EXHIBIT 2.2
TCW AGREEMENT
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement") is made and entered into as
of June 19, 1997 between Forcenergy Inc, a Delaware corporation ("Forcenergy"),
and each of the undersigned stockholders (individually a "Stockholder" and
collectively the "Stockholders") of Edisto Resources Corporation, a Delaware
corporation ("Edisto") or of Convest Energy Corporation, a Texas corporation
("Convest").
RECITALS
A. Concurrently with the execution of this Agreement, Forcenergy, EDI
Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of
Forcenergy ("EDI"), COV Acquisition Corporation, a Texas corporation and wholly
owned subsidiary of Forcenergy ("COV"), Edisto and Convest have entered into an
Agreement and Plan of Merger, a copy of which is attached as Exhibit A hereto
(the "Merger Agreement"), which provides for the mergers (the "Mergers") of EDI
with and into Edisto and Convest with and into COV. Pursuant to the Merger
Agreement, upon consummation of the Mergers all outstanding capital stock of
Edisto and of Convest will be converted into the right to receive cash and stock
of Forcenergy and stock of Forcenergy, respectively.
B. Each Stockholder owns the number of shares of the outstanding Common
Stock, $.01 par value per share of Edisto or Convest as is indicated on Schedule
I of this Agreement (collectively, the "Shares").
C. The agreements of the Stockholders contained herein are in
consideration of the execution of the Merger Agreement by Forcenergy.
D. The directors and officers of Edisto and Convest have approved the
Mergers and believe the Mergers are in the best interest of such companies and
their stockholders.
NOW, THEREFORE, in consideration of the foregoing and subject to the terms
and conditions of the Merger Agreement the parties agree as follows:
1. AGREEMENT TO RETAIN SHARES.
1.1 TRANSFER AND ENCUMBRANCE. Stockholders agree not to transfer,
sell, exchange, pledge or otherwise dispose of or encumber the Shares or any New
Shares (as hereinafter defined) or to make any offer or agreement relating
thereto, at any time prior to the Expiration Date. As used herein, the term
"Expiration Date" shall mean the earlier to occur of (i) such date and time as
each of the Mergers shall have become effective in accordance with the terms and
provisions of the Merger Agreement (the "Effective Time"), (ii) the termination
of the Merger Agreement in accordance with Section 10(a)(i)(A), 10(a)(i)(B),
10(a)(i)(C), 10(a)(i)(F) or 10(a)(ii)(B) thereof or (iii) a termination of the
Merger Agreement in accordance with Section 10(a)(i)(D), 10(a)(i)(E) or
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10(a)(ii)(D) thereof and in which Edisto's Board of Directors determines in good
faith and after consultation with an independent financial advisor that such
Superior Proposal would result in the payment of consideration valued at a
minimum of $10.95 per share to the stockholders of Edisto in exchange for all
outstanding shares of Edisto common stock.
1.2 NEW SHARES. Stockholders agree that any shares of capital stock
of Edisto or Convest that Stockholders purchase or with respect to which
Stockholders otherwise acquire beneficial ownership after the date of this
Agreement and prior to the Expiration Date ("New Shares") shall be subject to
the terms and conditions of this Agreement to the same extent as if they
constituted Shares.
2. AGREEMENT TO VOTE SHARES. Unless the Merger Agreement is terminated
pursuant to the provisions of Section 10(a)(i)(A), 10(a)(i)(B), 10(a)(i)(C),
10(a)(i)(F) or 10(a)(ii)(B) thereof or the conditions of Section 1.1(iii) hereof
are met, at every meeting of the stockholders of Edisto or Convest held prior to
the Effective Time called with respect to any of the following, and at every
adjournment thereof, and on every action or approval by written consent of the
stockholders of Edisto or Convest with respect to any of the following,
Stockholders shall vote the Shares and any New Shares: (i) in favor of approval
of the Merger Agreement and the Mergers and any matter that could reasonably be
expected to facilitate the Mergers; and (ii) against approval of any proposal
made in opposition to the consummation of the Mergers and the Merger Agreement,
against any merger, consolidation, sale of assets, reorganization or
recapitalization with any party other than Forcenergy and its affiliates and
against any liquidation or winding up of Edisto or Convest (each of the
foregoing is referred to as an "Opposing Proposal"). Stockholders agree not,
directly or indirectly, to solicit or encourage any offer from any party
concerning the possible disposition of all or any substantial portion of
Edisto's or Convest's business assets or a controlling equity interest in Edisto
or Convest.
3. ADDITIONAL AGREEMENTS.
3.1 The Stockholders hereby consent to the release by the inclusion
in any press release relating to the Mergers of the following language:
Investment funds and accounts managed by TCW Special Credits and
Oaktree Capital Management, LLC, which hold slightly in excess of 51
percent of Edisto's common stock, have agreed to support the
proposed Mergers by their willingness to vote for the transaction.
In addition, such parties have contractually agreed not to sell 80%
of the stock of Forcenergy received in the transaction for a period
of six months from the consummation of the transaction.
3.2 The Stockholder acknowledges that the terms of this Agreement
will be required to be described, and this Agreement will be required to be
filed, in certain securities law filings relating to the Mergers.
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3.3 To the extent inconsistent with the provisions of this
Agreement, the Stockholder hereby revokes any and all proxies with respect to
the Shares or any other voting securities of Edisto or Convest.
3.4 Stockholder agrees not to transfer, sell, exchange, pledge or
otherwise dispose of or encumber any shares of common stock, par value $.01 per
share, of Forcenergy received pursuant to the Mergers (the "Stock") or to make
any offer or agreement relating thereto, at any time prior to 180 days from the
date that both of the Mergers shall have become effective in accordance with the
terms and provisions of the Merger Agreement; provided, however, that
notwithstanding the foregoing, Stockholder may transfer, sell, exchange, pledge
or otherwise dispose of or encumber up to 20% of the total number of shares of
Stock.
Notwithstanding anything to the contrary set forth herein, this
Agreement shall not restrict any representative, employee or agent of the
Stockholder from acting in accordance with such person's fiduciary duties as a
director of Edisto.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF STOCKHOLDER. Each
Stockholder represents, warrants and covenants as to itself to Forcenergy as of
the date hereof and the Closing Date of the Mergers as follows:
4.1 OWNERSHIP OF SHARES. Each Stockholder: (i) is the beneficial
owner of the Shares set forth on Schedule 1 hereto, which at the date of this
Agreement and at all times up until the Expiration Date will be free and clear
of any liens, claims, options, charges or other encumbrances; (ii) does not
beneficially own any shares of capital stock of Edisto or Convest other than the
Shares (excluding shares as to which Stockholder currently disclaims beneficial
ownership in accordance with applicable law); and (iii) has full power and
authority to make, enter into and carry out the terms of this Agreement. TCW
Special Credits and Oaktree Capital Management, LLC have full power and
authority to execute this Agreement on behalf of and to bind each of the
Stockholders to the terms of this Agreement.
4.2 NO PROXY SOLICITATIONS. Unless the Merger Agreement is
terminated pursuant to the provisions of Section 10(a)(i)(A), 10(a)(i)(B),
10(a)(i)(C), 10(a)(i)(F) or 10(a)(ii)(B) thereof or the conditions of Section
1.1(iii) hereof are met, Stockholders will not, and will not permit any entity
under Stockholders' control, to: (i) solicit proxies or take part in a
solicitation of proxies with respect to an Opposing Proposal or otherwise
encourage or assist any party in taking or planning any action that would
compete with, restrain or otherwise serve to interfere with or inhibit the
timely consummation of the Mergers in accordance with the terms of the Merger
Agreement; (ii) initiate a stockholders' vote or action by written consent of
Edisto or Convest stockholders with respect to an Opposing Proposal; or (iii)
enter into any agreement with any third party substantially similar to this
Agreement with respect to any voting securities of Edisto or Convest with
respect to an Opposing Proposal.
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4.3 NO CLAIMS. Stockholders do not have any claims, causes of
action, disputes, receivables, right of offset, lawsuits or any other claim
whatsoever, whether contingent or otherwise, against either Edisto or Convest or
any of their respective subsidiaries, officers, directors or employees.
5. REGISTRATION RIGHTS.
5.1 SHELF REGISTRATION. Within 120 days of the effective date of the
Mergers, Forcenergy shall file a "shelf" registration statement to register
under the Securities Act of 1933, as amended (the "Securities Act") the sale
from time to time of the shares of Stock and use reasonable efforts to obtain
the effectiveness of such registration statement within 180 days of the
effective date of the Mergers; PROVIDED, HOWEVER, that Forcenergy may defer its
obligations under this Section 5.1 for a period of no more than 30 days if
Forcenergy would be required to prepare financial statements other than those it
customarily prepares or Forcenergy determines in its reasonable judgment that
the registration and offering would have a material adverse effect on any
material financing, acquisition, corporate reorganization or other material
corporate transaction or development involving Forcenergy that is pending at the
time and promptly gives Stockholder notice of that determination (it being
understood, however, that, in any such event, Forcenergy shall use all
reasonable efforts to minimize the length of the postponement). The provisions
of this Section 5.1 are subject to the provisions of Section 5.4.
In the event of the issuance of any stop order suspending the
effectiveness of any registration statement or of any order suspending or
preventing the use of any prospectus or suspending the qualification of such
shares of Stock for sale in any jurisdiction, Forcenergy shall use its
reasonable efforts promptly to obtain its withdrawal.
5.2 PIGGYBACK REGISTRATION RIGHTS. Subject to the provisions of
Section 5.4, if Forcenergy at any time proposes to register any of its common
stock under the Securities Act (other than registrations on Forms S-4 or S-8 or
any successor forms thereof or registrations of securities in connection with a
Rule 145 transaction), whether of its own accord or at the request of any holder
or holders of its securities, it shall at such time promptly after the receipt
of a request from holder(s) of its securities or its own decision to initiate a
registration (but no later than ten business days) give written notice to the
Stockholder of its intention to do so.
Upon the written request of the Stockholders delivered to Forcenergy
within ten business days after receipt of any such notice, Forcenergy shall use
reasonable efforts (subject to the provisions of this Section 5.2) to cause all
shares of Stock, which Stockholders shall have so requested registration
thereof, to be registered under the Securities Act, all to the extent requisite
to permit the sale or other disposition by the Stockholder of such shares of
Stock; PROVIDED, HOWEVER, Forcenergy may elect not to file a registration
statement pursuant to this Section 5.2 or may withdraw any registration
statement filed pursuant to this Section 5.2 at any time prior to the effective
date hereof.
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If the managing underwriter for the offering advises that marketing
factors require the inclusion in such registration of some or all of the shares
of Stock sought to be registered by the Stockholders to be limited or that the
number of securities to be registered at the insistence of Forcenergy and any
other selling shareholders plus the number of shares of Stock sought to be
registered by the Stockholders should be limited due to marketing factors, the
number of shares of Stock sought to be registered by the Stockholders and such
other selling shareholders shall be reduced pro rata, based on the number of
securities sought to be registered by each Stockholder, Forcenergy or such other
selling shareholder, to the number recommended by the managing underwriter.
In connection with any offering involving an underwriting of shares
being issued by Forcenergy, Forcenergy shall not be required to include any of
the shares of Stock in such underwriting pursuant to Section 5.2 unless the
Stockholder accepts the terms of the underwriting as agreed upon between
Forcenergy and the underwriters.
The shares of Stock proposed to be registered under any registration
statement under Section 5.2 hereof shall be offered for sale at the same public
offering price as the shares of common stock of Forcenergy offered for sale by
Forcenergy or any other selling shareholder covered thereby.
5.3 EXPENSES OF REGISTRATION. All expenses incurred in connection
with the registrations of shares of Stock pursuant to this Article 5, including
without limitation (i) all state registration and qualification fees, (ii) all
printing, engineering and accounting fees, (iii) one-half of the Securities and
Exchange Commission registration fee, the fee payable to the National
Association of Securities Dealers, Inc. and (iv) all fees and disbursements of
counsel for Forcenergy, shall be borne by Forcenergy; PROVIDED, HOWEVER, that
Forcenergy shall not be required to pay, and the Stockholder shall payand any
underwriter discounts, commissions, and other underwriter compensation, to the
extent such fees, discounts, commissions and compensation relate to the shares
of Stock.
5.4 TERMINATION. Forcenergy shall not be required to maintain the
effectiveness of the registration statement contemplated by Section 5.1
following the expiration of one year from the effective date of the Mergers and
may de-register any shares of Stock covered by such registration statement after
such time. In addition, Forcenergy shall not be obligated to take any action to
effect any registration, qualification or compliance pursuant to Section 5.2,
and the provisions contained in Section 5.2 shall terminate and be of no force
and effect, following the expiration of one year from the effective date of the
Mergers.
6. TERMINATION. Other than with respect to the provisions of Sections 3.1,
3.2 and 3.4 and the provisions of Article 5, which provisions shall survive any
termination of this Agreement, this Agreement shall terminate and shall have no
further force or effect as of the Expiration Date.
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7. MISCELLANEOUS.
7.1 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
7.2 BINDING EFFECT AND ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by either
of the parties without the prior written consent of the other, except the rights
under Article 5 may be assigned if Stockholder sells all of its Shares in a
private transaction which complies with the terms of this Agreement.
7.3 AMENDMENTS AND MODIFICATION. This Agreement may not be modified,
amended, altered or supplemented except by the execution and delivery of a
written agreement executed by the parties hereto.
7.4 SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF. The parties acknowledge
that Forcenergy will be irreparably harmed and that there will be no adequate
remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth herein. Therefore, it is agreed that, in addition to any
other remedies that may be available to Forcenergy upon any such violation,
Forcenergy shall have the right to enforce such covenants and agreements by
specific performance, injunctive relief or by any other means available to
Forcenergy at law or in equity.
7.5 NOTICES. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed to have been duly given on the date of
delivery if delivered by hand delivery or by facsimile to the persons identified
below or two days after mailing by air courier addressed as follows:
If to Forcenergy:
Forcenergy Inc
2730 SW 3rd Avenue
Suite 800
Miami, Florida 33129-2237
Attn: Stig Wennerstrom
Telecopy: (305) 856-4300
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With a copy to:
Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
Attn: John F. Wombwell
Telecopy: (713) 220-4285
If to Stockholder:
To the address for notice set forth on the last page hereof.
With a copies to:
Edisto Resources Corporation
Convest Energy Corporation
2401 Fountainview Drive, Suite 700
Houston, Texas 77057
Attn: Michael Y. McGovern
Telecopy: (713) 780-8146
and
Snell & Smith, P.C.
1000 Louisiana, Suite 3650
Houston, Texas 77002
Attn: Paul E. Pryzant
Telecopy: (713) 651-8010
Such addresses may be changed from time to time by means of a notice given
in the manner provided in this section.
7.6 GOVERNING LAW. This Agreement shall be governed by, construed
and enforced in accordance with the internal laws of the State of Delaware.
7.7 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties in respect of the subject matter hereof, and
supersedes all prior negotiations and understandings between the parties with
respect to such subject matter.
7.8 COUNTERPARTS. This agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
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7.9 EFFECT OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
7.10. ATTORNEYS' FEES. In the event of any legal actions or
proceeding to enforce or interpret the provisions hereof, the prevailing party
shall be entitled to reasonable attorneys' fees, whether or not the proceeding
results in a final judgment.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
FORCENERGY INC EACH FUND AND ACCOUNT SET FORTH
ON SCHEDULE 1 HERETO
By: TCW Special Credits, as general partner
By: /S/ J. RUSSELL PORTER or investment manager of the funds and
Name: J. Russell Porter accounts set forth on Schedule 1
Title: Vice President
By: TCW Asset Management Company,
its managing general partner
By:/S/ BRUCE A. KARSH
Name: Bruce A. Karsh
Title: Authorized Signatory
By:/S/ KENNETH LIANG
Name: Kenneth Liang
Title: Authorized Signatory
Affiliate's Address for Notice:
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attn: Kenneth Liang
Fax No. (213) 694-1599
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EACH FUND AND ACCOUNT SET FORTH
ON SCHEDULE 2 HERETO
By: Oaktree Capital Management, LLC, as
general partner or investment manager
of the funds and accounts set forth on
Schedule 2
By:/S/ BRUCE A. KARSH
Name: Bruce A. Karsh
Title: President
By:/S/ SHELDON M. STONE
Name: Sheldon M. Stone
Title: Principal
Affiliate's Address for Notice:
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attn: Kenneth Liang
Fax No. (213) 694-1599
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SCHEDULE 1
Shares of
Funds and Accounts Edisto Common Stock
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The Board of Trustees of the Delaware State Employees
Retirement Fund, separate account 222,661
TCW Special Credits Fund III 2,019,176
TCW Special Credits Fund IIIb 1,667,991
The Common Fund for Bond Investments, separate account 112,176
Weyerhaeuser Company Master Retirement Trust,
separate account 991,550
TCW Special Credits Trust 889,520
TCW Special Credits Trust IIIb 1,191,100
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7,094,174
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SCHEDULE 2
Shares of
Funds and Accounts Edisto Common Stock
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OCM High Yield Trust 71,970
OCM High Yield Limited Partnership 38,100
Master Pension Trust of Pacific Telesis Group,
separate account 100,902
Hughes Aircraft Company Master Retirement Trust,
separate account 11,500
San Diego County Employees Retirement Association,
separate account 5,630
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228,102
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