of Common Stock).
Section 11. Power of Attorney.
For the purpose of executing an Addendum Agreement, all the
Shareholders hereby appoint Future as their agent and attorney to
execute such Addendum Agreement on their behalf and expressly bind
themselves to the Addendum Agreement by Future's execution of that
Agreement without further action on their part.
Section 12. No Waiver.
The failure of any party hereto to insist upon strict performance
of a covenant hereunder or of any obligation hereunder, irrespective of
the length of time for which such failure continues, shall not be a
waiver of such party's right to demand strict compliance in the future.
No consent or waiver, express or implied, to or of any breach or default
in the performance of any obligation hereunder shall constitute a
consent or waiver to or of any other breach or default in the
performance of the same or any other obligation hereunder.
Section 13. Choice of Law.
This Agreement shall be governed by the laws of the State of Utah.
Section 14. Successors and Assigns.
This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns.
Section 15. References and Construction.
(a) For purposes of this Agreement, whenever any Shareholder is
required to offer shares of Common Stock to the other Shareholders
pursuant to this Agreement, such offer shall be deemed to be made to the
other Shareholders pro rata in accordance with their respective holdings
of shares of Common Stock at the time of the offer, or in such other
proportions as may be agreed upon by all Shareholders electing to accept
the offer who, pursuant to this agreement, would purchase more or less
than their pro rata share. Except as may otherwise be agreed, each
member of the group to whom such shares are so offered shall have the
right to purchase that proportion of the number of such offered shares
that the number of shares of Common Stock owned by such member bears to
the total number of shares of Common Stock owned by the members of the
group electing to accept the offer.
(b) The provisions of Sections 3 and 4 shall not apply to
transactions between members of a group, so that transactions between
members of the Price Group shall not be subject to Sections 3 and 4,
transactions between members of the EnCap Group shall not be subject to
Sections 3 and 4 and transactions between members of the Xxxxx Group
shall not be subject to Sections 3 and 4 and any shares transferred
pursuant to such transactions shall remain subject to this Agreement.
The parties hereto consent to the pledge of shares of Common Stock
pursuant to those certain Pledge Agreements (stock) by Xxxxx, Energy PLC
and EnCap LP, B. Xxxx Xxxxx and Don Wm. Xxxxxxxx, respectively, in favor
of Bank of America National Trust and Savings Association and agree that
Sections 3 and 4 hereof shall not be applicable to such pledges or any
foreclosures or resales thereunder.
(c) All references in this Agreement to articles, sections,
subsections and other subdivisions refer to corresponding articles,
sections, subsections and other subdivisions of this Agreement unless
expressly provided otherwise.
(d) Titles appearing at the beginning of any of such
subdivisions are for convenience only and shall not constitute part of
such subdivisions and shall be disregarded in construing the language
contained in such subdivisions.
(e) The words "this Agreement", "this instrument", "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.
(f) Words in the singular form shall be construed to include
the plural and vice versa, unless the context otherwise requires.
(g) Unless the context otherwise requires or unless otherwise
provided herein, the terms defined in this Agreement which refer to a
particular agreement, instrument or document also refer to and include
all renewals, extensions, modifications, amendments or restatements of
such agreement, instrument or document, provided that nothing contained
in this subsection shall be construed to authorize such renewal,
extension, modification, amendment or restatement.
(h) Examples shall not be construed to limit, expressly or by
implication, the matter they illustrate.
(i) The word "or" is not exclusive and the word "includes" and
its derivatives means "includes, but is not limited to" and
corresponding derivative expressions.
(j) No consideration shall be given to the fact or presumption
that one party had a greater or lesser hand in drafting this Agreement.
(k) All references herein to "$" or "dollars" shall refer to
U.S. Dollars.
Section 16. Endorsements.
The certificate or certificates representing the Voting Securities
now owned or hereafter acquired by the Shareholders shall have
conspicuously stamped, printed, or typed on the face or back thereof a
legend substantially in the following form:
"The shares represented hereby are subject to that certain
Shareholders' Agreement dated as of August 14, 1998, by and among
the Company, B. Xxxx Xxxxx, Don Wm. Xxxxxxxx, Energy Capital
Investment Company PLC, and EnCap Equity 1994 Limited Partnership
and Xxxxx Energy Resources, Ltd. A copy of the Shareholders'
Agreement and all applicable amendments thereto will be furnished
by the Company to the holder hereof without charge upon written
request to the Company at its principal place of business or
registered office."
Section 17. Specific Performance.
Each of the parties hereto recognizes that any breach of the terms
of this Agreement may give rise to irreparable harm for which money
damages would not be an adequate remedy, and accordingly agree that, in
addition to other remedies, any nonbreaching party shall be entitled to
enforce the terms of this Agreement by a decree of specific performance
without the necessity of proving the inadequacy as a remedy of money
damages.
Section 18. Counterparts.
This Agreement may be executed in multiple counterparts, with each
such counterpart constituting an original and all of such counterparts
constituting but one and the same agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date and year first above written.
FUTURE PETROLEUM CORPORATION
By: /s/ B. Xxxx Xxxxx
Name: B. Xxxx Xxxxx
Title: President
Name: B. Xxxx Xxxxx
Don Wm. Xxxxxxxx
ENCAP EQUITY 1994 LIMITED PARTNERSHIP
By: EnCap Investments L.C., General
Partner
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
ENERGY CAPITAL INVESTMENT
COMPANY PLC
By: Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Director
XXXXX ENERGY RESOURCES, LTD.
By: Xxxxx Operating Company, Inc.,
General Partner
By:
Name: Xxx X. Xxxx
Title: President
EXHIBIT 4(a)
Shareholder Number of Shares of Common Stock
B. Xxxx Xxxxx 1,089,149
Don Wm. Xxxxxxxx 753,362
Energy Capital Investment Company PLC 2,269,886
EnCap Equity 1994 Limited Partnership 2,424,973
Xxxxx Energy Resources, Ltd. 4,694,859
EXHIBIT A
ADDENDUM AGREEMENT
Addendum Agreement made this _____ day of _____________, ____, by
and between ____________________________________________ (the "New
Shareholder") and Future Petroleum Corporation, a Utah corporation (the
"Company"), and the other shareholders (the "Shareholders") of the
Company, who are parties to that certain Shareholders' Agreement dated
August 14, 1998 (the "Agreement"), between the Company and the
Shareholders.
W I T N E S E T H:
WHEREAS, the Company and the Shareholders entered into the
Agreement to impose certain restrictions and obligations upon themselves
and the shares of Common Stock, $0.01 par value, of the Company held by
them (the "Shares");
WHEREAS, the New Shareholder is desirous of becoming a
shareholder of the Company; and
WHEREAS, the Company and the Shareholders have required in the
Agreement that in certain circumstances certain persons being offered
Shares must enter into an Addendum Agreement binding the New Shareholder
to the Agreement to the same extent as if it was an original party
thereto, so as to promote the mutual interests of the Company, the
Shareholders and the New Shareholders by imposing the same restrictions
and obligations on the New Shareholder and the shares of Common Stock to
be acquired by it as were imposed upon the Shareholders under the
Agreement,
NOW, THEREFORE, in consideration of the mutual promises of the
parties, and as a condition of the purchase of the shares of Common
Stock in the Company, the New Shareholder acknowledges that it has read
the Agreement. The New Shareholder shall be bound by, and shall have
the benefit of, all the terms and conditions set out in the Agreement to
the same extent as if it was a "Shareholder" as defined in the
Agreement. This Addendum Agreement shall be attached to and become a
part of the Agreement.
______________________________
New Shareholder
By____________________________
Address for notices under
Section 9 of Agreement:
______________________________
______________________________
______________________________
EXHIBIT B
ARBITRATION
In the event that a dispute or controversy as described in Section
3 should arise, such dispute or controversy shall be settled in
arbitration in Houston, Texas and for this purpose each of the parties
hereby expressly consents to such arbitration in such place. In the
event the parties cannot mutually agree upon an arbitrator to settle
their dispute or controversy, each party to the dispute shall select one
arbitrator. In the event that there are only two parties to the
dispute, the arbitrators selected by each party shall select a third
arbitrator. The decision of said arbitrators shall be binding upon the
parties for all purposes. If any party fails to select an arbitrator
within 15 days after written demand from the other party or parties to
do so, or if, in the event that there are only two parties to the
dispute, the two arbitrators selected fail to select a third arbitrator
within 15 days after the last of such selected arbitrators is appointed,
such other arbitrator or arbitrators shall be selected pursuant to the
then existing rules and regulations of the American Arbitration
Association. Such arbitration shall be conducted in accordance with the
then existing rules and regulations of the American Arbitration
Association to the extent such rules and regulations are not
inconsistent with this Agreement. The expense of each arbitrator shall
be borne by the party selecting the arbitrator. The expense of any
third arbitrator shall be borne equally by the two parties to the
dispute or controversy. For purposes hereof, in the case of a dispute or
controversy where the Offering Notice was submitted by, or the
transaction otherwise involves, more than one Selling Shareholder, all
such Selling Shareholders shall collectively constitute a single party.
Likewise, where the transaction involves more than one purchasing
Shareholder, all such purchasing Shareholders shall constitute a single
party.
