UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 1)
Under the Securities Exchange Act of 1934
WRT ENERGY CORPORATION
(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
92931K-40-3
(CUSIP Number)
Arthur H. Amron
411 West Putnam Avenue
Greenwich, CT 06830
(203) 862-7012
(Name, address and telephone number of person
authorized to receive notices and communications)
July 11, 1997
(Date of event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box. [ ].
NOTE: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not
be deemed to be "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Management LLC
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Connecticut
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
2,309,440
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
2,309,440
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
2,309,440
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
11.4%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
00
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSONS
DLB Oil & Gas, Inc.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP *
(a) [X]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS WC, BK
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Oklahoma
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
10,354,198
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
- 0 -
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
10,354,198
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
- 0 -
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
10,354,198
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES * [ ]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
51.1%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Spectrum Investors LLC
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
WC
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
14,694
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
14,694
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
14,694
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
0.1%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
OO
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Spectrum Fund I, L.P.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
14,694
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
14,694
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
14,694
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
0.1%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Spectrum Fund II, L.P.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
14,694
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
14,694
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
14,694
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
0.1%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Offshore Spectrum Fund
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
14,694
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
14,694
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
14,694
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
0.1%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
OO
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Spectrum Advisors, LLC
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
14,694
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
14,694
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
14,694
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
0.1%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
OO
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Special Situations 1996, L.P.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) []
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
WC
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
786,497
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
786,497
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
786,497
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
3.9%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Special Situations 1996 Institutional, L.P.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) []
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
WC
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
131,324
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
131,324
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
131,324
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
0.6%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Advisors, LLC
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) []
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
953,177
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
953,177
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
953,177
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
4.7%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
OO
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford-Euris Special Situations 1996, L.P.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
WC
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
223,830
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
223,830
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
223,830
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
1.1%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford-Euris Advisors, LLC
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
223,830
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
223,830
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
223,830
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
1.1%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
OO
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Special Situations 1996, Limited
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
WC
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
35,356
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
35,356
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
35,356
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
0.2%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
OO
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Capital Partners II, L.P.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
WC
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
941,917
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
941,917
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
941,917
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
4.6%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Capital II, L.P.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
941,917
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
941,917
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
941,917
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
4.6%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Capital Corporation
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
941,917
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
941,917
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
941,917
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
4.6%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Overseas Partners I, L.P.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
WC
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
175,822
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
175,822
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
175,822
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
0.9%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Capital Overseas, L.P.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
175,822
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
175,822
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
175,822
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
0.9%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Wexford Capital Limited
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
175,822
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
175,822
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
175,822
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
0.9%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
OO
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Charles E. Davidson
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
12,663,638
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
12,663,638
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
12,663,638
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
62.5%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
- ------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
Schedule 13D
CUSIP NO. 92931K-40-3
- ------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
Joseph M. Jacobs
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
(Intentionally Omitted)
- ------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- ------------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ------------------------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER
None
SHARES ---------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
2,309,440
OWNED BY ---------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
None
REPORTING ---------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
2,309,440
- ------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
2,309,440
- ------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- ------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
11.4%
- ------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
- ------------------------------------------------------------------------------
SEE INSTRUCTIONS BEFORE FILLING OUT!
This statement on Schedule 13D (the "Statement") initially filed on July
22, 1997, by (a) Wexford Management LLC, (b) Wexford Special Situations 1996
Limited, (c) Wexford Spectrum Investors LLC, (d) Wexford Special Situations
1996, L.P., (e) Wexford Special Situations 1996 Institutional, L.P., (f)
Wexford-Euris Special Situations 1996, L.P., (g) Wexford Capital Partners II,
L.P., (h) Wexford Overseas Partners I, L.P., (i) Wexford Advisors, LLC, (j)
Wexford-Euris Advisors, LLC, (k) Wexford Spectrum Advisors, LLC, (l) Wexford
Capital Corporation, (m) Wexford Capital Limited, (n) Charles E. Davidson and
(o) Joseph M. Jacobs, with respect to the shares of Common Stock, par value
$0.01 per share (the "Common Stock"), of WRT Energy Corporation, a Delaware
corporation ("WRT"), beneficially owned by such persons, is hereby amended and
restated in its entirety by this Amendment No. 1 to the Statement as follows:
ITEM 1. SECURITY AND ISSUER.
This Statement is filed with the Securities and Exchange Commission
by persons named in Item 2 below and relates to the Common Stock of WRT. WRT's
principal executive offices are located at 1601 N.W. Expressway, Suite 700,
Oklahoma City, Oklahoma 73118-1401.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed by (a) Wexford Management LLC, a
Connecticut limited liability company ("Wexford Management"), (b) Wexford
Special Situations 1996, Limited, a Cayman Islands company ("Wexford Cayman"),
(c) Wexford Spectrum Investors LLC, a Delaware limited liability company
("Wexford Spectrum"),(d) Wexford Special Situations 1996, L.P. and Wexford
Special Situations 1996 Institutional, L.P., each a Delaware limited
partnership (the "Special Funds"), (e) Wexford-Euris Special Situations 1996,
L.P., a Delaware limited partnership ("Wexford-Euris"), (f) Wexford Capital
Partners II, L.P., a Delaware limited partnership ("Wexford Capital"),(g)
Wexford Overseas Partners I, L.P., a Cayman Islands exempted limited
partnership ("Wexford Overseas"), (h) Wexford Spectrum Fund I, L.P. and
Wexford Spectrum Fund II, L.P., each a Delaware limited partnership (the
"Wexford Spectrum Funds" and, together with the Special Funds, Wexford-Euris,
Wexford Capital and Wexford Overseas, the "Wexford Funds"), (i) Wexford
Offshore Spectrum Fund, a Cayman Islands exempted company ("Wexford Offshore
Fund") (j) Wexford Advisors, LLC, a Delaware limited liability company (the
"Special General Partner"), (k) Wexford-Euris Advisors, LLC, a Delaware
limited liability company (the "Euris General Partner"), (l) Wexford Spectrum
Advisors, LLC, a Delaware limited liability company ("Wexford Advisors"), (m)
Wexford Capital II, L.P., a Delaware limited partnership ("Wexford Capital
II"), (n) Wexford Capital Corporation, a Delaware corporation (the "Wexford
Capital General Partner"),(o) Wexford Capital Overseas, L.P., a Cayman Islands
limited partnership ("Wexford Capital Overseas"), (p) Wexford Capital Limited,
a Cayman Islands company (the "Wexford Overseas General Partner"), (q) Charles
E. Davidson , (r) Joseph M. Jacobs and (s) DLB Oil & Gas, Inc. an Oklahoma
corporation ("DLB") (the individuals and entities referred to above,
collectively, the "Reporting Persons") with respect to shares of Common Stock
beneficially owned by the Reporting Persons.
Wexford Management serves as investment manager to the Wexford
Funds, as manager to Wexford Spectrum and as investment sub-advisor to Wexford
Cayman and to Wexford Offshore Fund. Wexford Management's principal business
and principal office address is 411 West Putnam Avenue, Greenwich, CT 06830.
As the investment manager, manager or sub-advisor, as the case may be, to the
Wexford Funds, Wexford Spectrum, Wexford Cayman and Wexford Offshore Fund,
Wexford Management has full power and authority to supervise those entities'
investments and cause those entities to purchase or sell any asset and enter
into any other investment related transaction, including lending securities,
exercising control over a company and exercising voting or approval rights.
The Wexford Funds, Wexford Spectrum, Wexford Cayman and Wexford
Offshore Fund are private investment funds organized for the purpose of
seeking capital appreciation and interest and dividend income through
investments in companies, securities, other financial instruments, real estate
and related derivative instruments and mortgages, and any and all other types
of investments determined as appropriate by their respective general partners
and members, as the case may be. Their principal business and principal
office address is c/o Wexford Management LLC, 411 West Putnam Avenue,
Greenwich CT 06830 (in the case of the Wexford Funds and Wexford Spectrum) and
c/o Hemisphere Fund Managers Limited, Harbour Centre, Third Floor, George
Town, Grand Cayman, Cayman Islands, B.W.I. (in the case of Wexford Cayman and
Wexford Offshore Fund).
The principal business and activity of each of the Special General
Partner, the Euris General Partner, the Wexford Capital General Partner and
the Wexford Overseas General Partner is to act as general partner of the
Special Funds, Wexford-Euris, Wexford Capital II and Wexford Capital Overseas,
respectively. In addition, the Special General Partner acts as the investment
advisor to Wexford Cayman and, in such capacity, has the power and authority
similar to Wexford Management's in its capacity as the investment advisor to
the Wexford Funds. Their principal business and principal office address is
c/o Wexford Management LLC, 411 West Putnam Avenue, Greenwich, CT 06830.
The principal business and activity of Wexford Advisors is to act as
the general partner of the Wexford Spectrum Funds. The principal business and
principal office address of Wexford Advisors is c/o Wexford Management LLC,
411 West Putnam Avenue, Greenwich, CT 06830.
The principal business and activity of Wexford Capital II is to act
as general partner to Wexford Capital and the principal business and activity
of Wexford Capital Overseas is to act as general partner to Wexford Overseas.
Their principal business and principal office address is c/o Wexford
Management LLC, 411 West Putnam Avenue, Greenwich, CT 06830.
Charles E. Davidson is Chairman of each of Wexford Management, DLB,
the Special General Partner and the Euris General Partner, and is the
President and sole director of the Wexford Capital General Partner. In
addition, Mr. Davidson is the Chairman of Wexford Advisors and the President
and a director of the Wexford Overseas General Partner. Mr. Davidson owns
48.05% of Wexford Management, 57.0% of DLB, 49% of each of the Euris General
Partner, the Special General Partner and the Wexford Capital General Partner,
and 25% of Wexford Advisors. Mr. Davidson also is a member of the Board of
Directors of WRT. His principal business and principal office address is c/o
Wexford Management LLC, 411 West Putnam Avenue, Greenwich CT 06830. Mr.
Davidson is a citizen of the United States of America.
Joseph M. Jacobs is President and Managing Member of Wexford
Management, a director of Wexford Cayman and President of the Special General
Partner, the Euris General Partner and Wexford Advisors. Mr. Jacobs is also a
Vice President of the Wexford Capital General Partner. Mr. Jacobs owns 48.05%
of Wexford Management and 49% of each of the Special General Partner, the
Euris General Partner and the Wexford Capital General Partner. Mr. Jacobs
also owns 25% of Wexford Advisors. His principal business and principal
office address is c/o Wexford Management LLC, 411 West Putnam Avenue,
Greenwich CT 06830. Mr. Jacobs is a citizen of the United States of America.
The principal business of DLB is oil and gas exploration,
development and production, and the acquisition of oil-producing properties.
DLB's principal business and principal office address is located at 1601 N.W.
Expressway, Suite 700, Oklahoma City, Oklahoma 73118-1401.
Christopher Wetherhill is a director and the President of Wexford
Cayman. His principal business and principal office address is Hemisphere
House, 9 Church Street, Hamilton Bermuda. He is a citizen of Great Britain.
Patralea Robinson is a director of Wexford Cayman. Her principal
business and principal office address is Hemisphere House, 9 Church Street,
Hamilton Bermuda. She is a citizen of Great Britain.
Thomas S. Healy is a director and the Treasurer of Wexford Cayman.
His principal business and principal office address is Hemisphere House, 9
Church Street, Hamilton Bermuda. He is a citizen of Ireland.
Stuart Drake is a director of Wexford Cayman. His principal
business and principal office address is Hemisphere House, 9 Church Street,
Hamilton Bermuda. He is a citizen of Great Britain.
Madeline Reape is the Secretary of Wexford Cayman. Her principal
business and principal office address is Hemisphere House, 9 Church Street,
Hamilton Bermuda. She is a citizen of Bermuda.
Mike Liddell is the Chief Executive Officer of DLB. His principal
business and principal office address is 1601 N.W. Expressway, Suite 700,
Oklahoma City, Oklahoma 73118-1401. He is a citizen of the United States.
Mr. Liddell is also on the Board of Directors of WRT.
Mark Liddell is the President of DLB. His principal business and
principal office address is 1601 N.W. Expressway, Suite 700, Oklahoma City,
Oklahoma 73118-1401. He is a citizen of the United States. Mr. Liddell is
also on the Board of Directors of WRT.
Gary C. Hanna is the Executive Vice President of DLB. His principal
business and principal office address is 1601 N.W. Expressway, Suite 700,
Oklahoma City, Oklahoma 73118-1401. He is a citizen of the United States.
Mr. Hanna is also the President of WRT.
Ronald Youtsey is the Senior Vice President of DLB. His principal
business and principal office address is 1601 N.W. Expressway, Suite 700,
Oklahoma City, Oklahoma 73118-1401. He is a citizen of the United States.
Mr. Youtsey is also the Secretary and Treasurer of WRT.
None of the persons referred to in this Item 2 has, during the last
five years, (a) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, Federal or state securities laws or finding any violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The aggregate number of shares of Common Stock beneficially owned
and the net investment cost of such Common Stock is as follows:
Aggregate Number
of Shares of
Reporting Person Common Stock Net Investment Cost
Wexford Special Situations
1996, L.P. 786,497 2,750,656
Wexford Special Situations 1996
Institutional, L.P. 131,324 455,557
Wexford Special Situations
1996, Limited 35,356 122,753
Wexford-Euris Special Situations
1996, L.P. 223,830 788,484
Wexford Spectrum Investors LLC 14,694 69,161
Wexford Capital Partners II, L.P. 941,917 3,559,120
Wexford Overseas Partners I, L.P. 175,822 664,490
DLB Oil & Gas, Inc. 10,354,198 33,800,000
Total 12,663,638 $42,210,221
The funding relating to the Common Stock acquired by the Wexford
Funds, Wexford Spectrum and Wexford Cayman was provided from their capital.
The funding relating to the Common Stock acquired by DLB was
provided from its working capital and funds made available through (i) a
credit facility, as set forth in the Credit Agreement, dated as of March 5,
1997, among DLB, the Chase Manhattan Bank, as Agent for the Lenders, and the
Lenders named therein as amended by the First Amendment to the Credit
Agreement, dated March 12, 1997, the Second Amendment to the Credit Agreement,
dated March 31, 1997, and the Third Amendment to the Credit Agreement, dated
July 11, 1997, which provides for the borrowing of up to $85,000,000, and (ii)
a credit facility, as set forth in the Credit Agreement, dated as of July 11,
1997, among Bonray Drilling Corporation, the Subsidiary Guarantors as named
therein and Lehman Commercial Paper Inc., which provides for the borrowing of
up to $23,000,000.
ITEM 4. PURPOSE OF TRANSACTION.
The acquisition of the Common Stock was made in connection with the
reorganization of WRT pursuant to, and for the purposes set forth in: (a) the
Debtor's and DLBW's Second Amended Joint Plan Of Reorganization Under Chapter
11 Of The United States Bankruptcy Code, dated as of March 11, 1997 (as
modified by the technical modifications set forth in the Joint Motion for
Approval of Technical Modifications to the Plan of Reorganization and those
announced at the Confirmation, is hereinafter referred to as the "Plan"),
which is Exhibit C hereto; (b) the Debtor's and DLBW's Second Amended Joint
Disclosure Statement Under 11 U.S.C. in support of the Plan (the "Disclosure
Statement"), which is Exhibit D hereto; and (c) the Commitment Agreement,
dated as of January 20, 1997, by and among WRT, DLB and Wexford Management
(the "Commitment Agreement"), attached hereto as Exhibit E.
None of the Reporting Persons has formulated any plans or proposals
which relate to or would result in any matter required to be disclosed in
response to paragraphs (a) through (j) of Item 4 of Schedule 13D, except as
set forth in the following documents incorporated herein by reference: (a) the
Plan, including, without limitation, Articles 27, 29, 31 and 33 thereof; (b)
the Disclosure Statement, including, without limitation, Sections I, VII, VIII
and XII thereof; (c) the Commitment Agreement, including, without limitation,
Article II thereof; (d) the Warrant Agreement, dated as of July 10, 1997, by
and between American Stock Transfer and Trust Company and WRT (the "Warrant
Agreement"), attached hereto as Exhibit F; (e) the Registration Rights
Agreement, dated as of July 10, 1997, by and among WRT, DLB and Wexford
Management (the "Registration Rights Agreement"), attached hereto as Exhibit
G, including, without limitation, Section 2 thereof; (f) the Restated
Certificate of Incorporation of WRT, dated as of July 10, 1997 (the
"Charter"), attached hereto as Exhibit H, including, without limitation,
Section VII thereof; (g) the By-Laws of WRT (the "By-Laws"), attached hereto
as Exhibit I, including, without limitation, Article III thereof; (h) the
Subscription Rights Agreement, by and between WRT and IBJ Schroder Bank &
Trust Company (the "Subscription Rights Agreement"), attached hereto as
Exhibit J, including, without limitation, Sections 4 and 5 thereof; (i) the
Liquidating Trust Agreement, dated as of July 10, 1997, by and among WRT and
Goldin Associates L.L.C., as trustee (the "Liquidating Trust Agreement"),
attached hereto as Exhibit K, including, without limitation, Section 5
thereof; (j) the Disbursing Services Agreement, dated as of May 2, 1997, by
and between WRT and IBJ Schroder Bank & Trust Company (the "Disbursing
Services Agreement"), attached hereto as Exhibit L, including, without
limitation, Section 7 thereof; (k) the Agreement and Plan of Merger, dated as
of July 10, 1997 (the "Agreement and Plan of Merger"), which is Exhibit M
hereto; (l) the Purchase, Sale and Cooperation Agreement, dated as of March
11, 1997, by and between Texaco Exploration and Production, Inc. and DLB (the
"Purchase, Sale and Cooperation Agreement"), which is Exhibit N hereto; (m)
the press release issued by DLB, dated July 16, 1997 (the "Press Release"),
which is Exhibit O hereto; and (n) the Notice of Effective Date, giving notice
that on July 11, 1997, the Plan became effective pursuant to its terms and
conditions (the "Notice of Effective Date"), which is Exhibit P hereto.
All of the foregoing are exhibits hereto and are incorporated herein by
reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The Reporting Persons may be deemed to own beneficially the
respective percentages and numbers of outstanding shares of Common Stock set
forth below (on the basis of 20,276,257 shares of Common Stock of WRT
outstanding, which, based upon the Form 8-K of WRT, filed July 22, 1997, is
the number of shares outstanding as of July 16, 1997).
A. Wexford Management LLC
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 11.4%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 2,309,440
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition
2,309,440
(c) Other than as reported in items 3 and 4 above, there were no
transactions by Wexford Management in connection with the
Common Stock during the past 60 days.
(d) Wexford Management may be deemed to have the right to receive
or the power to direct the receipt of dividends from, or
proceeds from the sale of, the Common Stock. The filing of
this Statement shall not be construed as an admission that
Wexford Management is, for the purposes of Section 13(d) of
the Act, the beneficial owner of any securities covered by this
Statement.
(e) Not applicable.
B. Wexford Special Situations 1996, L.P.
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 3.9%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 786,497
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
786,497
(c) Other than as reported in items 3 and 4 above, there were no
transactions by Wexford Special Situations 1996, L.P. in
connection with the Common Stock during the past 60 days.
(d) Wexford Special Situations 1996, L.P. may be deemed to have the
right to receive or the power to direct the receipt of
dividends from, or proceeds from the sale of, the Common Stock.
(e) Not applicable.
C. Wexford Special Situations 1996 Institutional, L.P.
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 0.6%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 131,324
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
131,324
(c) Other than as reported in items 3 and 4 above, there were no
transactions by Wexford Special Situations 1996 Institutional,
L.P. in connection with the Common Stock during the past 60
days.
(d) Wexford Special Situations 1996 Institutional, L.P. may be
deemed to have the right to receive or the power to direct the
receipt of dividends from, or proceeds from the sale of, the
Common Stock.
(e) Not applicable.
D. Wexford Advisors, LLC
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 4.7%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 953,177
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
953,177
(c) No transactions in connection with the Common Stock during the
past 6O days.
(d) The Special General Partner may be deemed to have the right to
receive or the power to direct the receipt of dividends from,
or proceeds from the sale of, the Common Stock. The filing of
this Statement shall not be construed as an admission that
the Special General Partner is, for the purposes of Section
13(d) of the Act, the beneficial owner of any securities
covered by this Statement.
(e) Not applicable.
E. Wexford Special Situations 1996, Limited
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 0.1%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 35,356
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
35,356
(c) Other than as reported in items 3 and 4 above, there were no
transactions by Wexford Cayman in connection with the Common
Stock during the past 60 days.
(d) Wexford Cayman may be deemed to have the right to receive or
the power to direct the receipt of dividends from, or proceeds
from the sale of, the Common Stock.
(e) Not applicable.
F. Wexford-Euris Special Situations 1996, L.P.
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 1.1%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 223,830
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
223,830
(c) Other than as reported in items 3 and 4 above, there were no
transactions by Wexford-Euris in connection with the Common
Stock during the past 60 days.
(d) Wexford-Euris may be deemed to have the right to receive or the
power to direct the receipt of dividends from, or proceeds from
the sale of, the Common Stock.
(e) Not applicable.
G. Wexford-Euris Advisors, LLC
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 1.1%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 223,830
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
223,830
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) The Euris General Partner may be deemed to have the right to
receive or the power to direct the receipt of dividends from,
or proceeds from the sale of, the Common Stock. The filing of
this Statement shall not be construed as an admission that
the Euris General Partner is, for the purposes of Section 13(d)
of the Act, the beneficial owner of any securities covered by
this Statement.
(e) Not applicable.
H. Wexford Spectrum Investors LLC
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 0.1%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 14,694
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
14,694
(c) Other than as reported in items 3 and 4 above, there were no
transactions by Wexford Spectrum in connection with the Common
Stock during the past 60 days.
(d) Wexford Spectrum may be deemed to have the right to receive or
the power to direct the receipt of dividends from, or proceeds
from the sale of, the Common Stock.
(e) Not applicable.
I. Wexford Spectrum Fund I, L.P.
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 0.1%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 14,694
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
14,694
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) Wexford Spectrum Fund I, L.P. may be deemed to have the right
to receive or the power to direct the receipt of dividends
from, or proceeds from the sale of, the Common Stock. The
filing of this Statement shall not be construed as an admission
that Wexford Spectrum Fund I, L.P. is, for the purposes of
Section 13(d) of the Act, the beneficial owner of any
securities covered by this Statement.
(e) Not applicable.
J. Wexford Spectrum Fund II, L.P.
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 0.1%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 14,694
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
14,694
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) Wexford Spectrum Fund II, L.P. may be deemed to have the right
to receive or the power to direct the receipt of dividends
from, or proceeds from the sale of, the Common Stock. The
filing of this Statement shall not be construed as an admission
that Wexford Spectrum Fund II, L.P. is, for the purposes of
Section 13(d) of the Act, the beneficial owner of any
securities covered by this Statement.
(e) Not applicable.
K. Wexford Offshore Spectrum Fund
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 0.1%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 14,694
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
14,694
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) Wexford Offshore Fund may be deemed to have the right to
receive or the power to direct the receipt of dividends
from, or proceeds from the sale of, the Common Stock. The
filing of this Statement shall not be construed as an admission
that Wexford Offshore Fund is, for the purposes of Section
13(d) of the Act, the beneficial owner of any securities
covered by this Statement.
(e) Not applicable.
L. Wexford Spectrum Advisors, LLC
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 0.1%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 14,694
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
14,694
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) Wexford Advisors may be deemed to have the right to
receive or the power to direct the receipt of dividends from,
or proceeds from the sale of, the Common Stock. The filing of
this Statement shall not be construed as an admission that
Wexford Advisors is, for the purposes of Section 13(d) of the
Act, the beneficial owner of any securities covered by this
Statement.
(e) Not applicable.
M. Wexford Capital Partners II, L.P.
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 4.6%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 941,917
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
941,917
(c) Other than as reported in items 3 and 4 above, there were no
transactions by Wexford Capital in connection with the Common
Stock during the past 60 days.
(d) Wexford Capital may be deemed to have the right to receive or
the power to direct the receipt of dividends from, or proceeds
from the sale of, the Common Stock.
(e) Not applicable.
N. Wexford Capital II, L.P.
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 4.6%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 941,917
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
941,917
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) Wexford Capital II may be deemed to have the right to receive
or the power to direct the receipt of dividends from, or
proceeds from the sale of, the Common Stock. The filing of
this Statement shall not be construed as an admission that
Wexford Capital II is, for the purposes of Section 13(d)
of the Act, the beneficial owner of any securities covered by
this Statement.
(e) Not applicable.
O. Wexford Capital Corporation
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 4.6%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 941,917
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
941,917
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) The Wexford Capital General Partner may be deemed to have the
right to receive or the power to direct the receipt of
dividends from, or proceeds from the sale of, the Common Stock.
The filing of this Statement shall not be construed as an
admission that the Wexford Capital General Partner is, for the
purposes of Section 13(d) of the Act, the beneficial owner of
any securities covered by this Statement.
(e) Not applicable.
P. Wexford Overseas Partners I, L.P.
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 0.9%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 175,822
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
175,822
(c) Other than as reported in items 3 and 4 above, there were no
transactions by Wexford Overseas in connection with the Common
Stock during the past 60 days.
(d) Wexford Overseas may be deemed to have the right to receive or
the power to direct the receipt of dividends from, or proceeds
from the sale of, the Common Stock.
(e) Not applicable.
Q. Wexford Capital Overseas, L.P.
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 0.9%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 175,822
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
175,822
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) Wexford Capital Overseas may be deemed to have the right to
receive or the power to direct the receipt of dividends from,
or proceeds from the sale of, the Common Stock. The filing of
this Statement shall not be construed as an admission that
Wexford Capital Overseas is, for the purposes of Section 13(d)
of the Act, the beneficial owner of any securities covered by
this Statement.
(e) Not applicable.
R. Wexford Capital Limited
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 0.9%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 175,822
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
175,822
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) The Wexford Overseas General Partner may be deemed to have the
right to receive or the power to direct the receipt of
dividends from, or proceeds from the sale of, the Common Stock.
The filing of this Statement shall not be construed as an
admission that the Wexford Overseas General Partner is, for the
purposes of Section 13(d) of the Act, the beneficial owner of
any securities covered by this Statement.
(e) Not applicable.
S. Charles E. Davidson
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 62.5%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 12,663,638
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
12,663,638
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) Mr. Davidson may be deemed to have the right to receive or the
power to direct the receipt of dividends from, or proceeds from
the sale of, the Common Stock. The filing of this Statement
shall not be construed as an admission that Mr. Davidson
is, for the purposes of Section 13(d) of the Act, the
beneficial owner of any securities covered by this Statement.
(e) Not applicable.
T. Joseph M. Jacobs
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 11.4%
(b) 1. Sole power to vote or to direct vote: None
2. Shared power to vote or to direct vote: 2,309,440
3. Sole power to dispose or to direct the disposition: None
4. Shared power to dispose or to direct the disposition:
2,309,440
(c) No transactions in connection with the Common Stock during the
past 60 days.
(d) Mr. Jacobs may be deemed to have the right to receive or the
power to direct the receipt of dividends from, or proceeds from
the sale of, the Common Stock. The filing of this Statement
shall not be construed as an admission that Mr. Jacobs is, for
the purposes of Section 13(d) of the Act, the beneficial owner
of any securities covered by this Statement.
(e) Not applicable.
U. DLB Oil & Gas, Inc.
(a) Aggregate number of shares of Common Stock beneficially owned:
Percentage: 51.1%
(b) 1. Sole power to vote or to direct vote: 10,354,198
2. Shared power to vote or to direct vote: None
3. Sole power to dispose or to direct the disposition:
10,354,198
4. Shared power to dispose or to direct the disposition: None
(c) Other than as reported in items 3 and 4 above, there were no
transactions by DLB in connection with the Common Stock during
the past 60 days.
(d) DLB may be deemed to have the right to receive or the power to
direct the receipt of dividends from, or proceeds from the sale
of, the Common Stock.
(e) Not applicable.
Wexford Management may, by reason of its status as investment
manager to the Wexford Funds, manager to Wexford Spectrum and investment sub-
advisor to Wexford Cayman and Wexford Offshore Fund, be deemed to own
beneficially the Common Stock of which the Wexford Funds, Wexford Spectrum,
Wexford Cayman and Wexford Offshore Fund possess beneficial ownership.
The Wexford Spectrum Funds and Wexford Offshore Fund may, by
reason of its status as members of Wexford Spectrum, be deemed to own
beneficially the Common Stock of which Wexford Spectrum possesses beneficial
ownership.
Wexford Advisors may, by reason of its status as a general partner
of the Wexford Spectrum Funds, be deemed to own beneficially the Common Stock
of which the Wexford Spectrum Funds possess beneficial ownership.
The Special General Partner may, by reason of its status as
general partner of the Special Funds, be deemed to own beneficially the Common
Stock of which the Special Funds possess beneficial ownership. The Special
General Partner may, by reason of its status as the investment advisor to
Wexford Cayman, be deemed to own beneficially the Common Stock of which
Wexford Cayman possesses beneficial ownership.
The Euris General Partner may, by reason of its status as the
general partner of Wexford-Euris, be deemed to own beneficially the Common
Stock of which Wexford-Euris possesses beneficial ownership.
Wexford Capital II may, by reason of its status as general partner
of Wexford Capital, be deemed to own beneficially the Common Stock of which
Wexford Capital possesses beneficial ownership
The Wexford Capital General Partner may, by reason of its status as
general partner of Wexford Capital II, be deemed to own beneficially the
Common Stock of which Wexford Capital II possesses beneficial ownership.
Wexford Capital Overseas may, by reason of its status as general
partner of Wexford Overseas, be deemed to own beneficially the Common Stock of
which Wexford Overseas possesses beneficial ownership.
The Wexford Overseas General Partner may, by reason of its status
as general partner of Wexford Capital Overseas, be deemed to own beneficially
the Common Stock of which Wexford Capital Overseas possesses beneficial
ownership.
Joseph M. Jacobs may, by reason of his position as President and
Managing Member of Wexford Management and his ownership of 48.05% of the
Common Stock of Wexford Management, be deemed to own beneficially the Common
Stock of which Wexford Management possesses beneficial ownership.
Charles E. Davidson may, by reason of his position as Chairman of
DLB and Wexford Management and his ownership of 57.0% and 48.05% of the Common
Stock of DLB and Wexford Management, respectively, be deemed to own
beneficially the Common Stock of which DLB and Wexford Management possesses
beneficial ownership.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
None of the persons identified in Item 2 above is a party to any
contract, arrangement, understanding or relationship (legal or otherwise) with
respect to any securities of the Issuer, except to the extent described in
Items 2 through 5 of this Statement and pursuant to the following exhibits to
this Statement: (a) the Plan, including, without limitation, Articles 7, 29,
31 and 33 thereof; (b) the Disclosure Statement, including, without
limitation, Section I thereof; (c) the Commitment Agreement; (d) the Warrant
Agreement; (e) the Registration Rights Agreement; (f) the Liquidating Trust
Agreement; (g) the Disbursing Services Agreement; and (h) the Subscription
Rights Agreement. All of the foregoing documents are exhibits hereto and are
incorporated herein by reference.
ITEM 7. ITEMS TO BE FILED AS EXHIBITS.
Exhibit A: Joint Acquisition Statement
Exhibit B: Power of Attorney
Exhibit C: Plan, incorporated by reference to exhibit 10.13 of
DLB's Report on Form 10-K, filed March 31, 1997 ("Form
10-K").*
Exhibit D: Disclosure Statement, incorporated by reference to
exhibit 10.13 on Form 10-K.*
Exhibit E: Commitment Agreement
Exhibit F: Warrant Agreement
Exhibit G: Registration Rights Agreement
Exhibit H: Charter
Exhibit I: By-Laws
Exhibit J: Subscription Rights Agreement
Exhibit K: Liquidating Trust Agreement
Exhibit L: Disbursing Services Agreement
Exhibit M: Agreement and Plan of Merger, incorporated by reference
to exhibit 2.1 of WRT's Report on Form 8-K, filed July
22, 1997 ("Form 8-K").*
Exhibit N: Purchase, Sale and Cooperation Agreement, incorporated
by reference to exhibit 10.14 on Form 10-K.*
Exhibit O: Press Release, incorporated by reference to exhibit
99.1 on Form 8-K.*
Exhibit P: Notice of Effective Date, incorporated by reference to
exhibit 99.2 on Form 8-K.*
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of
each of the Reporting Persons, each such person or entity certifies that the
information set forth in this statement is true, complete and correct and
agrees that this statement is filed on behalf of each of them.
Dated: July 28, 1997
WEXFORD MANAGEMENT LLC
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECIAL SITUATIONS 1996, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECIAL SITUATIONS 1996 INSTITUTIONAL,
L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD-EURIS SPECIAL SITUATIONS, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECIAL SITUATIONS 1996, LIMITED
By: Wexford Management LLC, its investment
sub-advisor
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECTRUM INVESTORS LLC
By: Wexford Management LLC, its manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECTRUM FUND I, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECTRUM FUND II, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD OFFSHORE SPECTRUM FUND
By: Wexford Management LLC, its investment
sub-advisor
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD CAPITAL PARTNERS II, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD OVERSEAS PARTNERS I, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD ADVISORS, LLC
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD-EURIS ADVISORS, LLC
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD SPECTRUM ADVISORS, LLC
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD CAPITAL II, L.P.
By: Wexford Capital Corporation, its general
partner
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD CAPITAL OVERSEAS, L.P.
By: Wexford Capital Limited, its general
partner
By: /s/ Charles E. Davidson
-----------------------
Name: Charles E. Davidson
Title: President
WEXFORD CAPITAL CORPORATION
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD CAPITAL LIMITED
By: /s/ Charles E. Davidson
------------------------
Name: Charles E. Davidson
Title: President
DLB OIL & GAS, INC.
By: /s/ Mike Liddell
-----------------------
Name: Mike Liddell
Title: Executive Vice President
/s/ Charles E. Davidson
-----------------------
Charles E. Davidson
/s/ Joseph M. Jacobs
--------------------
Joseph M. Jacobs
____________________
*By Howard E. Sullivan, attorney-in-fact.
EXHIBIT A
JOINT ACQUISITION STATEMENT
PURSUANT TO RULE 13d-1(f)(1)
----------------------------
The undersigned acknowledges and agrees that the foregoing statement
on Schedule 13D is filed on behalf of the undersigned and that any
subsequent amendments to this statement on Schedule 13D, shall be filed on
behalf of the undersigned without the necessity of filing additional
joint acquisition statements. The undersigned acknowledges that he shall be
responsible for the timely filing of such amendments, and for the completeness
and accuracy of the information concerning it contained therein, but shall not
be responsible for the completeness and accuracy of the information concerning
the others, except to the extent it knows or has reason to believe that such
information is inaccurate.
Dated: July 28, 1997
WEXFORD MANAGEMENT LLC
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECIAL SITUATIONS 1996, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECIAL SITUATIONS 1996 INSTITUTIONAL,
L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD-EURIS SPECIAL SITUATIONS, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECIAL SITUATIONS 1996, LIMITED
By: Wexford Management LLC, its investment
sub-advisor
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECTRUM INVESTORS LLC
By: Wexford Management LLC, its manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECTRUM FUND I, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD SPECTRUM FUND II, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD OFFSHORE SPECTRUM FUND
By: Wexford Management LLC, its investment
sub-advisor
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD CAPITAL PARTNERS II, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD OVERSEAS PARTNERS I, L.P.
By: Wexford Management LLC, its investment
manager
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Senior Vice President
WEXFORD ADVISORS, LLC
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD-EURIS ADVISORS, LLC
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD SPECTRUM ADVISORS, LLC
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD CAPITAL II, L.P.
By: Wexford Capital Corporation, its general
partner
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD CAPITAL OVERSEAS, L.P.
By: Wexford Capital Limited, its general
partner
By: /s/ Charles E. Davidson
-----------------------
Name: Charles E. Davidson
Title: President
WEXFORD CAPITAL CORPORATION
By: /s/ Arthur H. Amron*
-------------------
Name: Arthur H. Amron
Title: Vice President
WEXFORD CAPITAL LIMITED
By: /s/ Charles E. Davidson
------------------------
Name: Charles E. Davidson
Title: President
DLB OIL & GAS, INC.
By: /s/ Mike Liddell
-----------------------
Name: Mike Liddell
Title: Executive Vice President
/s/ Charles E. Davidson
-----------------------
Charles E. Davidson
/s/ Joseph M. Jacobs
--------------------
Joseph M. Jacobs
______________________
*By Howard E. Sullivan, attorney-in-fact.
Exhibit B
POWER OF ATTORNEY
The undersigned, Arthur H. Amron, hereby irrevocably constitutes
and appoints Howard E. Sullivan, whose address is c/o Wexford management LLC,
411 West Putnam Avenue, Greenwich CT 06830, as my true and lawful attorney,
with full power and authority, in my name, place and stead, as fully as could
I if personally present and acting:
(a) to act on my behalf with respect to all matters relating to
any Statement on Schedule 13D (including amendments thereto) with respect to
the Common Stock of WRT Energy Corporation; and
(b) generally to execute, deliver and file all certificates,
documents and filings, and to do all things and to take or forego any action
which he may deem necessary or desirable in connection with or to effectuate
the foregoing.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 29th day of July, 1997.
/s/ Arthur H. Amron
--------------------
Arthur H. Amron
Exhibit E
EXECUTION COPY
COMMITMENT AGREEMENT
COMMITMENT AGREEMENT, dated as of January 20, 1997, by and among WRT
Energy Corporation ("WRT"), a Texas corporation and a debtor and debtor-in-
possession in that certain voluntary proceeding under Chapter 11 of the
Bankruptcy Code referred to below, DLB Oil & Gas, Inc., an Oklahoma
corporation ("DLB"), the investment funds listed on the signature page hereof
(the "Wexford Funds") and Wexford Management LLC, a Connecticut limited
liability company, in its capacity as investment manager and as agent for the
Wexford Funds ("Wexford"; DLB and Wexford are collectively referred to herein
as "DLBW"). Unless the context otherwise requires, all capitalized terms
defined in the Plan (as defined below) and not otherwise defined herein shall
have the same meanings herein as in the Plan.
W I T N E S S E T H:
WHEREAS, on February 14, 1996, WRT filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court (the
United States Bankruptcy Court for the Western District of Louisiana,
Lafayette-Opelousas Division), commencing the Chapter 11 Case (Case No. 96BK-
50212);
WHEREAS, since the commencement of the Chapter 11 Case, WRT has
operated its business and held its assets and properties as a debtor-in-
possession under Section 1107 of the Bankruptcy Code;
WHEREAS, on October 22, 1996, WRT accepted and signed the proposal
submitted by DLBW on October 16, 1996 (the "DLBW Proposal") providing the
terms of a proposed capital investment in, and plan of reorganization for,
WRT;
WHEREAS, by order dated December 24, 1996 (the "Expense Order"), the
Bankruptcy Court approved the reimbursement by WRT of certain of the third-
party expenses incurred DLBW in connection with the DLBW Proposal;
WHEREAS, subsequent to WRT's execution of the DLBW Proposal, DLB
commenced negotiations with Texaco and TEPI regarding, inter alia, (i) the
claim asserted by Texaco and TEPI against WRT and its affiliates (the "Texaco
Claim"), (ii) the WCBB Assets and (iii) the CAOA;
WHEREAS, the intent of the parties to those negotiations was that
WRT would purchase the WCBB Assets from Texaco and TEPI;
WHEREAS, DLB has represented and WRT believes that Texaco and TEPI
have insisted that, because of concerns over WRT's financial status certain
time exigencies and other matters relating to that certain Global Settlement
Agreement, DLB be in the chain of title of the WCBB Assets and furthermore
that DLB guarantee, for Texaco's and TEPI's benefit, the cost of performance
of certain plugging and abandonment obligations with respect to the WCBB
Assets should New WRT fail to perform those obligations;
<PAGE>1
WHEREAS, as a result of the negotiations, Texaco, TEPI and DLB
reached an agreement embodied in the Purchase, Sale and Exchange Agreement
pursuant to which, inter alia, (i) DLB will purchase the Texaco Claim, (ii) as
required by Texaco and TEPI, DLB will purchase the WCBB Assets from TEPI, and
(iii) DLB will guarantee (the "P&A Guarantee") the performance of all plugging
and abandonment obligations related to both the WCBB assets and WRT's
interests in West Cote Blanche Bay Field and, in order to implement the P&A
Guarantee, will pay into a trust (the "P&A Trust") established for the benefit
of the State of Louisiana, $1,000,000 on or before the Effective Date and
certain other amounts;
WHEREAS, on January 20, 1997, WRT and DLBW have jointly filed the
Plan, which Plan contemplates, inter alia, (i) the issuance to WRT's unsecured
creditors, on account of their Allowed Claims, an aggregate of 10 million
shares of New WRT Common Stock, (ii) the issuance to WRT's unsecured
creditors, on account of their Allowed Claims, of the right to purchase an
additional three million eight hundred thousand shares of New WRT Common Stock
at a purchase price of $3.50 per share (the "Rights Offering"), (iii) the
exercise by DLBW of its rights to purchase New WRT Common Stock pursuant to
the Rights Offering on account of its Allowed Claims, (iv) the purchase by
DLBW of all shares of New WRT Common Stock not otherwise purchased pursuant to
the Rights Offering, and (v) pursuant to the Transfer and Exchange Agreement,
as part of the Plan, (a) the transfer by DLB of the WCBB Assets to WRT, (b) as
consideration for the transfer of the WCBB Assets, the issuance by DLB of the
P&A Guarantee and the making by DLB of payments into the P&A Trust, (1) the
delivery to DLB of (A) 5 million shares of New WRT Common Stock and (B) the
number of shares of New WRT Common Stock obtained by dividing the net amount
of capital expenditures incurred by DLB as of the Effective Date as owner of
the WCBB Assets and/or operator of the Shallow Contract Area, to the extent
not disapproved by the Bankruptcy Court, by a purchase price of $3.50 per
share, (2) transfer by WRT to DLB of the Buyer's Leasehold and Facilities and
(3) the assumption by DLB of the Assumed Obligations, and (c) the payment in
full of the Texaco Claim;
WHEREAS, WRT desires that DLB and Wexford enter into this Commitment
Agreement in order to evidence their respective commitments and obligations;
and
WHEREAS, WRT, DLB and Wexford are willing to enter into this
Commitment Agreement upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and for other good
and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the meanings set
forth in this Article I, in addition to the other capitalized terms defined in
the Plan.
<PAGE> 2
"Closing" shall mean the closing of the transactions contemplated by
this Commitment Agreement.
"Environmental Laws" shall mean all federal, state, local and
foreign laws and regulations relating to pollution or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened releases
of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
"Extant Bidder" shall mean each Person who (a) had, as of October
16, 1996, submitted to Jefferies & Company, Inc., as part of the formal
auction of WRT conducted by Jefferies & Company, Inc., either (i) a bid to
purchase all or any material part of the assets of WRT or (ii) a proposal for
a plan of reorganization for WRT or (b) was specifically identified as
providing the financing for such bid or proposed plan. An "Extant Bidder"
shall not include (x) any combination of an Extant Bidder with one or more
Persons that are not Extant Bidders, (y) any combination of two or more Extant
Bidders or (z) any combination of two or more Extant Bidders with one or more
Persons that are not Extant Bidders.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"Material Adverse Effect" shall mean, in connection with WRT or any
of its Subsidiaries, any change or effect that is materially adverse to the
business, operations, properties (including intangible properties), condition
(financial or otherwise), prospects or assets or liabilities of WRT and its
Subsidiaries taken as a whole.
"Materials of Environmental Concern" shall mean hazardous substances
as defined under the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss 9601, et seq. and hazardous wastes as defined under
the Resource Conservation and Recovery Act, 42 U.S.C. ss 6901, et seq. and
petroleum and petroleum products and such other chemicals, materials or
substances as are listed as "hazardous wastes", "hazardous materials", "toxic
substances", or words of similar import under any similar federal, state,
local or foreign laws.
"Permitted Liens" shall mean liens:
(a) for taxes, assessments or governmental charges or
levies if the same shall not at the time be delinquent or thereafter can be
paid without penalty or (if foreclosure, distraint, sale or other similar
proceedings shall not have been commenced) are being contested in good faith
and by appropriate proceedings diligently conducted, and such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been
made therefor;
<PAGE> 3
(b) of mechanics and materialmen for sums not yet due or
being contested in good faith and by appropriate proceedings diligently
conducted, if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor; or
(c) constituting easements, rights of way, restrictions and
other similar encumbrances, not interfering in a material respect with the
ordinary conduct of the business of WRT and not materially detracting from the
value or current or intended use of the property to which they are applicable.
"Plan" shall mean the Debtor's and DLBW's First Amended Joint Plan
of Reorganization Under Chapter 11 of the United States Bankruptcy Code, dated
as of January 20, 1997, attached hereto as Exhibit A, as may be amended with
the consent of DLB and Wexford.
"Subsidiary" shall mean any corporation or other entity, a majority
of the shares of capital stock or other equity interests of which are owned,
directly or indirectly, by WRT.
ARTICLE II
THE CLOSING
Section 2.01. Obligations of DLB and Wexford. In reliance upon the
representation, warranties, covenants and agreements of WRT and upon the terms
and subject to the conditions of this Commitment Agreement:
(a) DLB and Wexford, jointly and severally, agree to
subscribe for and purchase at the Closing from New WRT, in the amount
determined pursuant to the Plan and the New WRT Subscription Rights Agreement,
(i) their full pro rata share of the New WRT Subscription Common Stock granted
to DLB and Wexford pursuant to the Plan and the New WRT Subscription Rights
Agreement on account of any and all Claims and (ii) all of the remaining New
WRT Subscription Common Stock not otherwise subscribed for and purchased as a
result of either Unexercised Subscription Rights pursuant to the Plan or the
failure of the Rights Offering to occur (the "Backstop Shares"), and WRT
agrees to cause New WRT and the Disbursing Agent to issue and sell to DLB and
Wexford such New WRT Subscription Common Stock. Such New WRT Subscription
Common Stock shall be paid for in the amount of its related Subscription
Purchase Price in the manner provided for in the Plan.
(b) DLB and Wexford, jointly and severally, agree to pay at
the Closing to New WRT an amount of cash equal to the Disputed Subscription
Purchase Price (or such lesser amount with respect to Exercised Disputed
Claims as may be required pursuant to the Plan). Such payment shall be made
by wire transfer of immediately available funds to such account as WRT shall
designate in writing at least two (2) Business Days prior to the Closing.
(c) DLB agrees to execute the Transfer and Exchange
Agreement and, in accordance with its terms, and the terms of the Plan,
transfer the WCBB Assets to New WRT and designate New WRT as operator of the
Shallow Contract Area. In exchange for the transfer of the WCBB Assets to New
<PAGE> 4
WRT, the issuance of the P&A Guarantee and the payments into the P&A Trust,
(i) DLB shall receive at the Closing (A) 5 million shares of New WRT Common
Stock and (B) the number of shares of New WRT Common Stock obtained by
dividing the amount of capital expenditures incurred by DLB (net of any net
cash received by DLB as owner of the WCBB Assets or as operator of the Shallow
Contract Area) as of the Effective Date as owner of the WCBB Assets and/or
operator of the Shallow Contract Area, to the extent not disapproved by the
Bankruptcy Court, by a purchase price of $3.50 per share (collectively, the
"WCBB Shares") and (ii) WRT shall transfer to DLB the Buyer's Leasehold and
Facilities.
(d) At the discretion of DLB and Wexford, the payments due
WRT or New WRT under this Section 2.01 may be offset against any or all
payments that DLB, Wexford or the Wexford Funds would otherwise receive under
the Plan on the Effective Date.
(e) DLB and Wexford each agree to (i) vote all Claims held
by them to accept the Plan, and (ii) exercise any and all rights that they
have under the Plan on account of all Claims held by them in Classes C-1
through C-16 (including, without limitation, the Texaco Claim) (such Claims
being the "Exchangeable Claims") to elect to receive a Distribution of New WRT
Common Stock in lieu of a Distribution of Cash.
Section 2.02. Obligations of WRT. WRT agrees that it shall:
(a) In connection with the sale of the WCBB Assets by
Texaco and TEPI to DLB, WRT will (i) consent to the designation by Texaco and
TEPI of DLB (or its designee) as operator of the Shallow Contract Area under
the CAOA provided that DLB (or its designee) shall have become qualified as an
operator under Louisiana law; and (ii) waive any preference rights that WRT
may have under the CAOA arising from or related to such sale.
(b) Provide Texaco and TEPI with the ability to use certain
facilities in connection with TEPI's operation of the portion of the producing
Contract Area under, and as defined in the CAOA other than the Shallow
Contract Area, the use of such facilities to be on terms to be agreed.
(c) Execute the Transfer and Exchange Agreement and, in
accordance with its terms, (i) deliver to DLB on the Effective Date the WCBB
Shares and (ii) transfer to DLB on the Effective Date the Buyer's Leasehold
and Facilities.
Section 2.03. Closing. (a) The Closing shall take place at the
offices of Schulte Roth & Zabel LLP, 900 Third Avenue, New York, New York, or
at such other location as the parties may agree, on the Effective Date.
<PAGE> 5
(b) At the Closing:
(i) New WRT shall deliver to DLB and Wexford, jointly and
severally, certificates of New WRT Common Stock representing DLB's and
Wexford's pro rata portion of the New WRT Common Stock distributed to holders
of Allowed General Unsecured Claims pursuant to the Plan, in definitive form
and registered in the name(s) specified in writing by DLB and Wexford at least
two (2) Business Days prior to the Closing;
(ii) New WRT shall deliver to DLB and Wexford, jointly and
severally, against payment therefor, certificates of New WRT Subscription
Common Stock, in definitive form and registered in the name(s) specified in
writing by DLB and Wexford at least two (2) Business Days prior to the
Closing, representing DLB's and Wexford's pro rata portion of the New WRT
Subscription Common Stock subscribed for and purchased pursuant to Section
2.01(a)(i) hereof and the Backstop Shares subscribed for and purchased
pursuant to Section 2.01(a)(ii) hereof;
(iii) New WRT shall deliver to DLB, certificates of New
WRT Common Stock, in definitive form and registered in the name(s) specified
in writing by DLB at least two (2) Business Days prior to the Closing,
representing the WCBB Shares;
(iv) Pursuant to the terms of the Plan, WRT shall deliver
to DLB and Wexford, jointly and severally, certificates of New WRT Common
Stock to be distributed to them under the Plan on account of the Exchangeable
Claims.
(v) New WRT shall issue, and the Disbursing Agent shall
reserve, shares of New WRT Subscription Common Stock representing the Disputed
New WRT Subscription Common Stock to be held by the Disbursing Agent in a
Disputed Claims Reserve Account.
(c) At the Closing, each party to this Commitment Agreement
shall deliver to the other parties such other documents, instruments and
writings as may be required to be delivered in accordance with this Commitment
Agreement or as may be reasonably requested by such other party.
Section 2.04. Reliance by WRT and New WRT. Each of WRT and New WRT
shall be entitled to rely on and assume that it has fully satisfied its
obligations to both DLB and Wexford through any payment made or document
delivered to DLB and Wexford in accordance with any provision of this
Commitment Agreement; provided that such payment or delivery is made in the
manner specified by DLB and Wexford. The division of any such payment or
sharing of any such document shall be the sole responsibility of DLB and
Wexford and WRT shall have no obligations or liabilities relating thereto.
<PAGE> 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF WRT
WRT hereby represents and warrants, as of the execution and delivery
hereof, to DLB & Wexford as follows:
Section 3.01. Organization and Qualification. WRT is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Texas, and has full power and authority to own, operate
and lease its properties and to carry on its business as now being conducted.
WRT is duly qualified to do business as a foreign corporation in each
jurisdiction set forth on Schedule 3.01 hereto. Such jurisdictions are the
only jurisdictions in which the nature of WRT's properties and/or business
makes such qualification necessary, except where the failure to so qualify
would not have a Material Adverse Effect.
Section 3.02. Subsidiaries. Except for WRT Technology, Inc., WRT
does not have any Subsidiaries and, except as set forth on Schedule 3.02
hereto, to the best of its knowledge WRT is not a partner or joint venturer
with any person in any enterprise or undertaking. As of the Closing, New WRT
will have no Subsidiaries.
Section 3.03. Authority, Authorization and Validity. Subject to
approval of this Commitment Agreement by the Bankruptcy Court and the issuance
of the Confirmation Order, WRT has full power and authority to execute,
deliver and perform this Commitment Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Commitment Agreement by WRT, and the consummation by WRT of the
transactions contemplated hereby to be performed by WRT, have been duly
authorized by all requisite action of its Board of Directors and, if required,
shareholders of WRT, and this Commitment Agreement constitutes the valid and
binding obligation of WRT, enforceable against WRT in accordance with its
terms, subject, where applicable, to entry of the Confirmation Order.
Section 3.04. Capitalization. (a) Except as set forth on
Schedule 3.04 hereto, as of the date of this Commitment Agreement, there are
no outstanding securities of WRT or any of its Subsidiaries or any outstanding
subscriptions, options, warrants, calls or other commitments or agreements
(other than this Commitment Agreement) to which WRT is a party or by which it
is bound requiring the issuance by WRT of additional shares of capital stock
or other securities.
(b) The securities set forth on Schedule 3.04 hereto are
duly authorized, validly issued, fully paid and non-assessable and are free of
preemptive rights and entitle the holders thereof to all the rights of a
holder of such securities in accordance with the certificate of incorporation
and by-laws of WRT and the laws of the State of Texas.
<PAGE> 7
(c) The shares of New WRT Common Stock to be issued by New
WRT pursuant to this Commitment Agreement and/or the Plan, or upon exercise of
the New WRT Warrants pursuant to the New WRT Warrant Agreement, when so issued
as provided in the Plan and/or this Commitment Agreement, or pursuant to the
new WRT Warrant Agreement, as the case may be, will be duly authorized,
validly issued, fully paid and non-assessable and free of preemptive rights
and will entitle the holders thereof to all of the rights of a holder of New
WRT Common Stock in accordance with the New WRT Certificate of Incorporation,
the New WRT By-Laws and the laws of the State of Delaware.
Section 3.05. Approvals and Consents. Except for (i) approval
by the Bankruptcy Court of the provisions of this Commitment Agreement, (ii)
any required filings under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR Act") and the expiration or earlier termination of the
applicable waiting periods thereunder, and (iii) the issuance of the
Confirmation Order, no consent, approval, order or authorization of, and no
registration, declaration or filing with, any federal, state, local or foreign
government or governmental authority is required to be made or obtained by WRT
in connection with the execution and delivery by WRT of this Commitment
Agreement or the consummation by WRT of the transactions contemplated hereby
to be performed by WRT.
Section 3.06. No Conflicts. From and after the Effective Date,
the consummation of the Plan and the transactions contemplated thereby and
hereby will not conflict with, violate or result in any breach of any of the
terms, conditions or provisions of, or constitute a default under or result in
the creation of a lien (other than Permitted Liens), or the acceleration of
any obligation or the loss of a benefit under, (i) the New WRT Certificate of
Incorporation or the New WRT By-Laws, (ii) any note, indenture, deed of trust,
material lease, or other material instrument, contract or agreement to which
New WRT may then be a party or by which it or its respective properties and
assets may then be bound, or (iii) any law, ordinance, rule or regulation of
any government or governmental authority or judgment, order or decree of any
court or governmental authority.
Section 3.07. SEC Reports, Financial Statements. (a) WRT has
heretofore delivered to DLB and Wexford copies of (i) its Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 (the "WRT 10-K"), (ii)
its proxy or information statements relating to meetings of, or actions taken
without a meeting by, the stockholders of WRT held since January 1, 1996 and
(iii) all of the other reports, statements and schedules filed with the
Securities and Exchange Commission (the "Commission") since January 1, 1996.
(b) The WRT 10-K (i) was filed with the Commission on or
about June 12, 1996 and (ii) except as described in the Disclosure Statement
and the exhibits thereto, at the time of filing thereof did not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. As of its filing date, each such
other report or statement filed pursuant to the Securities Exchange Act of
<PAGE> 8
1934, as amended (the "Exchange Act"), complied as to form in all material
respects with the Exchange Act and did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they
were made, not misleading.
(c) No event has occurred since the filing of the WRT 10-K
which would necessitate the filing by WRT with the Commission of a Current
Report on Form 8-K, other than events with respect to which such a Current
Report on Form 8-K has been filed with the Commission and delivered to DLB and
Wexford and a Current Report on Form 8-K which will be filed to report the
transactions contemplated hereby.
Section 3.08. Financial Statement. The audited consolidated balance
sheets of WRT and Subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for each of the three fiscal years in the period ended December
31, 1995 (the "Historical WRT Financial Statements"), and, except as described
in the Disclosure Statement and the exhibits thereto, all financial statements
contained in any periodic or other report of WRT, or filed with the Commission
after the date of the WRT 10-K and prior to the Effective Date, (i) did and
will fairly present, as of the relevant dates and/or for the relevant periods
set forth therein, the consolidated financial position, results of operations,
changes in stockholders' equity (deficit) (in the case of annual financial
statements) and changes in the consolidated financial position of WRT and
Subsidiaries, subject in the case of statements for interim periods to normal
year-end adjustments; (ii) were and will be prepared in accordance with GAAP
applied on a basis consistent with prior periods, except as indicated in the
notes thereto, and subject, in the case of audited financial statements, to
the qualifications stated in the report thereon of KPMG Peat Marwick LLP; and
(iii) contained and will contain notes, if required, which were and will be
true, accurate and complete in all material respects.
Section 3.09. Disclosure Statement. On January 21, 1997, WRT and
DLBW filed with the Bankruptcy Court an amended disclosure statement pursuant
to Section 1125 of the Bankruptcy Code. Such amended disclosure statement, in
the form approved by the Bankruptcy Court for use by WRT and DLBW in the
solicitation of acceptances or rejections of the Plan, is herein called the
"Disclosure Statement." The Disclosure Statement, as of the Mailing Date (as
hereinafter defined), will contain "adequate information" (as defined in
Section 1125(a)(1) of the Bankruptcy Code) with respect to the Plan, and will
describe accurately in all material respects the provisions of the Plan and
this Commitment Agreement.
Section 3.10. Indebtedness, Liabilities and Obligations. Except
as set forth on Schedule 3.10 hereto and except for such as will be fully
discharged and extinguished upon confirmation of the Plan without any
distribution in respect thereof by WRT, any Subsidiary of WRT or New WRT,
neither WRT nor any subsidiary of WRT has any indebtedness, liabilities
(actual, contingent or other), obligations or commitments, contingent or
<PAGE> 9
otherwise, or any of the foregoing (material or otherwise) which are otherwise
required to be disclosed in the Historical WRT Financial Statements or in a
disclosure statement prepared in accordance with the Bankruptcy Code, which
are not either (i) fairly and adequately reflected in the Historical WRT
Financial Statements or described in the notes thereto, or (ii) described in
the Disclosure Statement. Any indebtedness, liabilities, obligations or
commitments which are not required to be so disclosed are not in the aggregate
material to the business, operations or financial condition of WRT or any
Subsidiary of WRT, taken as a whole.
Section 3.11. Taxes. Complete and correct copies of the federal
income tax returns, and all amendments thereto, for the years ended December
31, 1993, 1994 and 1995, heretofore filed by WRT with the Internal Revenue
Service for the taxable years then ended, have been delivered to DLB and
Wexford. For purposes of this Commitment Agreement, the term "tax" shall
include all federal, state, local and foreign taxes, assessments, levies,
imposts, duties, license fees, registration fees, withholding or other
governmental charges and any interest or penalty on, and any addition to, any
of the foregoing and any right to a credit or deduction against, or a
reduction of, any of the foregoing, and "tax return" means any return, report,
statement or other document relating to any tax. Except as set forth on
Schedule 3.11 hereto, (i) WRT and each Subsidiary have filed all tax returns
required to be filed, all such tax returns are correct and complete and all
taxes shown to be due on such tax returns have been paid, (ii) there are no
material unpaid taxes which have given rise to a lien on the properties and
assets of WRT, except liens for taxes not yet due and payable, (iii) all
material taxes not yet due and payable which require accrual in accordance
with applicable financial accounting practices have been properly accrued on
the books of account of WRT and, if applicable with respect to periods ended
on or prior to December 31, 1995, reflected in the Historical WRT Financial
Statements, (iv) the charges, accruals and reserves shown in the Historical
WRT Financial Statements, if any, in respect of taxes for all fiscal periods
covered thereby are adequate in all material respects with respect to such
periods, and there are not pending or known to WRT proposed assessments by any
taxing authority for additional taxes for which WRT does not have adequate
book reserves for any such fiscal period , (v) since the date of the
Historical WRT Financial Statements, neither WRT nor any Subsidiary has
incurred any liability for taxes other than in the ordinary course of
business, (vi) no audits or administrative or judicial proceedings are pending
or threatened with respect to WRT or any Subsidiary, (vii) neither WRT nor any
Subsidiary is liable for taxes of another Person under Treasury Regulation
1.1502-6, as transferee or successor, by contract or otherwise, (viii) there
are no unexpired waivers of applicable statutes of limitation, or extensions
thereof, with respect to any taxes, (ix) all monies required to be withheld by
WRT from employees for income taxes, social security, unemployment insurance
taxes, or similar taxes or assessments have been collected or withheld and
either paid to the respective governmental agencies or set aside in accounts
for such purpose.
Section 3.12. Properties. Except as otherwise provided in
Section 3.21 hereto:
<PAGE> 10
(a) There is set forth in the Schedules a correct and
complete list of all material items of real property, including leased
property, and any material buildings, structures and improvements thereon or
therein, which are owned or used by WRT or any of its Subsidiaries. With
respect to any material real property of WRT or any of its Subsidiaries,
including any leased property, and any material buildings, structures and
improvements located thereon or therein, such buildings, fixtures and
improvements, and the present use thereof, comply in all material respects
with all zoning laws, ordinances and regulations of the governmental or other
authorities having jurisdiction thereof, including provisions relating to
permissible nonconforming uses, if any, and such premises are not affected,
nor to the best of WRT's knowledge threatened, by any condemnation or eminent
domain proceeding. All material leases of real or personal property by WRT or
any of its Subsidiaries, are, except as a result solely of the pendency of the
Chapter 11 Case, valid and subsisting leases and, except as contemplated by
this Commitment Agreement or the Plan, or terminated in the ordinary course of
business or in accordance with their terms, from and after the Effective Date
and the consummation of the transactions contemplated hereby, will continue to
entitle New WRT to the use and possession of the real or personal property
purported to be covered thereby for the terms specified in such leases and for
the purposes for which such real or personal property is now used.
(b) WRT has good title to all property and assets (whether
real or personal, tangible or intangible) reflected in the WRT Historical
Financial Statements or acquired after the date thereof. None of such
property or assets is subject to any lien, mortgage, claim, interest, charge,
security interest or other encumbrance or adverse interest of any nature
whatsoever ("Liens"), except:
(i) Liens disclosed in the WRT Historical Financial
Statements;
(ii) Permitted Liens; or
(iii) Liens which do not materially detract from the
value or materially interfere with any present or intended use of such
property or assets.
(c) There are no developments affecting any such property
or assets (whether real or personal) pending or, to the knowledge of WRT,
threatened which might materially detract from the value of such property or
assets or materially interfere with any present or intended use of any such
property or assets.
Section 3.13. Contracts and Agreements. Except as set forth on
Schedule 3.13 hereto, the Schedules set forth a correct and complete list of
all contracts, agreements, leases and instruments to which WRT or any of its
Subsidiaries is a party or by which it is or its properties or assets are
bound (i) that provide for potential payment or receipt (or the provision of
services or products having a value) to or from WRT or any of its Subsidiaries
<PAGE> 11
in excess of $50,000 or are otherwise material to the financial condition,
operations, business, assets and liabilities of WRT, (ii) that pertain to
employment or severance benefits for any officer or director of WRT or any of
its Subsidiaries or for any employee of WRT or any of its Subsidiaries to whom
such contracts, agreements or instruments provide employment benefits of more
than $100,000 per year, including in the form of stock distributions or
distributions-in-kind, or severance benefits of more than $50,000, including
in the form of stock distributions and distributions-in-kind, other than
employees covered by collective bargaining contracts with trade unions, a list
of whom has heretofore been provided to DLB and Wexford, (iii) that cover or
relate to the lease or charter of vessels, or (iv) that will be assumed by WRT
pursuant to the Plan. Neither WRT, nor any of its Subsidiaries nor, to WRT's
knowledge but without investigation, any other party to any such contract,
commitment, undertaking, agreement or instrument to which WRT or any of such
Subsidiaries is a party is in material default thereunder except as a result
of the pendency of the Chapter 11 Case or as disclosed in the Disclosure
Statement, and except as so disclosed or as may result solely from the
pendency of the Chapter 11 Case, each such contract, commitment, undertaking,
agreement and instrument is in full force and effect and is valid and legally
binding. WRT is not in violation of, or in default with respect to, any term
of its certificate of incorporation or by-laws.
Section 3.14. Insurance. WRT maintains policies of fire,
liability, business interruption and other forms of insurance covering its
properties, businesses, officers and directors against such losses and risks
as are generally insured against by companies in the same or similar
businesses in such amounts as are adequate to prevent WRT from being a co-
insurer within the terms of such policies, except to the extent such status as
a co-insurer may result solely from the provision in the policies of
deductibles not in excess of those customarily contained in policies of
companies in the same or similar businesses or solely from claims in excess of
policy limits. Set forth on Schedule 3.14 hereto is a correct and complete
list of all such insurance policies currently maintained by WRT. Each such
policy is in full force and effect and will remain in full force and effect
following consummation of the Plan. No such policy has premiums in arrears
and no notice of cancellation or termination has been received with respect to
any such policy.
Section 3.15. Litigation. Except as set forth on the Schedules,
there is no suit, action, proceeding or governmental investigation pending or,
to the best of the knowledge of WRT, threatened against WRT or any of its
Subsidiaries (other than any suit, action or proceeding in which WRT or any of
such Subsidiaries is the plaintiff and in which no counterclaim or cross-claim
against WRT or any of such Subsidiaries has been filed) nor has WRT or any of
such Subsidiaries or any of their respective officers or directors been
subject to any suit, action, proceeding or governmental investigation as a
result of which any such officer or director is or may be entitled to
indemnification by WRT or any of such Subsidiaries, except for suits, actions
or proceedings (other than suits, actions or proceedings commenced by any
government or governmental authority) which if resolved adversely to WRT or
<PAGE> 12
any of such Subsidiaries would not in the aggregate have a Material Adverse
Effect or which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated hereby. Except as so
disclosed, there is not outstanding against WRT or any of such Subsidiaries
any judgment, decree, injunction, rule or order of any court, government,
department, commission, agency, instrumentality or arbitrator, nor is WRT or
any of such Subsidiaries in violation of any applicable law, regulation,
ordinance, order, injunction, decree or requirement of any governmental body
or court which violation would have a Material Adverse Effect.
Section 3.16. Employee Benefits. WRT has delivered to DLB and
Wexford a true and complete copy of its employee benefit plans and programs
(including, without limitation, any of the foregoing covering retirees)
maintained by WRT or its Subsidiaries (the "Benefit Plans"). Neither WRT, its
Subsidiaries nor any entity treated as a single employer with WRT or its
Subsidiaries under Sections 414(b), (c), (m) or (o) of the Internal Revenue
Code of 1986, as amended (the "Code"), sponsors, maintains or contributes to
any Benefit Plan that is subject to Title IV of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), including any "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA or, within the preceding
five (5) years, sponsored, maintained or contributed to any such Benefit Plan.
None of the Benefit Plans, and neither WRT nor its Subsidiaries, have any
liability with respect to medical or life insurance coverage for retirees or
other terminated employees, other than as required under Section 4980B of the
Code. Each Benefit Plan has been administered and maintained in compliance
with all applicable laws, including, without limitation, ERISA and the Code,
and in accordance with its terms. No nonexempt "prohibited transaction" (as
defined in Section 406 of ERISA and Section 4975 of the Code) has occurred
with respect to any Benefit Plan. WRT and its Subsidiaries have complied with
all reporting, disclosure and other obligations as may be imposed under all
applicable laws by reason of the operation of any Benefit Plan. The terms of
each Benefit Plan permit the sponsor to amend, modify or terminate each such
Benefit Plan and no representations, written or oral, would limit the ability
of WRT or its Subsidiaries to amend, modify or terminate any Benefit Plan.
With respect to each Benefit Plan intended to qualify under Section 401(a) of
the Code, the Internal Revenue Service has issued a favorable determination
letter that such Benefit Plan is qualified under Section 401(a) of the Code
and such Benefit Plan is exempt from federal taxation under Section 501(a) of
the Code; a copy of the most recent of all such determination letters has been
made available to DLB and Wexford and nothing has occurred since the date of
such letter that could reasonably be expected to cause any such Benefit Plan
to lose such qualification or exemption.
Section 3.17. Absence of Certain Changes. Since the date of the
WRT Historical Financial Statements and except as disclosed in the WRT 10-K or
the Disclosure Statement, the business of WRT has been conducted in the
ordinary course consistent with past practices and there has not been:
(i) any event, occurrence, development or state of
circumstances or facts which has had or could reasonably be expected to have a
Material Adverse Effect;
<PAGE> 13
(ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital stock of
WRT, or any repurchase, redemption or other acquisition by WRT or any
Subsidiary of any outstanding shares of capital stock or other securities of,
or other ownership interests in, WRT or any Subsidiary;
(iii) any amendment of any material term of any
outstanding security of WRT or any Subsidiary;
(iv) any incurrence, assumption or guarantee by WRT or
any Subsidiary of any indebtedness for borrowed money;
(v) any creation or assumption by WRT or any
Subsidiary of any Lien on any material asset other than in the ordinary course
of business consistent with past practices;
(vi) any making of any loan, advance or capital
contributions to or investment in any Person;
(vii) any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting the business or assets of WRT
or any Subsidiary which, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect;
(viii) any transaction or commitment made, or any
contract or agreement entered into, by WRT or any Subsidiary relating to its
assets or business (including the acquisition or disposition of any assets) or
any relinquishment by WRT or any Subsidiary of any contract or other right, in
either case, material to WRT and its Subsidiaries, taken as a whole, other
than transactions and commitments in the ordinary course of business
consistent with past practices and those contemplated by this Commitment
Agreement;
(ix) any (A) employment, deferred compensation,
severance, retirement or other similar agreement entered into with any
director, officer or employee of WRT or any Subsidiary (or any amendment to
any such existing agreement), (B) grant of any severance or termination pay to
any director, officer or employee of WRT or any Subsidiary, or (C) change in
compensation or other benefits payable to any director, officer or employee of
WRT or any Subsidiary pursuant to any severance or retirement plans or
policies thereof;
(x) any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or representative
thereof to organize any employees of WRT or any Subsidiary, which employee was
not previously subject to a collective bargaining agreement, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with respect to
any employees of WRT or any Subsidiary; or
(xi) any agreement to do any of the forgoing.
<PAGE> 14
Section 3.18. Environmental Matters. (a) WRT and its Subsidiaries
have obtained all permits, licenses and other authorizations, and have made
all registrations and given all notifications, that are required with respect
to the operation of their respective businesses under all applicable
Environmental Laws other than those permits, licenses, other authorizations,
registrations and notifications the failure of which to obtain or make,
individually or in the aggregate, would not have a Material Adverse Effect.
(b) WRT and its Subsidiaries are in compliance in all
material respects with all terms and conditions of the required permits,
licenses and other authorizations referred to in paragraph (a) above, and are
also in compliance in all material respects with any other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws or contained in
any regulation, code, plan, order, decree, judgment, injunction, settlement
agreement, notice or demand letter issued, entered, promulgated or approved
thereunder, other than where the failure to be in such compliance,
individually or in the aggregate, would not have a Material Adverse Effect.
(c) There is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter (collectively "Actions") pending or, to the knowledge
of WRT, threatened against WRT or any of its Subsidiaries (including without
limitations, any claims made against or with respect to the Buyer's Leasehold
and Facilities) relating in any way to Environmental Laws or any regulation,
code, plan, order, decree, judgment, injunction, notice or demand letter
issued, entered, promulgated or approved thereunder other than Actions that,
if determined adversely to WRT or such Subsidiaries, would not reasonably be
expected to have a Material Adverse Effect.
Section 3.19. Intellectual Property. (a) Set forth on Schedule
3.19 hereto is a correct and complete list of all patent rights or licenses or
other rights to use patent rights, inventions, trademarks, service marks,
trade names and copyrights owned by WRT or its Subsidiaries. WRT and its
Subsidiaries own or possess adequate patent rights or licenses or other rights
to use patent rights, inventions, trademarks, service marks, trade names and
copyrights used or necessary to conduct the general business now operated by
them and neither WRT nor any of its Subsidiaries has received any notice of
infringement or conflict with asserted rights of others with respect to any
patent, patent rights, inventions, trademarks, service marks, trade names or
copyrights which, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.
(b) None of the processes and formulae, research and
development results and other know-how of WRT or any Subsidiary, the value of
which to WRT or such Subsidiary is contingent upon maintenance of the
confidentiality thereof, has been disclosed by WRT or any Subsidiary to any
Person other than employees, representatives and agents of WRT or any
Subsidiary all of whom are bound by written confidentiality agreements.
<PAGE> 15
Section 3.20 Licenses and Permits. Schedule 3.20 correctly
describes each license, franchise, permit or other similar authorization
affecting, or relating in any way to, the assets or business of WRT and its
Subsidiaries (the "Permits") together with the name of the government agency
or entity issuing such Permit. Such Permits are valid and in full force and
effect and none of the Permits will be terminated or impaired or become
terminable, in whole or in part, as a result of the transactions contemplated
hereby.
Section 3.21 Labor Matters. Neither WRT nor any of its
Subsidiaries are, or, within the preceding three (3) years, have been, parties
to any collective bargaining agreements covering employees or former
employees. WRT and its Subsidiaries are in compliance with all applicable
labor and employment laws, except where the failure so to comply could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. To the best of the knowledge of WRT, no employee or former
employee has a reasonable basis for any action against WRT or its Subsidiaries
arising out of any statute, ordinance or regulation relating to discrimination
in employment practices.
Section 3.22 Oil and Gas Representations. (a) Royalties and
Rentals; Full Force and Effect. The oil, gas and mineral lease forming a
portion of the Buyer's Leasehold and Facilities is in full force and effect.
WRT has paid, or has caused to be paid, timely all royalties, rentals or other
payments due under the Buyer's Leasehold and Facilities except for those
payments which are subject to a bona fide dispute and which will not result in
grounds for cancellation of any portion of the Buyer's Leasehold and
Facilities and has taken or has caused to be taken all necessary action
required to preserve the Buyer's Leasehold and Facilities in full force and
effect. WRT has not received any demand (which has not been satisfied) from,
nor is it a party to any dispute concerning the Buyer's Leasehold and
Facilities, and, to WRT's knowledge, no other person owning an interest in the
Buyer's Leasehold and Facilities has received any such demand or is a party to
any such dispute. Additionally, there has not occurred any event, fact or
circumstance which with the lapse of time or the giving of notice, or both,
would constitute a breach or default on behalf of WRT or, to the knowledge of
WRT, on behalf of any other party, under the oil, gas and mineral lease
forming a part of the Buyer's Leasehold and Facilities.
(b) Prepayment Arrangements. WRT is not obligated by
virtue of any prepayment arrangement under any contract for the sale of
hydrocarbons containing a take-or-pay or similar provision, or a production
payment or of any other prepayment arrangement, to deliver hydrocarbons whose
production is or may be attributable to the Buyer's Leasehold and Facilities
at some future time without then or thereafter having the right to receive and
retain full payment therefor.
(c) Call on Production. No party has any call upon,
option to purchase or other preferential purchase right with respect to
hydrocarbon production from or attributable to the Buyer's Leasehold and
Facilities.
<PAGE> 16
(d) Oil and Gas Taxes. All ad valorem, property,
production, excise, severance, windfall profits and other similar taxes and
assessments based on or measured by the ownership of the Buyer's Leasehold and
Facilities or the production of hydrocarbons or the receipt of proceeds
therefrom for all years prior to the year 1997, which are not foreclosed by
reason of the expiration of any applicable statutes of limitation or the
receipt of any closing letters from relevant taxing authorities, have been
properly paid, and all such taxes and assessments which become due and payable
prior to Closing shall be properly paid by WRT.
(e) Liens; Claims; Litigation. There are no liens, claims
or demands or suits, actions or other proceedings pending or, to the knowledge
of WRT, threatened before any court or governmental body or agency or arbitral
body which could result in impairment or loss of WRT's title to any part of
the Buyer's Leasehold and Facilities or the value thereof or which might
hinder or impede the operation of the Buyer's Leasehold and Facilities.
(f) Condition of Personal Property. Except as disclosed
to DLB, all of the equipment, facilities, fixtures, appurtenances and other
personal property which form a part of the Buyers Leasehold and Facilities
have been maintained in a state of repair that is adequate for normal
operations, and are in good working order.
(g) Accuracy of Data. All of the written data, including
production records, computer printouts and other such data, whether similar or
dissimilar, at the time furnished by WRT to DLB, in conjunction with DLB's
evaluation of the Buyer's Leasehold and Facilities, was complete to the best
of WRT's knowledge, and the information reported therein was not materially
false, and it did not omit any material fact necessary to make the reported
information not misleading. WRT has no knowledge of any matter which
materially and adversely affects (or may materially and adversely affect) the
operations, prospects or condition of any portion of the Buyer's Leasehold and
Facilities, which has not been set forth in this Agreement or in the Schedules
thereto.
(h) Title. Seller owns Defensible Title (as hereinafter
defined) to no less than the net revenue interest and no more than the working
interest in the oil, gas and mineral lease forming a part of the Buyer's
Leasehold and Facilities as is set forth in Schedule 3.22. The term
"Defensible Title" as used herein shall mean, as to the Buyer's Leasehold and
Facilities, such title that (1) entitles WRT to receive a percentage of all
oil, gas and other hydrocarbon minerals which are produced, saved and marketed
from or attributable to the Buyer's Leasehold and Facilities not less than the
interest shown as the net revenue interest of WRT on Schedule 3.22 hereto,
without reduction, suspension or termination for the productive life of
Buyer's Leasehold and Facilities; (2) obligates WRT to bear a percentage of
the costs and expenses relating to operations on the maintenance and
development of the Buyer's Leasehold and Facilities not greater than the
<PAGE> 17
interest shown as the working interest of WRT on Schedule 3.22 hereto, without
increase for the productive life of the Buyer's Leasehold and Facilities
(unless the net revenue interest increases at least proportionately); and (3)
is free and clear of all production payments, debts, liens, mortgages,
security interests, contract obligations, restrictions on transferability,
preferential purchase rights, claims, defects and encumbrances except for the
Permitted Encumbrances (as hereinafter defined). The term "Permitted
Encumbrances" as used herein shall mean:
(1) liens securing amounts not yet owing for taxes;
(2) mechanic's, materialmen's, repairmen's or similar
liens or charges which relate to obligations not yet delinquent or the
validity of which is being contested in good faith;
(3) liens of a form and scope customary in the oil and
gas industry under operating agreements and other similar instruments and
agreements;
(4) such defects or irregularities, if any, in the
title to the Buyer's Leasehold and Facilities that individually or in the
aggregate do not impair the Buyer's Leasehold and Facilities or the value
thereof, affect the obligation of WRT under this Agreement or materially
adversely affect the use of the Buyer's Leasehold and Facilities; and
(5) royalties, overriding royalties, production
payments and other burdens on production from or attributable to the Buyer's
Leasehold and Facilities that are usual and customary in the oil and gas
industry and that have been taken into account in the net revenue interests
set forth in Schedule 3.22.
(j) Licenses and Permits; Filings. All authorizations,
licenses and permits required under federal, state and local laws have been
obtained, and all filings necessary to obtain such authorizations, licenses
and permits have been made, to own and operate the Buyer's Leasehold and
Facilities as presently being owned and operated. Such authorizations,
licenses, permits and filings are in full force and effect, and no material
violations exist with respect to any of the same, and WRT has not received
notice of any violation of or investigation relating thereto.
(k) AFE's and Other Extant Obligations. There are no
outstanding authorities for expenditure or other contracts or agreements,
except that certain Global Settlement by and among the State of Louisiana,
Texaco, Inc. and the Louisiana Land and Exploration Company, dated February
22, 1994, that;
(l) require the drilling of wells or other material
development operations in order to earn or to continue to hold all or any
portion of the Buyer's Leasehold and Facilities; or
(2) obligate WRT to make payments of any material
amounts in connection with drilling of wells or other material capital
expenditures affecting the Buyer's Leasehold and Facilities.
<PAGE> 18
(l) Wells, Plugging and Abandonment. There are no wells
located on the Buyer's Leasehold and Facilities, or bottom-holed under the
Buyer's Leasehold and Facilities, which are currently producing, or capable of
producing, hydrocarbons. All wells located on, or bottom-holed under, the
Buyer's Leasehold and Facilities have been plugged and abandoned in accordance
with all applicable laws, ordinances, rules, regulations and permits of any
governmental body or agency having jurisdiction thereover; and there are no
wells located on, or bottom-holed under, the Buyer's Leasehold and Facilities
that WRT, the subject operator or any other party owning an interest in the
Buyer's Leasehold and Facilities is obligated by order or other action of any
governmental body or agency to plug and abandon within a time certain.
(m) Existing Documents. For purposes of this Agreement,
the term "Existing Documents" shall mean all the oil, gas and other mineral
leases, assignments or other instruments or agreements that comprise the
Buyer's Leasehold and Facilities and all contractually binding arrangements to
which the Buyer's Leasehold and Facilities may be subject and which will be
binding on the Buyer's Leasehold and Facilities or DLB after closing
(including, without limitation, oil, gas and farm-in agreements, option
agreements, forced pooling orders, assignments of production payments, unit
agreements, joint operating agreements, balancing agreements, unit operating
agreements, production contracts, processing contracts, gas sales contracts,
marketing and transportation contracts and division orders). With respect to
the Buyer's Leasehold and Facilities and insofar as the following could
materially prevent DLB from receiving the proceeds of production attributable
to, or otherwise receiving the economic benefits deriving from, the Buyer's
Leasehold and Facilities or result in he cancellation of DLBW's interest
therein, (i) all Existing Documents are in full force and effect and are the
valid and legally binding obligations of the parties thereto and are
enforceable in accordance with their respective terms, except as may result
from the pendency of the Chapter 11 Case or as disclosed in the Disclosure
Statement; (ii) WRT is not in material breach or default with respect to any
of its obligations pursuant to any such Existing Documents or any regulations
incorporated therein or governing same, except as a result of the pendency of
the Chapter 11 Case or as disclosed in the Disclosure Statement; and (iii) all
payments (including, without limitation, royalties, delay rentals, shut-in
royalties and valid calls under unit or operating agreements) and obligations
due thereunder have been made and satisfied by or on behalf of WRT.
Section 3.23. Full Disclosure. WRT has disclosed to DLB and
Wexford all material facts concerning WRT's and its Subsidiaries assets,
business, operations, financial condition and prospects. No representation or
warranty by WRT in this Commitment Agreement and no statement made by WRT
contained in the Plan, the Disclosure Statement (other than statements made by
DLBW therein) or any document delivered or to be delivered by or on behalf of
WRT to DLB and Wexford in accordance with this Commitment Agreement contained
or will contain any untrue statement of material fact or omitted or will omit
to state a material fact necessary to make the statements contained in this
Commitment Agreement or in any such document, in light of the circumstances
under which they were made, not misleading.
<PAGE> 19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DLB AND WEXFORD
Section 4.01. Representations and Warranties of DLB. DLB hereby
represents and warrants to, and covenants and agrees with, WRT and Wexford
that (i) this Commitment Agreement has been duly authorized by DLB and has
been duly executed and delivered on its behalf and constitutes the valid and
binding obligation of DLB, enforceable against DLB in accordance with its
terms, subject, as to enforceability, to bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors' rights generally and to
general principles of equity, whether considered in a proceeding at law or in
equity, (ii) it has and will have full power and authority to contribute at
the closing the funds required pursuant to Article II hereof to the capital of
New WRT, (iii) the execution and delivery by DLB of this Commitment Agreement,
and the consummation by DLB of the transactions contemplated hereby, will not,
to the best of DLB's knowledge, conflict with, violate, or result in any
breach of, any of the terms, conditions or provisions of, or constitute a
default under, or result in the creation of a lien on, or the acceleration of
any obligation or the loss of a benefit under, (I) DLB's certificate of
incorporation or by-laws, (II) any note, indenture, deed of trust, material
lease, or other material instrument, contract or agreement to which DLB may
then be a party or by which it or its respective properties and assets may
then be bound, or (III) any law, ordinance, rule or regulation of any
government or governmental authority or judgment, order or decree of any court
or governmental authority, (iv) subject to such filings as may be required
under the Exchange Act, the HSR Act and the entry of the Confirmation Order,
all consents, approvals, orders and authorizations of, and all registrations,
declarations and filings with, any federal or state government or governmental
authority required to be made or obtained by DLB for the consummation by it of
the transactions contemplated hereby have been made or obtained or will be
made or obtained prior to the Effective Date and (v) the information provided
by DLB in writing expressly for inclusion in the Disclosure Statement does
not, and will not, contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Section 4.02 Representations and Warranties of Wexford. Wexford
hereby represents and warrants to, and covenants and agrees with, WRT and DLB
that (i) this Commitment Agreement has been duly authorized by Wexford in its
capacity as investment manager for the Wexford Funds and, if necessary, by
each of the Wexford Funds, has been duly executed and delivered on its behalf
and constitutes the valid and binding obligation of the Wexford Funds,
enforceable against the Wexford Funds in accordance with its terms, subject,
as to enforceability, to bankruptcy, insolvency, moratorium, reorganization
and similar laws affecting creditors' rights generally and to general
principles of equity, whether considered in a proceeding at law or in equity,
(ii) the Wexford Funds have and will have full power and authority to
contribute at the Closing the funds required pursuant to Article II hereof to
the capital of new WRT, (iii) the execution and delivery by Wexford and the
<PAGE> 20
Wexford Funds of this Commitment Agreement, and the consummation by the
Wexford Funds of the transactions contemplated hereby, will not, to the best
of Wexford's knowledge, conflict with, violate, or result in any breach of,
any of the terms, conditions or provisions of, or constitute a default under,
or result in the creation of a lien on, or the acceleration of any obligation
or the loss of a benefit under, (I) Wexford's operating agreement or the
partnership agreements of the Wexford Funds, (II) any note, indenture, deed of
trust, material lease, or other material instrument, contract or agreement to
which Wexford or the Wexford Funds may then be a party or by which they or
their respective properties and assets may then be bound, or (III) any law,
ordinance, rule or regulation of any government or governmental authority or
judgment, order or decree of any court or governmental authority, (iv) subject
to such filings as may be required under the Exchange Act, the HSR Act and the
entry of the Confirmation Order, all consents, approvals, orders and
authorizations of, and all registrations, declarations and filings with, any
federal or state government or governmental authority required to be made or
obtained by Wexford for the consummation by it of the transactions
contemplated hereby have been made or obtained or will be made or obtained
prior to the Effective Date and (v) the information provided by Wexford in
writing expressly for inclusion in the Disclosure Statement does not, and will
not, contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 4.03. Financing. DLB and the Wexford Funds have, or will
have prior to the Closing, sufficient cash, available lines of credit or other
sources of immediately available funds to enable it to make payment of the
funds required pursuant to Article II hereof and any other amounts to be paid
by it hereunder.
Section 4.04. Purchase for Investment. DLB and the Wexford Funds
are purchasing the New WRT Common Stock and the New WRT Subscription Common
Stock for investment for their own respective accounts and not with a view to,
or for sale in connection with, any distribution thereof in violation of the
Securities Act of 1933, as amended. DLB, Wexford and the Wexford Funds(either
alone or together with their advisors) have sufficient knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of its investments in the New WRT Common Stock and the
New WRT Subscription Common Stock and are capable of bearing the economic
risks of such investment.
Section 4.05. Litigation. There is no action, suit, investigation
or proceeding pending against, or to the knowledge of DLB, Wexford or the
Wexford Funds threatened against or affecting, DLB, Wexford or the Wexford
Funds before any court or arbitrator or any governmental body, agency or
official which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Commitment Agreement.
<PAGE> 21
ARTICLE V
COVENANTS OF WRT
WRT covenants and agrees with DLB and Wexford that, from and after
the date hereof and until the Effective Date, except as otherwise expressly
provided herein or in the Plan and subject to the terms and conditions hereof:
Section 5.01 Conduct of Business. (a) WRT shall carry on its
business diligently and consistent with good business practice, maintain its
properties in customary repair, order and condition, ordinary wear and tear
excepted, and use all reasonable commercial efforts to maintain and preserve
its business organization.
(b) WRT will not (i) take or agree or commit to take any
action that would make any representation and warranty of WRT hereunder
inaccurate in any material respect at, or as of any time prior to, the
Effective Date or (ii) omit or agree or commit to omit to take any action
necessary to prevent any such representation or warranty from being inaccurate
in any material respect at any such time.
Section 5.02 Actions in the Chapter 11 Case.
(a) Subject to its fiduciary obligations as debtor-in-
possession in the Chapter 11 Case, WRT shall use its best efforts, diligently
and in good faith, to cause the Plan to be confirmed by the Bankruptcy Court.
Without limiting the application of the foregoing sentence, so long as this
Commitment Agreement is in full force and effect, WRT will not propose or in
any way support any plan that fails to provide for the full payment in cash at
the Closing of the Texaco Claim. WRT shall not amend the Plan or permit the
Plan to be amended without the prior written consent of DLB and Wexford and,
upon the request of DLB and Wexford, shall promptly file with the Bankruptcy
Court all such amendments to the Plan and to the Disclosure Statement or any
exhibit to the Plan or Disclosure Statement as are necessary in order to give
effect to the provisions of this Commitment Agreement. Subject to the
confirmation of the Plan, WRT shall take all actions not inconsistent with the
terms of this Commitment Agreement that are necessary or appropriate in order
to effect the consummation of the Plan and the transactions contemplated by
this Commitment Agreement.
(b) Promptly after the execution and delivery hereof, WRT
shall make such filings (which shall be in form and substance satisfactory to
DLB and Wexford) with the Bankruptcy Court as are necessary in order to obtain
the approval of the Bankruptcy Court of the terms and provisions of this
Commitment Agreement on or before entry of an order approving the Disclosure
Statement, including, without limitation, the provisions of Sections 10.02 and
10.03 hereof. WRT shall use its best efforts, diligently and in good faith,
to obtain such approval as promptly as practicable and shall submit a motion
for such approval, substantially in the form of Exhibit B hereto, to the
Bankruptcy Court no later than the close of business on January 28, 1997.
<PAGE> 22
(c) WRT shall use its best efforts, diligently and in good
faith, to file with the Bankruptcy Court and to prosecute objections to all
Claims that WRT, DLB or Wexford believes in good faith are subject to
objection in whole or in part, including, without limitation, objections to
the amount of such Claims and to any lien, mortgage or other security interest
asserted with respect to such Claims, and shall not settle any such objection
except with the consent of DLB and Wexford, which consent shall not be
unreasonably withheld.
(d) WRT shall not take any actions or omit to take any
actions that are inconsistent with the provisions of this Commitment Agreement
or that interfere in any manner with the provisions of this Commitment
Agreement.
(e) WRT shall exercise all reasonable efforts, diligently
and in good faith, to have the New WRT Common Stock qualified, prior to the
Effective Date, for quotation on the NASDAQ system upon issuance thereof.
Section 5.03 Negative Covenants. WRT will not, except as
expressly or specifically contemplated by this Commitment Agreement or as
expressly and specifically permitted in the Plan, engage in any of the
following activities or transactions without the express written consent of
DLB and Wexford, which shall not be unreasonably withheld:
(a) propose or in any way support any plan of
reorganization for WRT other than the Plan;
(b) sell, lease, dispose of or transfer, or agree to sell,
lease, dispose of or transfer, any material leases or any other material
assets or rights, or cancel or agree to cancel any material liabilities owed
to WRT;
(c) issue, sell, deliver or agree to issue, sell or deliver
any shares of capital stock, bonds, debentures, notes or other corporate
securities of which WRT is the issuer or grantor, or grant or issue, or agree
to grant or issue, any options, warrants, bonuses or other similar rights
calling for the issuance of such securities;
(d) borrow, or agree to borrow, any funds or voluntarily
incur, or assume or become subject to, whether directly or by way of guarantee
or otherwise, any obligation or liability for borrowed money;
(e) except for (i) Permitted Liens and (ii) leases entered
into in the ordinary course of business and not otherwise prohibited hereby,
mortgage, pledge or otherwise encumber any part of its assets;
(f) enter, or agree to enter, into any agreement or
arrangement (i) granting any rights of first refusal or similar preferential
rights to purchase any assets of WRT, other than in the ordinary course of
business and with respect to non-material assets, or (ii) requiring the
consent of any Person to the consummation of any of the transactions
contemplated by this Commitment Agreement or the Plan;
<PAGE> 23
(g) breach, amend (other than in the ordinary course of
business consistent with past practices) or terminate (other than in
accordance with its terms) any material agreement, contract or instrument to
which WRT is a party;
(h) merge or consolidate with or into any other Person,
acquire control or acquire any capital shares or other securities of any other
Person, or take any steps incidental to or in furtherance of any such actions,
whether by entering into an agreement providing therefor or otherwise;
(i) enter into any material contract, arrangement or
agreement (other than contracts, agreements or arrangements entered into in
the ordinary course of business consistent with past practices);
(j) except as required by law or by GAAP, made any material
alteration in the manner of keeping its books, accounts or records or in the
accounting practices reflected therein;
(k) enter into any material transaction or acquire any
capital assets other than in the ordinary course of business consistent with
past practices;
(l) reject any executory contract or unexpired lease with
respect to which the damages resulting from such rejection would exceed
$50,000;
(m) amend its certificate of incorporation or by-laws or
change its authorized or outstanding capital stock;
(n) except in amounts that individually or in the aggregate
are not material, (i) grant to any director or officer or to any employee or
consultant any increase in compensation in any form, (ii) grant to any such
person any severance or termination pay or benefit, or (iii) make any loan or
advance to, or enter into, amend, modify, terminate or renew any compensation
benefit or employment agreement or arrangement with, any such person; or
(o) take any other action inconsistent with the terms of
this Commitment Agreement or the Plan or that could reasonably be expected to
impair the consummation of the transactions contemplated hereby or thereby.
Section 5.04 Delivery of Certain Documents.
(a) WRT shall promptly furnish to DLB and Wexford from the
date hereof until the Effective Date a copy of each such report, including
financial statements and schedules, hereafter filed by WRT pursuant to the
Exchange Act, and all material documents served upon or served by WRT in
connection with the Chapter 11 Case or any action or proceeding which may be
initiated with respect to any transaction contemplated by this Commitment
Agreement.
<PAGE> 24
(b) WRT shall give DLB and Wexford and their respective
accountants, counsel and other designated representatives access during normal
business hours throughout the period from the date hereof to the Effective
Date to all premises, books, records and other information of and concerning
WRT (including, without limitation, all work papers relating to tax and
accounting information used in connection with the preparation of financial
statements and tax returns), and shall cause its officers and managerial
employees to furnish to DLB and Wexford such financial and operating data and
other information with respect to its business and properties as either may
reasonably request. No investigation made by or information furnished to DLB
or Wexford pursuant to this Commitment Agreement shall be deemed to impact
DLB's and Wexford's ability to rely on any representations or warranties by
WRT or the conditions to the obligations of the parties to consummate the
transactions contemplated by this Commitment Agreement.
Section 5.05 Notification. WRT shall promptly notify DLB and
Wexford of (a) the occurrence of any change, event or condition that has had,
or could reasonably be expected to have, an effect on the Closing or a
Material Adverse Effect, (b) the commencement or threat of commencement of any
litigation that might reasonably be expected to have a Material Adverse Effect
or that relate to the consummation of the transactions contemplated by this
Commitment Agreement or the Plan, (c) any notice or other communication from
any Person alleging that the consent of such Person is or may be required in
connection with the consummation of the transactions contemplated by this
Commitment Agreement or the Plan, (d) any notice or other communication from
any governmental or regulatory agency or authority in connection with the
transactions contemplated by this Commitment Agreement or the Plan or (e) any
change in the senior management of WRT.
Section 5.06. Updating Disclosures. From time to time through
the Effective Date, WRT will promptly deliver to DLB and Wexford any
information concerning events subsequent to the date of this Commitment
Agreement or which becomes available to WRT after the date hereof which is
necessary to supplement the representations and warranties of WRT contained
herein, in order that such representations and warranties are kept current,
complete and accurate in all material respects. Such delivery shall, to the
extent of any new disclosure the substance of which has had or could be
reasonably expected to have a Material Adverse Effect, provide DLB and Wexford
the right to terminate this Commitment Agreement or pursue any other legal
remedy hereunder.
Section 5.07. Maintenance of Insurance. Through the Effective
Date, WRT will keep in force substantially the same kinds and amounts of
insurance which is carried as of the date hereof.
Section 5.08 Government Filings. WRT will (i) duly and timely
file (subject to authorized extensions) all reports or returns required to be
filed with federal authorities and all material reports and returns required
to be filed with state, foreign, local or other authorities, (ii) except as
contemplated by the Plan, unless contesting such in good faith and having
established adequate book reserves therefor, promptly pay, as and when due,
<PAGE> 25
all federal, state, local and foreign taxes, assessments and governmental
charges to the extent such taxes, assessments and charges constitute expenses
of administration under Section 503 of the Bankruptcy Code and (iii) duly
observe and conform to all lawful requirements of any governmental authority
relating to any of its properties or to the operation and conduct of its
business and to all covenants, terms and conditions upon, or under which, any
of its properties are held where the failure so to observe, conform or comply
would have a Material Adverse Effect.
Section 5.09 Management Reports. Subject to its fiduciary
duties as debtor-in-possession, WRT shall prepare, consistently with its
current practice, and deliver to DLB and Wexford copies of its monthly
operating statements, variance reports and other internal reports and
documents, simultaneously with the customary internal circulation thereof
within WRT.
Section 5.10 Board Meetings. WRT shall give DLB and Wexford at
least two days' prior notice of any board meeting or meeting of a committee of
the board and, subject to WRT's fiduciary duties as a debtor-in-possession,
DLB and Wexford each shall have the right to have a representative attend all
such meetings.
Section 5.11 Further Assurances. WRT shall (a) execute and
deliver such instruments and take such other actions as DLB and Wexford may
reasonably require in order to carry out the intent and purpose of this
Commitment Agreement and the Plan, (b) use its best efforts, diligently and in
good faith, to obtain any consents required herein to be obtained, (c) subject
to its fiduciary duties as debtor-in-possession, diligently support this
Commitment Agreement and the Plan in any proceeding before the Bankruptcy
Court or any other governmental or regulatory authority whose approval of the
transaction contemplated hereby and by the Plan is required, (d) subject to
its fiduciary duties as debtor-in-possession, use its best efforts, diligently
and in good faith, to oppose any litigation that seeks to restrain or prohibit
the consummation of the transactions contemplated hereby or by the Plan or
which would have a Material Adverse Effect and (e) use its best efforts,
diligently and in good faith, to cause the conditions precedent set forth in
Article IX hereof to be satisfied.
ARTICLE VI
COVENANTS OF DLB AND WEXFORD
Section 6.01 General Covenants. Each of DLB and Wexford,
jointly and severally, covenants and agrees, subject to the terms and
conditions hereof, that they will (a) execute and deliver such instruments and
take such other actions as WRT may reasonably require in order to carry out
the intent and purpose of this Commitment Agreement and the Plan, (b) use
their best efforts, diligently and in good faith, to obtain any consents
required herein to be obtained by them, (c) diligently support this Commitment
Agreement and the Plan in any proceeding before the Bankruptcy Court or any
<PAGE> 26
other governmental or regulatory authority whose approval of the transaction
contemplated hereby and by the Plan is required, (d) vote the Claims held by
them in favor of the confirmation of the Plan, (e) use their best efforts,
diligently and in good faith, to oppose any litigation that seeks to restrain
or prohibit the consummation of the transactions contemplated hereby or by the
Plan and (f) use their best efforts, diligently and in good faith, to cause
the conditions precedent set forth in Article VIII hereof to be satisfied.
ARTICLE VII
COVENANTS OF WRT, DLB AND WEXFORD
WRT, DLB and Wexford agree that:
Section 7.01 Best Efforts. Subject to the terms and conditions
of this Commitment Agreement, WRT, DLB and Wexford will use their best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Commitment Agreement. WRT,
DLB and Wexford agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as
may be necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Commitment Agreement.
Section 7.02 Certain Filings. WRT, DLB and Wexford shall
cooperate with one another (i) in determining whether any action by or in
respect of, or filing with, any governmental body, agency, official or
authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions contemplated by this Commitment
Agreement and (ii) in taking such actions or making any such filings,
furnishing information required in connection therewith and seeking timely to
obtain any such actions, consents, approvals or waivers.
Section 7.03 Public Announcements. The parties agree to consult
with each other before making any press release or making any public statement
with respect to this Commitment Agreement or the transactions contemplated
hereby and, except as may be required by applicable law or any listing
agreement with any national securities exchange, will not issue any such press
release or make any such public statement prior to such consultation.
Section 7.04 Confidential Treatment. Each of DLB and Wexford,
severally and not jointly, on the one hand and WRT on the other hand agrees
that all non-public information provided or made available to it or any of its
affiliates by or on behalf of the other party hereunder or pursuant hereto
shall be kept confidential and shall not be used by it or such affiliates for
any purpose other than in connection with the transactions contemplated by
this Commitment Agreement; provided, however that the foregoing shall not
apply to any such information which becomes publicly available (i) other than
<PAGE> 27
through breach of this Section 7.04, (ii) from a third party not under a
confidentiality obligation to the parties hereto or (iii) because it is
included in the Disclosure Statement as required pursuant to Section 1125 of
the Bankruptcy Code.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF WRT
Section 8.01. Conditions Precedent to WRT's Obligations. The
obligations of WRT to consummate the transactions contemplated by this
Commitment Agreement, including, without limitation, to issue shares of New
WRT Common Stock and New WRT Subscription Common Stock as provided herein and
in the Plan at the times herein and therein provided, shall be subject to the
satisfaction, or to the waiver by WRT, of each of the following conditions:
(a) The Bankruptcy Court shall have entered the
Confirmation Order.
(b) At the Effective Date, all required consents and
approvals of any governmental agency, authority, commission or other party
shall have been obtained and the same shall be in full force and effect, any
applicable waiting period (and any extension thereof) applicable to the
consummation of the Plan under the HSR Act shall have expired or been earlier
terminated and no preliminary or permanent injunction or other order, decree
or ruling barring consummation of the Plan shall have been entered with
respect to or in connection with any application under the HSR Act.
(c) The representations and warranties of DLB and Wexford
contained herein shall have been true and correct when made, and shall be true
and correct in all material respects on and as of the Effective Date, as if
made by DLB and Wexford, respectively, on and as of such date.
(h) At the Effective Date, each of DLB and Wexford shall
have complied or shall concurrently comply with each covenant and agreement
required herein to be complied with by it on or prior to the Effective Date.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF DLB AND WEXFORD
Section 9.01. Conditions to Respective Obligations of DLB and
Wexford. The joint and several obligations of DLB and Wexford to consummate
the transactions contemplated by this Commitment Agreement, including, without
limitation, to make or effect or cause to be made or effected, the payments
required pursuant to Article II hereof at the times therein provided, shall be
subject to the satisfaction, or to the waiver by each of DLB and Wexford
(except as expressly provided in this Section 9.01), of each of the following
conditions:
(a) Prior to the Effective Date, there shall have been
<PAGE> 28
approved pursuant to an order of the Bankruptcy Court (which order,
contemplated to be the Confirmation Order, shall have become a Final Order)
the issuance to DLB and Wexford of the shares of New WRT Common Stock and New
WRT Subscription Common Stock issuable to DLB and Wexford, the payment in full
of the Texaco Claim and all the other provisions of Article II hereof and at
the Effective Date, no action, suit or proceeding by or before any court,
governmental agency or other tribunal shall be pending or threatened against
WRT, DLB or Wexford, arising out of or with respect to the transactions
contemplated by this Commitment Agreement, the Plan or the Disclosure
Statement.
(b) The Bankruptcy Court shall have entered the
Confirmation Order, which order shall have become a Final Order, and such
Final Order shall contain, inter alia, provisions approving the amount of the
fees and expenses paid or payable to DLB and Wexford and shall be in form and
substance satisfactory to each of DLB and Wexford.
(c) Prior to the initial date of mailing of the Disclosure
Statement, as approved by the Bankruptcy Court to the creditors and
shareholders of WRT (the "Mailing Date"), the Bankruptcy Court shall have
entered an order (which order shall become a Final Order) approving certain
provisions of this Commitment Agreement, including, without limitation,
Sections 2.02(a) and (b), 10.02 and 10.03 and Articles V and VII.
(d) At the Effective Date, no action, suit or proceeding by
or before any court, governmental agency or other tribunal shall be pending or
threatened, other than those actions, suits and proceedings described in the
Schedules, against WRT the adverse determination of which would have a
Material Adverse Effect.
(e) From the date hereof through and including the
Effective Date, there shall have been no material adverse change in the
business, properties, financial condition, results of operations or prospects
of WRT or New WRT.
(f) All consents and approvals of any governmental agency,
authority, commission or other party shall have been obtained and the same
shall be in full force and effect on and as of the Effective Date, any waiting
period (and any extension thereof) applicable to the consummation of the Plan
under the HSR Act shall have expired or been earlier terminated and no
preliminary or permanent injunction or other order, decree or ruling barring
consummation of the Plan shall have been entered with respect to or in
connection with any application under the HSR Act.
(g) The representations and warranties of WRT contained
herein shall have been true and correct when made, and shall be true and
correct in all material respects on and as of the Effective Date, as if made
by New WRT on and as of such date, and DLB and Wexford shall have received a
certificate of an executive officer of New WRT to such effect.
<PAGE> 29
(h) At the Effective Date, each of WRT and New WRT shall
have complied or shall concurrently comply with each covenant and agreement
required herein to be complied with by it on or prior to the Effective Date,
and DLB and Wexford have received a certificate of an executive officer of New
WRT to such effect.
(i) At the Effective Date, the New WRT Certificate of
Incorporation shall have been duly adopted and filed with the Secretary of
State for the State of Delaware and the New WRT By-Laws shall have been duly
adopted and each shall contain provisions acceptable to DLB and Wexford.
(j) The Registration Rights Agreement, the New WRT
Subscription Rights Agreement and the Administrative Services Agreement shall
have been executed and delivered by the parties thereto and such agreements
shall contain substantially the terms described in the Disclosure Statement,
and all Exhibits and Schedules to the Plan and Disclosure Statement shall be
in form and substance reasonably satisfactory to each of DLB and Wexford.
(k) The Louisiana State Mineral Board shall have executed a
consent to the transfer of the WCBB Assets to DLB (or its designee) pursuant
to the terms of the Purchase, Sale and Exchange Agreement.
(l) There shall not have occurred (i) any material adverse
change in the condition of the financial markets generally, in the United
States, or in the worldwide market for geophysical services, or any outbreak
of hostilities if such hostilities materially adversely affect the oil markets
or the market for geophysical services or involve the United States, or other
national or international calamity or crisis the effect of which shall be such
as to make it, in the reasonable judgment of DLB and Wexford, impracticable to
consummate the transactions contemplated hereby to be consummated at the
Effective Date, or (ii) any suspension in trading in any securities of WRT or
New WRT by the Commission or any national or regional securities exchange, or
the establishment of minimum or maximum prices for trading, or maximum ranges
for prices for securities, by said exchange or by order of the Commission or
any other government authority, or any declaration of a banking moratorium by
Federal, New York or Texas authorities.
(m) DLB and Wexford shall have received an opinion, dated
the Effective Date, of Sheinfeld, Maley & Kay, P.C., counsel to WRT, in form
and substance satisfactory to DLB and Wexford.
Section 9.02. Waivers. On the date (which shall not be prior to 15
days after entry of an order confirming the Plan) on which WRT notifies DLB
and Wexford that the remaining conditions to the obligations of DLB and
Wexford set forth in Section 9.01 hereof have been satisfied or waived and WRT
delivers all such instruments, certificates and opinions in appropriate form
as required under this Commitment Agreement, DLB and Wexford shall determine
whether the conditions set forth in Sections 9.01(d), 9.01(g) and 9.01(k) have
been satisfied, or if such conditions have not been satisfied shall determine
whether or not to waive the same, and shall notify New WRT of the results of
said determination and in the event that all of such conditions are not
satisfied or waived, the Effective Date shall not occur and the parties hereto
shall have such right and obligations as are expressly set forth herein.
<PAGE> 30
ARTICLE X
MISCELLANEOUS
Section 10.01. Compliance with Plan. Without limiting the
obligations of WRT under this Commitment Agreement, WRT hereby covenants and
agrees with DLB and Wexford that it will comply in all respects with the
provisions of the Plan from and after the entry by the Bankruptcy Court of the
Confirmation Order with the same force and effect as if such provisions were
set forth in full herein.
Section 10.02. Break-Up Fee. If (a) WRT breaches in any material
respect any of its covenants or obligations under this Commitment Agreement or
the Plan, (b) WRT reaches an agreement in principle with respect to, accepts a
commitment for the purchase of, contracts to sell or sells WRT or a material
portion of its assets or operations, or, pursuant to a plan of reorganization
or otherwise, debt or equity securities of WRT, to any person other than an
Extant Bidder, DLB and Wexford or persons approved by DLB and Wexford, or WRT
terminates this Commitment Agreement for any reason other than as a result of
a material breach hereof by DLB and Wexford or (c) a plan of reorganization
for WRT other than the Plan or a plan proposed solely by an Extant Bidder is
confirmed (collectively, a "Break-Up Event"), then (x) DLB and Wexford shall
have the right to terminate this Commitment Agreement or pursue any other
legal remedy hereunder and (y) WRT shall immediately pay to DLB and Wexford,
in addition to the reimbursement of out-of-pocket expenses set forth in
Section 10.03 hereof, a fee (the "Break-Up Fee") in the amount of $700,000,
payable following written demand therefor by DLB and Wexford; provided,
however, that the Break-Up Fee shall not be payable if (x) any of the
conditions precedent contained in this Commitment Agreement or the Plan is not
met or (y) DLB and Wexford breaches any of their covenants or obligations
under this Commitment Agreement. The Break-Up Fee shall be an administrative
expense claim under Section 503(b)(1)(A) of the Bankruptcy Code payable at the
time all other such administrative expenses are paid (other than professional
fees and administrative expenses paid in the ordinary course). The Break-Up
Fee shall be payable to DLB and Wexford if, and only if, at the occurrence of
the Break-Up Event, DLB and Wexford shall have not theretofore exercised any
right or stated its intent to terminate or not perform its obligations under
this Commitment Agreement, except as a consequence of the failure of WRT to
perform its material covenants or obligations under this Commitment Agreement
or the Plan.
Section 10.03. Expense Reimbursement. The reasonable out-of-pocket
expenses (including, without limitation, the reasonable fees and expenses of
counsel and other advisors to DLB and Wexford) incurred in connection with the
preparation, negotiation and consummation of this Commitment Agreement, the
Plan and all related documents and transactions shall be for WRT's account and
shall be an allowed administrative expense claim under Section 503(b)(1)(A) of
the Bankruptcy Code, whether or not the transactions contemplated by this
Commitment Agreement are consummated; provided, however, that if such
transactions are not consummated as a result of the material breach by DLB and
Wexford of their covenants or obligations under this Commitment Agreement, WRT
<PAGE> 31
shall have no obligation to pay the fees and expenses of DLB and Wexford.
Payment of such reasonable out-of-pocket costs and expenses shall be made from
time to time promptly, and in no event later than 15 days, following written
demand therefor by DLB and Wexford accompanied by appropriate invoices, except
that the fees and expenses incurred by DLB and Wexford prior to October 22,
1996 shall be paid only if the Bankruptcy Court enters an order, which may be
the Confirmation Order, approving such fees and expenses. Any costs and
expenses paid to DLB and Wexford for which it is not eligible pursuant to the
proviso in the first sentence of this Section 10.03 shall be promptly returned
to WRT. The obligation of WRT to reimburse DLB and Wexford for their
reasonable out-of-pocket costs and expenses shall not exceed $1,000,000 in
excess of any and all out-of-pocket expenses of DLB and Wexford the
reimbursement of which has already been approved by the Bankruptcy Court
pursuant to the Expense Order, (whether or not DLB and Wexford have actually
sought or obtained reimbursement of any or all of such amount). DLB and
Wexford will not seek, as part of the expense reimbursement provided pursuant
to this Section 10.03, reimbursement of expenses incurred by it (a) in
connection with the negotiation and closing of any consensual arrangement
among Texaco, DLB and WRT relating to WCBB and (b) in connection with any
litigation between WRT and Texaco related to WCBB and Texaco's claims related
thereto.
Section 10.04. Liquidated Damages. If DLB or Wexford breaches in
any material respect any of its covenants or obligations under this Commitment
Agreement, then DLB and Wexford shall pay to WRT liquidated damages in the
amount of $700,000, payable following written demand therefor by WRT. The
payment of such liquidated damages shall be in addition to any other remedies
available to WRT as a result of such breach.
Section 10.05. Waivers. Any failure of WRT, DLB or Wexford to
comply with any obligation, covenant, agreement or condition herein may be
expressly waived by the party to which such obligation, covenant or agreement
is owed or for whose benefit such condition exists to the extent permitted
under applicable law. Any such waiver shall be in a writing signed by an
officer or agent of the party giving such waiver thereunto duly authorized.
Any waiver or any failure to insist upon strict compliance with any such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
Section 10.06. Brokers and Finders; Expenses. Except for Jefferies
& Company, Inc., which will be compensated as described in the Disclosure
Statement, each of WRT, DLB and Wexford represents and warrants to the others
of them that no broker or finder (including any of its officers, directors or
agents) is entitled to any brokerage or finder's fee or other commission from
it based on agreements, arrangements or undertakings made by it in connection
with this Commitment Agreement or the transactions contemplated hereby.
Except as otherwise provided in this Commitment Agreement, each party shall
bear its own costs and expenses in connection herewith.
<PAGE>32
Section 10.07. Notices. Any notice, demand, claim or other
communications under this Commitment Agreement shall be in writing and shall
be deemed to have been given upon personal delivery thereof, or upon receipt
thereof if sent by registered mail, return receipt requested, postage prepaid,
or upon confirmation of delivery thereof by courier service, if sent by
recognized overnight courier service, to the respective address of the parties
set forth below (or such other address as a party may specify by notice given
as herein provided):
If to WRT, to:
WRT Energy Corporation
Attention: Mr. Raymond P. Landry
5718 Westheimer, Suite 1201
Houston, Texas 77057
Copy to:
Sheinfeld, Maley, & Kay, P.C.
Attention: Joel P. Kay, Esq.
1001 Fannin Street, Suite 3700
Houston, Texas 77002-6797
If to DLB, Wexford and the Wexford Funds, to:
DLB Oil & Gas, Inc.
Attention: Mark Liddell
1601 N.W. Expressway, Suite 700
Oklahoma City, OK 73118-1401
- and -
Wexford Management LLC
Attention: Arthur Amron, Esq.
411 West Putnam Avenue
Greenwich, CT 06830
Copy to:
Schulte Roth & Zabel LLP
Attention: Jeffrey S. Sabin, Esq.
900 Third Avenue
New York, New York 10022
Section 10.08. Successors and Assigns. This Commitment Agreement
and all the provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors (including, without
<PAGE> 33
limitation, any trustee of WRT and New WRT) and permitted assigns, but neither
this Commitment Agreement nor any of the rights, interests or obligations
hereunder may be assigned by any of the parties hereto without the prior
written consent of the other parties.
Section 10.9. Headings. The headings of the Articles and Sections
of this Commitment Agreement are inserted for convenience only and shall not
affect the interpretation hereof.
Section 10.10. Entire Agreement. This Commitment Agreement, the
New WRT Subscription Rights Agreement, the Administrative Services Agreement
and the Plan (including the Exhibits and Schedules hereto and thereto)
contains the entire understanding of the parties hereto with respect to the
subject matter hereof. There are no restrictions promises, representations,
warranties, covenants, or undertakings among the parties relating to the
subject matter hereof other than those expressly set forth or referred to
herein or therein, subject to the approval of the Bankruptcy Court. This
Commitment Agreement supersedes all prior agreements and understandings among
the parties with respect to the subject matter hereof. In the event of any
inconsistency between the term and provisions of this Commitment Agreement and
the terms and provisions of the Plan, then, and in such event, the terms and
provisions of this Commitment Agreement shall control.
Section 10.11. Counterpart. This Commitment Agreement may be
executed in two or more counterparts, and each such counterpart shall be
deemed an original but all such counterparts together shall constitute one and
the same agreement.
Section 10.12. Governing Law. Except to the extent inconsistent
with the Bankruptcy Code, this Commitment Agreement and the legal relations
between the parties hereto shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, without giving effect to
the provisions, principles or policies thereof respecting conflict or choice
of laws.
Section 10.13. Survival. The representations and warranties of the
parties hereto shall survive only until the Effective Date but not thereafter.
Section 10.14. Effectiveness of Agreement. The provisions of this
Commitment Agreement shall become effective upon the entry by the Bankruptcy
Court of an order approving the terms and conditions hereof; provided,
however, that the provisions of Sections 5.02(b), 5.02(d) and 7.04 hereof
shall be effective upon the execution and delivery hereof.
<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have caused this Commitment
Agreement to be duly executed by their officers, partners or agents thereunto
duly authorized as of the day and year first above written.
WRT ENERGY CORPORATION, INC., Debtor
and Debtor-in-Possession
By: /s/ Raymond Landry
------------------
Name:
Title:
DLB OIL & GAS, INC.
By: /s/ Mark Liddell
-----------------
Name:
Title:
WEXFORD MANAGEMENT LLC
By: /s/ Charles Davidson
--------------------
Name:
Title:
WEXFORD MANAGEMENT LLC, as agent for:
WEXFORD CAPITAL PARTNERS II, L.P.
WEXFORD OVERSEAS PARTNERS I, L.P.
WEXFORD SPECIAL SITUATIONS 1996, L.P.
WEXFORD SPECIAL SITUATIONS 1996
INSTITUTIONAL, L.P.
WEXFORD-EURIS SPECIAL SITUATIONS 1996, L.P.
WEXFORD SPECIAL SITUATIONS 1996, LIMITED
By: /s/ Charles Davidson
--------------------
Name:
Title:
<PAGE> 35
Exhibit F
WRT ENERGY CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent
WARRANT AGREEMENT
Dated as of July 10, 1997
TABLE OF CONTENTS
Page
WARRANT AGREEMENT
Section 1. Appointment of Warrant Agent.............................1
Section 2. Warrant Certificates.....................................1
Section 3. Execution of Warrant Certificates........................2
Section 4. Registration and Countersignature........................2
Section 5. Registration of Transfers and Exchanges..................3
Section 6. Terms of Warrants; Exercise of Warrants..................4
Section 7. Payment of Expenses, Taxes and Governmental Charges......6
Section 8. Mutilated or Missing Warrant Certificates................6
Section 9. Reservation of Warrant Shares............................7
Section 10. Obtaining Stock Exchange Listings........................7
Section 11. Exercise Price and Exercise Quantity.....................7
Section 12. Adjustment of Exercise Quantity..........................7
(a) Adjustment for Change in Capital Stock.......................7
(b) Adjustment for Rights Issue..................................8
(c) Adjustment for Other Distribution............................9
(d) Adjustment for Common Stock Issue............................10
(e) Adjustment for Convertible Securities Issue..................10
(f) Current Market Price.........................................11
(g) Consideration Received; Occurrence of Transactions...........11
(h) When De Minimis Adjustment May be Deferred...................12
(i) Notice of Adjustment.........................................13
(j) Notice of Certain Transactions...............................14
(k) Reorganization of the Company................................14
(l) Warrant Agent's Disclaimer...................................14
(m) When Adjustment is not Required..............................15
(o) Form of WRT Warrants and Warrant Certificates................15
(p) Readjustment of Exercise Quantity............................15
Section 13. Fractional Interests.....................................15
Section 14. Notices to Warrant Holders...............................16
Section 15. Merger, Consolidation or Change of Name of
Warrant Agent............................................17
Section 16. Warrant Agent............................................18
Section 17. Change of Warrant Agent..................................19
Section 18. Notices to the Company and Warrant Agent.................20
Section 19. Supplements, Amendments and Modifications................21
Section 20. Successors...............................................22
Section 21. Termination..............................................22
Section 22. Return of Unclaimed Cash or Property.....................22
Section 23. Governing Law............................................23
Section 24. Benefits of this Warrant Agreement.......................23
Section 25. Agreement of Warrant Holders.............................23
Section 26. Titles and Headings......................................24
Section 27. Certain Interpretive Matters.............................24
Section 28. Entire Agreement.........................................24
-i-
Section 29. Severability.............................................24
Section 30. Counterparts.............................................24
Section 31. Determinations of the Company's Board of Directors.......24
Section 32. Glossary of Terms........................................24
{Form of Warrant Certificate}....................................A-1
{Form of Warrant Certificate}....................................A-3
FORM OF ELECTION TO PURCHASE.....................................A-5
FORM OF ASSIGNMENT...............................................A-6
-ii-
WARRANT AGREEMENT
WARRANT AGREEMENT (the "Warrant Agreement"), dated as of July 10,
1997, by and between WRT Energy Corporation, a Delaware corporation (the
"Company"), and American Stock Transfer & Trust Company, a New York
corporation, as warrant agent (the "Warrant Agent"). Unless the context
requires otherwise, capitalized terms used herein without definition shall
have the same meanings specified in the Plan.
WITNESSETH:
WHEREAS, the Company proposes to issue, pursuant to the Debtor's and
DLBW's Second Amended Joint Plan of Reorganization Under Chapter 11 of the
United States Bankruptcy Code, dated March 11, 1997, as amended (the "Plan"),
up to 1,163,400 (the "Warrant Amount") WRT Warrants, as hereinafter described
(the "WRT Warrants"), to purchase shares of WRT Common Stock, $0.01 par value
per share, of the Company (the WRT Common Stock issuable on exercise of the
WRT Warrants being referred to herein as the "Warrant Shares");
WHEREAS, the Company desires that the Warrant Agent act on behalf of
the Company, and the Warrant Agent is willing so to act, in connection with
the issuance of Warrant Certificates (as defined below in Section 2) and other
matters as provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties hereto agree as follows:
Section 1. Appointment of Warrant Agent. The Company hereby
----------------------------
appoints the Warrant Agent to act as agent for the Company and the Warrant
Holders (as defined in Section 4) in accordance with the terms and conditions
set forth hereinafter in this Warrant Agreement, and the Warrant Agent hereby
accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Warrant Certificates (as
defined in Section 2) and such further powers and authority to act on behalf
of the Company as the Company may hereafter grant to or confer upon it. All
terms and provisions with respect to such powers and authority contained in
the Warrant Certificate are subject to and governed by the terms and
provisions hereof.
Section 2. Warrant Certificates. The certificates evidencing the
--------------------
WRT Warrants (the "Warrant Certificates") to be delivered pursuant to this
Warrant Agreement shall be in registered form, substantially as set forth in
Exhibit A attached hereto. The Warrant Certificates may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as the officers of the
Company executing the same may approve (execution thereof to be conclusive
evidence of such approval) as are not inconsistent with the provisions of this
Warrant Agreement, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange or other trading system including, but not limited to, the
National Association of Securities Dealers, Inc. ("NASD") Automated Quotation
System, on which the WRT Warrants may be listed or quoted, or to conform to
usage.
Section 3. Execution of Warrant Certificates. (a) Warrant
---------------------------------
Certificates shall be signed on behalf of the Company by its Chairman of the
Board or its President or a Vice President under its corporate seal. Each
such signature upon the Warrant Certificates may be in the form of a facsimile
signature of any present or future Chairman of the Board, President or Vice
President and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, President
or Vice President, notwithstanding the fact that at the time the Warrant
Certificates shall be countersigned and delivered or disposed of he or she
shall have ceased to hold such office. The seal of the Company may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.
(b) Warrant Certificates shall be dated the date of
countersignature by the Warrant Agent. In case any officer of the Company who
shall have signed any of the Warrant Certificates shall cease to be such
officer before the Warrant Certificates so signed shall have been
countersigned by the Warrant Agent, or disposed of by the Company, such
Warrant Certificates nevertheless may be countersigned and delivered or
disposed of as though such person had not ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Warrant
Certificate, shall be a proper officer of the Company to sign such Warrant
Certificate, although at the date of the execution of this Warrant Agreement
any such person was not such an officer.
Section 4. Registration and Countersignature. (a) The Warrant
---------------------------------
Agent, on behalf of the Company, shall number and register the Warrant
Certificates in a register (the "Warrant Register") as they are issued by the
Company. The Warrant Register shall show the names and addresses of the
respective holders of the Warrant Certificates (individually, a "Warrant
Holder" and collectively, the "Warrant Holders") representing such Warrant
Holders' ownership of WRT Warrants, the number of WRT Warrants evidenced on
its face by each of the Warrant Certificates and the date of each of the
Warrant Certificates. The Warrant Register shall be kept at the office of the
Warrant Agent designated for such purpose and shall be in written form in the
English language or in any other form capable of being converted into such
form within a reasonable time.
<PAGE>
(b) Subject to the limitations set forth in subsection (c) below,
Warrant Certificates shall be manually countersigned by the Warrant Agent and
shall not be valid for any purpose unless so countersigned. The Warrant Agent
shall, upon written instructions of the Chairman of the Board, the President,
a Vice President, the Treasurer or the Controller of the Company, initially
countersign, issue and deliver Warrant Certificates entitling the Warrant
Holders thereof to purchase the Warrant Shares and shall countersign and
deliver Warrant Certificates as otherwise provided in this Warrant Agreement.
(c) A number of Warrant Certificates up to the Warrant Amount may
be executed by the Company and delivered to the Warrant Agent upon the
execution of this Warrant Agreement or from time to time thereafter,
evidencing the right to receive an aggregate number of Warrant Shares equal to
the Warrant Amount. Subsequent to such original issuance of the Warrant
Certificates, the Warrant Agent shall countersign a Warrant Certificate only
if the Warrant Certificate is issued upon registration of transfer or in
exchange or substitution for one or more previously countersigned Warrant
Certificates, as hereinafter provided.
(d) In case at any time the name of the Warrant Agent shall be
changed (including by operation of Section 15) and at such time any of the
Warrant Certificates shall be countersigned but not delivered, the Warrant
Agent may adopt the countersignature under its prior name; and in case at that
time any of the Warrant Certificates shall not have been countersigned, the
Warrant Agent may countersign such Certificates either in its prior name or in
its changed name and in all such cases such Warrant Certificates shall have
the full force provided in the Warrant Certificates and in this Warrant
Agreement.
(e) The Company, the Warrant Agent and all other persons may deem
and treat the registered Warrant Holder as the absolute owner of the Warrant
Certificates (notwithstanding any notation of ownership or other writing
thereon made by anyone) for all purposes and neither the Company, the Warrant
Agent nor any other person shall be affected by any notice to the contrary.
Section 5. Registration of Transfers and Exchanges. (a) The
---------------------------------------
Warrant Agent shall from time to time register the transfer of any outstanding
Warrant Certificates in the Warrant Register, upon surrender thereof (together
with the form of assignment set forth on the reverse side of the Warrant
Certificates duly filled in and signed, which signature shall be guaranteed by
an eligible guarantor institution (a bank, stockbroker, savings and loan
association or credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") to the Warrant Agent at its office
designated for such purpose accompanied (if so required by it or the Company)
by a written instrument or instruments of transfer (which shall be in a form
reasonably satisfactory to the Warrant Agent and the Company), duly executed
by the registered Warrant Holder or Warrant Holders thereof or by the duly
appointed legal representative thereof or by a duly authorized attorney. Upon
any such registration of transfer, a new Warrant Certificate or Warrant
<PAGE>
Certificates (of like tenor and representing in the aggregate a like number of
WRT Warrants) shall be issued to the transferee(s) and the surrendered Warrant
Certificate or Warrant Certificates shall be canceled by the Warrant Agent.
Canceled Warrant Certificates shall thereafter be disposed of by such Warrant
Agent in a manner satisfactory to the Company.
(b) The Warrant Agent is hereby authorized to countersign, in
accordance with the provisions of Section 4 hereof and of this Section 5, the
new Warrant Certificates required pursuant to the provisions of this Section
5, and the Company, whenever required by the Warrant Agent, will supply the
Warrant Agent with Warrant Certificates duly executed on behalf of the Company
for such purposes. The Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any exchange or registration of transfer of Warrant Certificates.
Section 6. Terms of Warrants; Exercise of Warrants. (a) Subject
---------------------------------------
to the terms of this Warrant Agreement, each Warrant Holder shall have the
right, which may be exercised commencing at 9:00 A.M., New York City time, on
the date of this Warrant Agreement and until 5:00 P.M., New York City time, on
July 10, 2002 (the "Expiration Time") to purchase from the Company the number
of fully paid and nonassessable Warrant Shares which the Warrant Holder may at
the time be entitled to receive (the "Exercise Quantity", as further defined
in Section 11) on exercise of such WRT Warrants and payment of the Exercise
Price (as defined in Section 11) then in effect for such Warrant Shares. Each
WRT Warrant not exercised prior to the Expiration Time shall become null and
void and all rights thereunder and all rights in respect thereof under this
Warrant Agreement and the Warrant Certificates shall cease as of such time.
If the Expiration Time shall not be a business day, then the Expiration Time
shall be on the next succeeding business day.
(b) A WRT Warrant may be exercised upon surrender to the Company
at the office of the Warrant Agent designated for such purpose of the Warrant
Certificate or Warrant Certificates evidencing the WRT Warrants to be
exercised with the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall be guaranteed by an eligible
guarantor institution (a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee medallion
program) pursuant to Rule 17Ad-15 of the Exchange Act, and upon payment to the
Warrant Agent for the account of the Company of the Exercise Price for the
number of Warrant Shares in respect of which such WRT Warrants are then
exercised. Payment of the aggregate Exercise Price shall be made in cash or
by certified or official bank check to the order of the Warrant Agent, as
Warrant Agent for the Company.
(c) Subject to the provisions of Section 7 hereof, upon such
surrender of WRT Warrants, delivery of required documents and payment of the
Exercise Price, the Company (or the surviving entity in the case of a Non-
Surviving Combination as defined in subsection (l) of Section 12 hereof) shall
issue and cause the Warrant Agent to deliver as described in subsection (d)
hereof a certificate or certificates for the number of full Warrant Shares (or
<PAGE>
other cash or property to which the Warrant Holder is entitled) issuable (or
deliverable) upon the exercise of such WRT Warrants together with cash as
provided in Section 13; provided, however, that after the first public
announcement that any consolidation, merger or lease or sale of assets is
proposed to be effected by the Company as described in subsection (l) of
Section 12 hereof, or a tender offer or an exchange offer for shares of WRT
Common Stock shall be made, upon such surrender of WRT Warrants, delivery of
required documents and payment of the Exercise Price as aforesaid, the Company
shall, as soon as possible, but in any event not later than three (3) business
days thereafter, issue and cause to be delivered the full number of Warrant
Shares issuable upon the exercise of such WRT Warrants in the manner described
in this sentence together with cash as provided in Section 13. Such
certificate or certificates (or such other cash or property) shall be deemed
to have been issued (or delivered) and any person so designated to be named
therein shall be deemed to have become a holder of record of such Warrant
Shares (or such other cash or property) as of the date of the surrender of
such WRT Warrants, the delivery of required documents and payment of the
Exercise Price.
(d) As promptly as practicable after an exercise of WRT Warrants
in accordance with this Section 6, and in any event within three (3) business
days after such exercise, the Warrant Agent will (1) requisition from any
transfer agent for the WRT Common Stock (the "Transfer Agent") (or make
available, if the Warrant Agent is the Transfer Agent) certificates
representing the number of Warrant Shares to be purchased (and the Company
hereby irrevocably authorizes and directs the Warrant Agent to so requisition
and its Transfer Agent to comply with all such requests), (2) after receipt of
such certificates, cause the same to be delivered to or upon the order of the
Warrant Holder exercising such WRT Warrants, registered in such name or names
as may be designated by such Warrant Holder, (3) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of the issuance of
fractional Warrant Shares or fractional interests in any other securities, as
the case may be, in accordance with the provisions of Section 13 and (4) when
appropriate, after receipt, deliver such cash to or upon the order of the
Warrant Holder exercising such WRT Warrants.
(e) Subject to the provisions of this Warrant Agreement and the
Warrant Certificates, the WRT Warrants shall be exercisable, at the election
of the Warrant Holders thereof, either in full or from time to time in part
and, in the event that a certificate evidencing WRT Warrants is exercised in
respect of fewer than all of the Warrant Shares issuable on such exercise at
any time prior to the Expiration Time, a new certificate evidencing the
remaining WRT Warrant or WRT Warrants will be issued, and the Warrant Agent is
hereby irrevocably authorized to countersign and to deliver the required new
Warrant Certificate or Warrant Certificates pursuant to the provisions of this
Section and of Sections 3 and 4 hereof, and the Company, whenever required by
the Warrant Agent, will supply the Warrant Agent with Warrant Certificates
duly executed on behalf of the Company for such purpose.
<PAGE>
(f) All Warrant Certificates surrendered upon exercise of WRT
Warrants shall be canceled by the Warrant Agent. Such canceled Warrant
Certificates shall then be disposed of by the Warrant Agent in a manner
satisfactory to the Company. The Warrant Agent shall account promptly to the
Company with respect to WRT Warrants exercised and concurrently pay to the
Company all monies received by the Warrant Agent for the purchase of the
Warrant Shares through the exercise of such WRT Warrants.
(g) The Warrant Agent and the Transfer Agent shall keep copies of
this Warrant Agreement and any notices given or received hereunder available
for inspection by the Warrant Holders during normal business hours at each of
their offices. The Company shall supply the Warrant Agent and the Transfer
Agent from time to time with such numbers of copies of this Warrant Agreement
as the Warrant Agent and/or the Transfer Agent may request and the Company
will furnish to the Warrant Agent and the Transfer Agent a copy of all notices
of adjustments and certificates related thereto transmitted to each Warrant
Holder pursuant to Section 14 hereof.
(h) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (1) the number of WRT Warrants delivered to
it in accordance with the terms and conditions of this Warrant Agreement and
the Warrant Certificates, (2) the instructions of each Warrant Holder with
respect to delivery of the Warrant Shares or other cash or property to which
such Warrant Holder is entitled upon such delivery, (3) the delivery of
Warrant Certificates evidencing the balance, if any, of the WRT Warrants
remaining after such delivery and (4) such other information as the Company
shall reasonably request.
(i) Warrant Holders, as such, shall not be entitled (1) to
receive any dividends in respect of such Warrant Holders' Warrant Shares, (2)
to vote or to receive notice of any meeting of the Company's stockholders for
the election of Directors or for any other matter whatsoever or (3) to
otherwise exercise any rights of, or to receive any notices delivered to,
holders of WRT Common Stock until such Warrant Holder surrenders its Warrant
Certificate(s) to the Warrant Agent, pays the Exercise Price and delivers all
other required documentation, all as set forth in this Warrant Agreement and
the Warrant Certificates, and the Warrant Shares in respect of such WRT
Warrants are issued to such Warrant Holder.
Section 7. Payment of Expenses, Taxes and Governmental Charges.
-------------------
The Company will pay all expenses, documentary stamp taxes and other taxes and
charges attributable to the initial issuance of Warrant Shares upon the
exercise of WRT Warrants; provided, however, that the Company's obligations in
this regard will in all events be conditioned upon the Warrant Holder
cooperating with the Company and the Warrant Agent in any reasonable
arrangement designed to minimize or eliminate any such taxes or expenses; and
further, provided that the Company shall not be required to pay any tax or
other governmental charge which may be payable in respect of any transfer or
exchange of any WRT Warrants or Warrant Certificates, as the case may be,
<PAGE>
including, without limitation, any transfer involved in the issuance of any
Warrant Shares. If any such transfer is involved, the Company shall not be
required to issue or deliver any Warrant Shares until such tax or other charge
shall have been paid or it has been established to the Company's satisfaction
that no such tax or other charge is due.
Section 8. Mutilated or Missing Warrant Certificates. In case any
-----------------------------------------
of the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue and the Warrant Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing
an equivalent number of WRT Warrants, but only upon receipt of evidence
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrant Certificate and of an indemnity reasonably
satisfactory to the Company. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and pay
(prior to the issuance of any Warrant Certificates in accordance with this
Section 8) such other reasonable charges (including, without limitation, any
tax or other governmental charge that may be imposed in relation thereto and
the fees and expenses of the Warrant Agent in connection therewith) as the
Company or the Warrant Agent may prescribe.
Section 9. Reservation of Warrant Shares. The Company will at all
-----------------------------
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued WRT Common Stock or its authorized
and issued WRT Common Stock held in its treasury, for the purpose of enabling
it to satisfy any obligation to issue Warrant Shares upon exercise of WRT
Warrants, the maximum number of shares of WRT Common Stock which may then be
deliverable upon the exercise of all outstanding WRT Warrants.
Section 10. Obtaining Stock Exchange Listings. (a) The Company
---------------------------------
will from time to time take all reasonable actions so that the WRT Warrants
will be listed or quoted on the same principal securities exchanges, the NASD
Automated Quotation System or other markets within the United States of
America, if any, as shares of WRT Common Stock are listed or quoted.
(b) The Company will take all such action as may be necessary to
ensure that all Warrant Shares delivered upon exercise of WRT Warrants, at the
time of delivery of the certificates for such Warrant Shares, will (subject to
payment of the Exercise Price) be duly and validly authorized and issued,
fully paid, nonassessable, free of preemptive rights and, subject to Section
7, free from all taxes, liens, charges and security interests with respect to
the issue thereof and, if shares of WRT Common Stock are then listed on any
national securities exchange (as defined in the Exchange Act) or qualified for
quotation on the NASD Automated Quotation System, will be duly listed or
qualified for quotation thereon, as the case may be.
<PAGE>
Section 11. Exercise Price and Exercise Quantity. Each new WRT
------------------------------------
Warrant will initially represent the right to purchase one (1) share of WRT
Common Stock (the "Exercise Quantity") on the terms and subject to the
conditions set forth herein. The purchase price payable per share of WRT
Common Stock upon the exercise of each WRT Warrant will initially be Ten
Dollars ($10.00) (the "Exercise Price"). The Exercise Quantity and the
Exercise Price are subject to adjustment pursuant to the provisions of Section
12.
Section 12. Adjustment of Exercise Quantity. The Exercise
-------------------------------
Quantity is subject to adjustment from time to time upon the occurrence of the
events enumerated in this Section 12.
(a) Adjustment for Change in Capital Stock. (1) Subject to
--------------------------------------
subsection (h), if the Company:
(i) pays a dividend or makes a distribution on WRT
Common Stock in shares of WRT Common Stock;
(ii) subdivides its outstanding shares of WRT Common
Stock into a greater number of shares;
(iii) combines its outstanding shares of WRT Common
Stock into a smaller number of shares; or
(iv) issues by reclassification of WRT Common Stock any
shares of its capital stock (including any such reclassification in
connection with a consolidation, merger, or other business
combination transaction in which the Company is the continuing or
surviving corporation);
then the Exercise Quantity in effect immediately prior to such action shall be
proportionately adjusted so that the Warrant Holder of any WRT Warrants
thereafter exercised may receive (A) in the case of a dividend or
distribution, the sum of (I) the number of Warrant Shares that, if such WRT
Warrant had been exercised immediately prior to such adjustment, such Warrant
Holder would have received upon such exercise and (II) the number and kind of
additional shares of capital stock that such Warrant Holder would have been
entitled to receive as a result of such dividend or distribution by virtue of
its ownership of such Warrant Shares, (B) in the case of a subdivision or
combination, the number of Warrant Shares that, if such WRT Warrant had been
exercised immediately prior to such adjustment, such Warrant Holder would have
received upon such exercise, adjusted to give effect to such subdivision or
combination as if such Warrant Shares had been subject thereto, or (C) in the
case of an issuance in a reclassification, the sum of (I) the number of
Warrant Shares that, if such WRT Warrant had been exercised immediately prior
to such adjustment, such Warrant Holder would have received upon such
exercise, and retained after giving effect to such reclassification as if
such Warrant Shares had been subject thereto and (II) the number and kind of
additional shares of capital stock that such Warrant Holder would have been
entitled to receive as a result of such reclassification as if such Warrant
Shares had been subject thereto.
<PAGE>
(2) An adjustment made pursuant to this subsection (a)
will become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution in the case
of a dividend or distribution and will become effective immediately after the
effective date of such subdivision, combination, or reclassification in the
case of a subdivision, combination, or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
(3) If pursuant to any adjustment, a Warrant Holder, upon
its exercise of WRT Warrants, will receive shares of two or more classes of
capital stock of the Company, the Company's Board of Directors shall determine
the allocation of the Exercise Price between the classes of capital stock.
After such allocation, the exercise privilege and the Exercise Quantity of
each class of capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to WRT Common Stock in this Section.
(b) Adjustment for Rights Issue. (1) Subject to subsection (h),
---------------------------
if the Company distributes any rights, options or warrants to all holders of
its WRT Common Stock entitling them to purchase shares of WRT Common Stock at
a price per share less than the Current Market Price (as defined in subsection
(f)) per share as of the record date established for such distribution, the
Exercise Quantity shall be adjusted to the number that results from
multiplying the Exercise Quantity in effect immediately prior to such
adjustment by a fraction (not to be less than one), the numerator of which
will be the number of shares of WRT Common Stock outstanding on such record
date plus the number of additional shares of WRT Common Stock offered by such
rights, options or warrants for subscription or purchase and the denominator
of which will be the number of shares of WRT Common Stock outstanding on such
record date plus the number of shares of WRT Common Stock which the aggregate
subscription or purchase price of the total number of shares of WRT Common
Stock so offered would purchase at the Current Market Price per share of WRT
Common Stock on such record date.
(2) Such adjustment will be made whenever such rights,
options, or warrants are issued and will become effective immediately after
the record date for the determination of stockholders entitled to receive such
rights, options or warrants. In case such subscription or purchase price may
be paid in a consideration part or all of which is in a form other than cash,
the fair value of such consideration will be as determined by the Board of
Directors of the Company, whose good faith determination will be conclusive.
Except as provided in subsection (o), no further adjustments of the number of
Warrant Shares will be made upon the actual issue of shares of WRT Common
Stock upon exercise of such rights, options or warrants.
(c) Adjustment for Other Distribution. (1) Subject to subsection
---------------------------------
(h), if the Company distributes to holders of its WRT Common Stock, as such,
(i) evidences of indebtedness or assets (excluding regular cash dividends or
cash distributions payable out of consolidated retained earnings) of the
Company or any corporation or other legal entity a majority of the voting
<PAGE>
equity securities or equity interests of which are owned, directly or
indirectly, by the Company (a "Subsidiary"), (ii) shares of capital stock of
any Subsidiary, (iii) securities convertible into or exchangeable for capital
stock (including WRT Common Stock or capital stock of any other class) of the
Company or any Subsidiary (excluding those securities described in subsection
(b)) or (iv) any rights, options or warrants to purchase any of the foregoing
(excluding those securities described in subsection (b)) then the Exercise
Quantity will be adjusted to the number that results from multiplying the
Exercise Quantity in effect immediately prior to such adjustment by a
fraction, the numerator of which will be the Current Market Price per share of
WRT Common Stock on the record date for such distribution, and the denominator
of which will be such Current Market Price per share of WRT Common Stock less
the fair value (as determined in good faith by the Board of Directors of the
Company, whose determination will be conclusive) of the portion of the
evidences of indebtedness, assets, securities, rights, options or warrants so
distributed on account of one share of WRT Common Stock. Such adjustment will
be made whenever any such distribution is made and will become effective
immediately after the record date for the determination of stockholders
entitled to receive such distribution.
(2) Except as provided in subsection (o), no further
adjustments of the number of Warrant Shares will be made upon the actual
issuance of shares of WRT Common Stock upon conversion or exchange of such
securities convertible or exchangeable for shares of WRT Common Stock or upon
exercise of such rights, warrants or options for shares of WRT Common Stock.
Adjustments made pursuant to this subsection (c) shall be made successively
whenever any such distribution is made and shall become effective on the
effective date of any such distribution, retroactive to the record date for
such event.
(d) Adjustment for Common Stock Issue. (1) Subject to subsection
---------------------------------
(h), if the Company issues shares of WRT Common Stock for a consideration per
share less than the Current Market Price per share as of the date the Company
fixes the offering price of such additional shares, the Exercise Quantity will
be adjusted to the number that results from multiplying the Exercise Quantity
immediately prior to such adjustment by a fraction, (not to be less than one),
the numerator of which will be the number of shares of WRT Common Stock
outstanding on such date plus the number of additional shares of WRT Common
Stock so issued, and the denominator of which will be the number of shares of
WRT Common Stock outstanding on such date plus the number of shares of WRT
Common Stock which the aggregate purchase price received by the Company for
such additional shares of WRT Common Stock would purchase at the Current
Market Price per share of WRT Common Stock on such date. Adjustments pursuant
to this subsection (d) shall be made successively whenever any such issuance
is made and shall become effective immediately after such issuance.
(2) This subsection (d) does not apply to:
(i) any of the transactions described in
subsections (a), (b), (c) or (e) of this Section 12;
<PAGE>
(ii) the exercise of WRT Warrants, or the conversion
or exchange of other securities convertible or exchangeable for WRT
Common Stock; or
(iii) WRT Common Stock issued to stockholders of any
person which merges with or into the Company, or with or into a
subsidiary of the Company, in proportion to the stock holdings of
such person immediately prior to such merger.
(e) Adjustment for Convertible Securities Issue. (1) Subject to
-------------------------------------------
subsection (h), if the Company issues any securities ("Convertible
Securities") convertible or exercisable into or exchangeable for WRT Common
Stock (other than securities issued in transactions described in subsections
(a), (b), (c) or (d) of this Section 12) for a consideration per share of WRT
Common Stock initially deliverable upon conversion, exercise or exchange of
such securities less than the Current Market Price per share as of the date of
issuance of such securities, then the Exercise Quantity will be adjusted to
the number that results from multiplying the Exercise Quantity immediately
prior to such adjustment by a fraction, (not to be less than one), the
numerator of which will be the number of shares of WRT Common Stock
outstanding on such date plus the number of additional shares of WRT Common
Stock issuable upon such conversion, exercise or exchange, and the denominator
of which will be the number of shares of WRT Common Stock outstanding on such
date plus the number of shares of WRT Common Stock which the aggregate
conversion, exercise or exchange price receivable by the Company for such
additional shares of WRT Common Stock would purchase at the Current Market
Price per share of WRT Common Stock on such date. In case such conversion,
exercise or exchange price may be paid in a consideration part or all of which
is in a form other than cash, the fair value of such consideration will be as
determined by the Board of Directors of the Company. Except as provided in
subsection (o), no further adjustment will be made upon the actual issue of
shares of WRT Common Stock upon conversion, exercise or exchange of
Convertible Securities into or exchangeable for shares of WRT Common Stock.
Adjustments pursuant to this subsection (e) shall be made successively
whenever any such issuance is made and shall become effective immediately
after such issuance.
(2) This subsection (e) does not apply to:
(i) Convertible Securities issued to stockholders
of any person which merges with or into the Company, or with or into
a subsidiary of the Company, in proportion to the stock holdings of
such person immediately prior to such merger;
(ii) convertible securities issued in a bona fide
public offering pursuant to a firm commitment underwriting; or
(iii) WRT Common Stock issuances to employees or
directors of the Company under or pursuant to employee benefit or
option plans approved by either the Board of Directors or
stockholders of the Company.
<PAGE>
(f) Current Market Price. In subsections (b), (c), (d) and (e)
--------------------
of this Section 12 the "Current Market Price" per share of WRT Common Stock as
of any date is the average of the Closing Prices (as defined below) of the WRT
Common Stock for 20 consecutive trading days commencing 30 trading days before
the date in question. "Closing Price" shall equal (1) the last reported sales
price of the WRT Common Stock on the principal national securities exchange on
which such WRT Common Stock is listed or admitted to trading or, if no such
reported sale takes place on such date, the average of the closing bid and
asked prices thereon, as reported in The Wall Street Journal, or (2) if such
WRT Common Stock shall not be listed or admitted to trading on a national
securities exchange, the last reported sales price on the NASD Automated
Quotation System or, if no such reported sale takes place on any such date,
the average of the closing bid and asked prices thereon, as reported in The
Wall Street Journal, or (3) if such WRT Common Stock shall not be quoted on
the NASD Automated Quotation System nor listed or admitted to trading on a
national securities exchange, then the average of the closing bid and asked
prices, as reported by The Wall Street Journal for the over-the-counter market
in which such WRT Common Stock is traded. In the absence of one or more such
quotations, the Board of Directors of the Company shall determine the Closing
Price on the basis of such quotations or other facts as it considers
appropriate.
(g) Consideration Received; Occurrence of Transactions. (1) For
--------------------------------------------------
purposes of any computation respecting consideration received pursuant to
subsections (d) and (e) of this Section 12, the following shall apply:
(i) in the case of the issuance of shares of WRT
Common Stock for cash, the consideration shall be the amount of such
cash, provided that in no case shall any deduction be made for any
--------
commissions, discounts or other expenses incurred by the Company for
any underwriting of the issue or otherwise in connection therewith;
(ii) in the case of the issuance of shares of WRT
Common Stock for a consideration in whole or in part other than
cash, the consideration other than cash shall be deemed to be the
fair market value thereof as determined in good faith by the
Company's Board of Directors (irrespective of the accounting
treatment thereof), whose determination shall be conclusive, and
described in a report of the Company's Board of Directors which
shall be filed with the Warrant Agent; and
(iii) in the case of the issuance of securities
convertible into or exchangeable for shares, the aggregate
consideration received therefor shall be deemed to be the
consideration received by the Company for the issuance of such
securities plus the additional minimum consideration, if any, to be
received by the Company upon the conversion or exchange thereof (the
consideration in each case to be determined in the same manner as
provided in clauses (1) and (2) of this subsection).
<PAGE>
(2) For the purpose of any adjustment made pursuant to
this Section 12, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.
(h) When De Minimis Adjustment May Be Deferred. (1) No
------------------------------------------
adjustment in the Exercise Quantity need be made unless the adjustment would
require an increase or decrease of at least 1.0% in the Exercise Quantity.
Any adjustments that are not made shall be carried forward and made at the
time and together with the next subsequent adjustment which, together with any
adjustments so carried forward, would require an increase or decrease of 1.0%
or more in the number of Warrant Shares purchasable upon the hypothetical
exercise of a WRT Warrant. All calculations with respect to the number of
Warrant Shares will be made to the nearest one-hundredth (1/100th) of a share.
(2) No adjustment in the Exercise Quantity will be made
under subsections (b), (c) or (e) of this Section 12 if the Company issues or
distributes to each Warrant Holder the shares, rights, options, warrants,
convertible or exchangeable securities, evidences of indebtedness, assets or
other securities referred to in the applicable subsection that such Warrant
Holder would have been entitled to receive had the WRT Warrants been exercised
prior to the happening of such event on the record date with respect thereto
(provided that, in any case in which such Warrant Holder would have been so
entitled to receive a fractional interest in any such securities or assets,
the Company may distribute to such Warrant Holder in lieu of such fractional
interest cash in an amount equal to the fair value of such fractional interest
as determined in good faith by the Board of Directors of the Company).
(3) No adjustment in the Exercise Quantity will be made on
account of: (i) any issuance of shares of WRT Common Stock or of options,
rights, or warrants to purchase, or securities convertible into or
exchangeable for, shares of WRT Common Stock, pursuant to or in satisfaction
of any obligation under the Plan, (ii) any issuance of shares of WRT Common
Stock upon the exercise of options, rights or warrants or upon the conversion
or exchange of convertible or exchangeable securities, in either case issued
pursuant to or in satisfaction of any obligation under the Plan outstanding as
of the date hereof, (iii) any issuance of shares of WRT Common Stock, or of
options, rights or warrants to purchase, or securities exchangeable for or
convertible into, shares of WRT Common Stock, in accordance with any plan for
the benefit of the employees or Directors of the Company or any of its
Subsidiaries existing as of the date hereof or any other plan adopted by the
Directors of the Company for the benefit of the employees or Directors of the
Company or any of its Subsidiaries, (iv) any issuance of shares of WRT Common
Stock in connection with a Company-sponsored plan for reinvestment of
dividends or interest, (v) any issuance of WRT Subscription Common Stock (as
defined in the WRT Subscription Rights Agreement described hereafter), or
other common stock subscription rights, if any, pursuant to the WRT
Subscription Rights Agreement or any similar successor or replacement common
stock subscription rights agreement or (vi) any issuance of shares of WRT
Common Stock or securities convertible into or exchangeable for shares of WRT
Common Stock pursuant to an underwritten public offering for a price per share
<PAGE>
of WRT Common Stock in the case of an issuance of shares of WRT Common Stock,
or for a price per share of WRT Common Stock initially delivered upon
conversion or exchange of such securities, that is equal to or greater than
95% of the Closing Price per share of WRT Common Stock on the date the
offering, conversion or exchange price of such additional shares of WRT Common
Stock is first fixed. No adjustment in the number of Warrant Shares will be
made for a change in the par value of the shares of WRT Common Stock.
(i) Whenever the Exercise Quantity is adjusted, as provided
-----------------------------------
herein, the Exercise Price payable upon exercise of each WRT Warrant shall be
adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, the numerator of which shall be the number of
Warrant Shares purchasable upon the exercise of each WRT Warrant immediately
prior to such adjustment, and the denominator of which shall be the number of
Warrant Shares purchasable immediately thereafter.
(j) Notice of Adjustment. Whenever the Exercise Quantity and
--------------------
Exercise Price are adjusted, the Company shall provide the notices required by
Section 14 hereof.
(k) Notice of Certain Transactions. If:
------------------------------
(1) the Company takes any action that would require an
adjustment in the Exercise Quantity pursuant to subsections (a), (b), (c), (d)
or (e) of this Section 12; or
(2) the Company takes any action that would require a
supplemental Warrant Agreement pursuant to subsection (l) of this Section 12;
then, the Company shall mail to the Warrant Agent and shall cause the Warrant
Agent to send to the Warrant Holders a notice stating the proposed record date
for a dividend or distribution or the proposed effective date of a
subdivision, combination, reclassification, consolidation, merger, transfer,
lease, liquidation or dissolution. The Company shall mail the notice at least
30 business days before such date.
(l) Reorganization of the Company. (1) If the Company effects
-----------------------------
a Non-Surviving Combination (as defined below), upon consummation of such
transaction the WRT Warrants shall automatically become exercisable for the
kind and amount of securities, cash or other assets which the Warrant Holder
would have owned immediately after the consolidation, merger or other business
combination if the Warrant Holder had exercised the WRT Warrant immediately
before the effective date of the transaction. Concurrently with the
consummation of such transaction, the corporation formed by or surviving any
such consolidation, merger or other business combination if other than the
Company, or the person to which such sale or conveyance shall have been made,
shall enter into a supplemental Warrant Agreement so providing and further
providing for adjustments which shall be as nearly equivalent as may be
<PAGE>
practicable to the adjustments provided for in this Section. The successor
company shall mail to Warrant Holders a notice describing the supplemental
Warrant Agreement. If the issuer of securities deliverable upon exercise of
WRT Warrants under the supplemental Warrant Agreement is an affiliate of the
former, surviving, transferee or lessee corporation, that issuer shall join in
the supplemental Warrant Agreement.
(2) For purposes of this Warrant Agreement, "Non-Surviving
Combination" means any merger, consolidation or other business combination by
the Company with one or more other persons in which any such other person is
the survivor, or a sale of all or substantially all of the assets of the
Company to one or more such other persons (in one transaction or in two or
more related transactions), and with respect to which cash and/or non-cash
consideration is to be distributed to holders of WRT Common Stock; provided
that if any such merger, consolidation, sale of assets or other business
combination, in which the holders of WRT Common Stock receive cash or non-cash
consideration in exchange for their WRT Common Stock, is structured so that
the Company is the surviving entity, such transaction shall nevertheless be
deemed a Non-Surviving Combination.
(m) Warrant Agent's Disclaimer. The Warrant Agent has no duty to
--------------------------
determine when an adjustment under this Section 12 should be made, how it
should be made or what it should be. The Warrant Agent has no duty to
determine whether any provisions of a supplemental Warrant Agreement under
subsection (l) of this Section 12 are correct. The Warrant Agent makes no
representation as to the validity or value of any securities or assets issued
upon exercise of WRT Warrants. The Warrant Agent shall not be responsible for
the Company's failure to comply with this Section.
(n) When Adjustment is not Required. If the Company shall take a
-------------------------------
record of the holders of WRT Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and
shall, thereafter and before the distribution to stockholders thereof, legally
abandon its plan to pay or deliver such dividend, distribution, subscription
or purchase rights, then thereafter no adjustment shall be required by reason
of the taking of such record and any such adjustment previously made in
respect thereof shall be rescinded and annulled.
(o) Form of WRT Warrants and Warrant Certificates. Irrespective
---------------------------------------------
of any adjustments in the Exercise Quantity, other WRT Warrants and Warrant
Certificates theretofore or thereafter issued may continue to express the same
price and number and kind of Warrant Shares as are stated in the WRT Warrants
initially issuable pursuant to this Warrant Agreement.
(p) Readjustment of Exercise Quantity and Exercise Price. Upon
----------------------------------------------------
the expiration of any rights, options, warrants or conversion or exchange
privileges, if any thereof have not been exercised, the Exercise Quantity and
<PAGE>
the Exercise Price will, upon such expiration, be readjusted and will
thereafter be such as it would have been had it been originally adjusted (or
had the original adjustment not been required, as the case may be) as if (1)
the only shares of WRT Common Stock so issued were the shares of WRT Common
Stock, if any, actually issued or sold upon the exercise of such rights,
options, warrants or conversion or exchange rights and (2) such shares of WRT
Common Stock, if any, were issued or sold, or the consideration actually
received by the Company upon such exercise, conversion or exchange plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options, warrants, or conversion
or exchange rights whether or not exercised; provided, however, that no such
readjustment will have the effect of decreasing the Exercise Quantity or
increasing the Exercise Price by an amount in excess of the amount of the
adjustment initially made in respect of the issuance, sale or grant of such
rights, options, warrants or conversion or exchange privileges.
Section 13. Fractional Interests. Neither the Company nor the
--------------------
Warrant Agent shall be required to issue fractional Warrant Shares or
fractional interests in any other securities on the exercise of WRT Warrants.
If more than one WRT Warrant shall be presented for exercise in full at the
same time by the same Warrant Holder, the number of full Warrant Shares which
shall be issuable upon the exercise thereof shall be computed on the basis of
the aggregate number of Warrant Shares purchasable on exercise of the WRT
Warrants so presented. If any fraction of a Warrant Share or fractional
interests in any other securities would, except for the provisions of this
Section 13, be issuable on the exercise of any WRT Warrants (or specified
portion thereof), the Company shall pay an amount in cash equal to the Closing
Price (as defined in subsection (f) of Section 12 hereof) or, in the case of
fractional interests in any other securities, the fair value of such
interests, as determined by the Company's Board of Directors, on the day
immediately preceding the date the WRT Warrant is presented for exercise,
multiplied by such fraction or fractional interests, as the case may be.
Section 14. Notices to Warrant Holders. (a) Upon the
--------------------------
determination of the Exercise Quantity provided in Section 12, the Company
shall promptly thereafter (1) cause to be filed with the Warrant Agent a
certificate of the Company's Board of Directors setting forth the Exercise
Quantity and Exercise Price and setting forth in reasonable detail the method
of calculation and the facts upon which such calculations were based and
setting forth the number of Warrant Shares (or portion thereof) issuable upon
exercise of a WRT Warrant and the Exercise Price thereof after such
adjustments which certificate shall be conclusive evidence of the correctness
of the matters set forth therein and (2) cause to be given to each of the
registered Warrant Holders at each Warrant Holders' address appearing on the
Warrant Register written notice of such determinations by first class mail,
postage prepaid. Upon any adjustment of the Exercise Quantity and Exercise
Price pursuant to Section 12, the Company shall promptly thereafter (1) cause
to be filed with the Warrant Agent a certificate of the Company's independent
public accountants setting forth the Exercise Quantity and Exercise Price
<PAGE>
after such adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such calculations are based and setting
forth the number of Warrant Shares (or portion thereof) issuable after such
adjustment in the Exercise Quantity, upon exercise of a WRT Warrant and
payment of the Exercise Price, which certificate shall be conclusive evidence
of the correctness of the matters set forth therein and (2) cause to be given
to each of the registered Warrant Holders at each Warrant Holders' address
appearing on the Warrant Register written notice of such adjustments by first-
class mail, postage prepaid. Where appropriate, such notice may be given in
advance and included as a part of the notice required to be mailed under the
other provisions of this Section 14.
(b) In case:
(i) the Company shall authorize the issuance to all
holders of shares of WRT Common Stock of rights, options or warrants
to subscribe for or purchase shares of WRT Common Stock or of any
other subscription rights or warrants; or
(ii) the Company shall authorize the distribution to all
holders of shares of WRT Common Stock of evidences of its
indebtedness or assets (other than cash dividends or cash
distributions payable out of consolidated earnings or earned surplus
or dividends payable in shares of WRT Common Stock or distributions
referred to in subsection (a) of Section 12 hereof); or
(iii) of any consolidation or merger to which the Company is
a party and for which approval of any stockholders of the Company is
required, or of the conveyance or transfer of the properties and
assets of the Company substantially as an entirety, or of any
reclassification or change of WRT Common Stock issuable upon
exercise of the WRT Warrants (other than a change in par value, or
from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), or a tender offer
or exchange offer for shares of WRT Common Stock; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(v) the Company proposes to take any action (other than
actions of the character described in Section 12(a)) which would
require an adjustment of the Exercise Quantity pursuant to Section
12;
then the Company shall cause to be filed with the Warrant Agent and shall
cause to be given to each of the registered Warrant Holders at each Warrant
Holders' address appearing on the Warrant Register, at least 15 days prior to
the applicable record date, or promptly in the case of events for which there
is no record date, by first-class mail, postage prepaid, a written notice
stating (1) the date as of which the holders of record of shares of WRT Common
Stock that will be entitled to receive any such rights, options, warrants or
<PAGE>
distribution are to be determined, or (2) the initial expiration date set
forth in any tender offer or exchange offer for shares of WRT Common Stock or
(3) the date on which any such consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up is expected to become effective or
consummated, and the date as of which it is expected that holders of record of
shares of WRT Common Stock shall be entitled to exchange such shares for
securities or other property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up.
Section 15. Merger, Consolidation or Change of Name of Warrant
--------------------------------------------------
Agent. Any corporation into which the Warrant Agent may be merged or with
- ----=
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust or shareholder services business of the
Warrant Agent, shall be the successor to the Warrant Agent hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Warrant Agent under the provisions of Section 17.
In case at the time such successor to the Warrant Agent shall succeed to the
agency created by this Warrant Agreement, and in case at that time any of the
Warrant Certificates shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent; and in case at that time any of the Warrant Certificates shall
not have been countersigned, any successor to the Warrant Agent may
countersign such Warrant Certificates either in the name of the predecessor
Warrant Agent or in the name of the successor to the Warrant Agent; and in all
such cases such Warrant Certificates shall have the full force and effect
provided in the Warrant Certificates and in this Warrant Agreement.
Section 16. Warrant Agent. The Warrant Agent hereby certifies that it
complies with the requirements of the NASD National Market System governing
transfer agents and registrars, and further undertakes the duties and
obligations imposed by this Warrant Agreement upon the following terms and
conditions, by all of which the Company and the Warrant Holders, by their
acceptance thereof, shall be bound:
(1) The statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company, and the Warrant
Agent assumes no responsibility for the correctness of any of the same except
such as describe the Warrant Agent or action taken or to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of
the Warrant Certificates except as otherwise provided herein.
(2) The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the covenants contained in this
Warrant Agreement or in the Warrant Certificates to be complied with by the
Company; provided, however, that the Warrant Agent will be liable pursuant to
this Warrant Agreement for its own, its attorneys' or agents' negligence, bad
faith or willful misconduct.
<PAGE>
(3) The Warrant Agent shall incur no liability or
responsibility to the Company or to any Warrant Holder for any action taken in
reliance on any Warrant Certificate, certificate of shares, notice,
resolution, waiver, consent, order, certificate or other paper, document or
instrument reasonably and in good faith believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.
(4) The Warrant Agent need not investigate any fact or
matter stated in any of the foregoing and need not verify the accuracy of the
contents thereof or whether procedures specified by or pursuant to the
provisions of this Warrant Agreement have been followed.
(5) The Company agrees to pay to the Warrant Agent
reasonable compensation for all services rendered by the Warrant Agent in the
execution of this Warrant Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the execution of this Warrant
Agreement and to indemnify the Warrant Agent and save it harmless against all
liabilities, including judgments, costs and reasonable counsel fees, for
anything done or omitted by the Warrant Agent in the execution of this Warrant
Agreement except as a result of the Warrant Agent's or its attorneys' or
agents' direct or indirect negligence, bad faith or willful misconduct.
(6) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more registered Warrant
Holders shall furnish the Warrant Agent with reasonable security and indemnity
for any costs and expenses which may be incurred, but this provision shall not
affect the power of the Warrant Agent to take such action as it may consider
proper, whether with or without any such security or indemnity. All rights of
action under this Warrant Agreement or under any of the WRT Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other proceeding
relative thereto, and any such action, suit or proceeding instituted by the
Warrant Agent shall be brought in its name as Warrant Agent and any recovery
of judgment shall be for the ratable benefit of the registered Warrant
Holders, as their respective rights or interests may appear.
(7) The Warrant Agent, and any stockholder, director,
officer or employee of it, may buy, sell or deal in any of the WRT Warrants or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not the Warrant Agent under this Agreement. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for any
other legal entity.
(8) The Warrant Agent shall act hereunder solely as agent
for the Company, and its duties shall be determined solely by the provisions
hereof. The Company will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and
<PAGE>
other acts, instruments and assurances as may reasonably be required by the
Warrant Agent for the carrying out or performing by the Warrant Agent of the
provisions of this Warrant Agreement.
(9) The Warrant Agent shall not at any time be under any
duty or responsibility to any Warrant Holder to make or cause to be made any
adjustment of the number of the Warrant Shares or other securities or property
deliverable as provided in this Warrant Agreement, or to determine whether any
facts exist which may require any of such adjustments, or with respect to the
nature or extent of any such adjustments, when made, or with respect to the
method employed in making the same. The Warrant Agent shall not be
accountable with respect to the validity or value or the kind or amount of any
Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any WRT Warrant or with respect to
whether any such Warrant Shares or other securities will when issued be
validly issued, fully paid and nonassessable, and makes no representation with
respect thereto.
(10) The Warrant Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the President or any Vice President
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it will not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of
any such officer.
Section 17. Change of Warrant Agent. (a) The Warrant Agent may
-----------------------
at any time resign as such agent by giving three (3) months' prior written
notice to the Company, each Transfer Agent, if any, and to the Warrant
Holders, unless the Company agrees to accept less notice of such intention,
specifying the date on which its desired resignation shall become effective.
The Warrant Agent or its successors, if any, may be removed at any time, with
or without cause, upon thirty (30) calendar days' prior written notice by the
Company mailed to the Warrant Agent or its successor, as the case may be, and
to each Transfer Agent, if any, specifying such removal and the date when it
shall become effective. Any resignation or removal shall not take effect
until the appointment by the Company, as hereinafter provided, of a successor
Warrant Agent (which shall be a bank or trust company organized under the laws
of the United States or any state thereof and authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. The
obligations of the Company under this Warrant Agreement shall continue to the
extent set forth herein notwithstanding the resignation or removal of the
Warrant Agent.
(b) In case at any time the Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver or liquidator of the Warrant Agent or of
its property shall be appointed, or any public officer shall take charge or
control of the Warrant Agent or of its property or affairs for the purpose of
<PAGE>
rehabilitation, conservation or liquidation, a successor Warrant Agent,
qualified as aforesaid, shall be appointed by the Company by an instrument in
writing, filed with the successor Warrant Agent, and, upon acceptance by the
latter of such appointment, the Warrant Agent so succeeded shall cease to be
Warrant Agent hereunder.
(c) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without further act, deed or conveyance, shall become vested
with all the authority, rights, powers, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay
over, and such successor Warrant Agent shall be entitled to receive, all
monies, securities and other property on deposit with or held by such
predecessor as Warrant Agent hereunder.
(d) If the Company shall fail to make any appointment as
provided in this Section 17 within a period of 30 days, then any registered
Warrant Holder may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Pending appointment of a
successor Warrant Agent, either by the Company or by such a court, the duties
of the Warrant Agent shall be carried out by the Company.
Section 18. Notices to the Company and Warrant Agent. (a) Any
notice or demand authorized by this Warrant Agreement to be given or made by
the Warrant Agent or any registered Warrant Holder to or on the Company shall
be sufficiently given or made when and if deposited in the mail, first-class
or registered mail, postage prepaid, addressed (until another address is filed
in writing by the Company with the Warrant Agent), as follows:
WRT Energy Corporation
3303 FM 1960 West
Houston, Texas 77068
Attention: Mr. Gary C. Hanna
---------
With Copies To:
--------------
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Attention: Jeffrey S. Sabin, Esq.
(b) In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in
the location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.
<PAGE>
(c) Any notice pursuant to this Warrant Agreement to be given by
the Company or any registered Warrant Holder to the Warrant Agent shall be
sufficiently given when and if deposited in the mail, first-class or
registered mail, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as
follows:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Investment Management and
and Trust Services
(d) Any notice pursuant to this Warrant Agreement to be given by
the Company or the Warrant Agent to any Warrant Holder shall be sufficiently
given when and if deposited in the mail, first-class or registered mail,
postage prepaid, addressed to the Warrant Holder at the Warrant Holder's
address as it appears on the Warrant Register. The Company hereby irrevocably
authorizes the Warrant Agent, in the name and at the expense of the Company,
upon the written request of the Company, to mail any such notice to the
Warrant Holders upon receipt thereof from the Company. Any notice which is
mailed in the manner herein provided shall be presumed to have been duly given
and received when mailed, whether or not the Warrant Holder receives the
notice. Neither the failure to mail such notice nor any defect in any notice
so mailed to any particular Warrant Holder shall affect the sufficiency of
such notice with respect to any other Warrant Holder.
Section 19. Supplements, Amendments and Modifications. The
-----------------------------------------
Company and the Warrant Agent may from time to time supplement, amend or
modify this Warrant Agreement without the approval of or giving of any notice
to any Warrant Holder in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provision herein and which shall not in any way
adversely affect the interests of the Warrant Holders, or to make any other
provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not in any way adversely affect the interests of the Warrant Holders. The
Company and the Warrant Agent may from time to time supplement, amend or
modify this Warrant Agreement, with the consent of Warrant Holders of at least
50% of the WRT Warrants then outstanding, for any other for purpose; provided,
however, that the Company or the Warrant Agent, as the case may be, shall
provide three (3) months' prior written notice, in accordance with the
provisions of Section 18, of such intent to supplement, amend or modify this
Warrant Agreement. Any such supplement, amendment or modification effected
pursuant to and in accordance with the provisions of this Section 19 will be
binding upon all Warrant Holders and upon each future Warrant Holder, the
Company and the Warrant Agent. In the event of any such supplement, amendment
or modification, the Company will give prompt notice thereof to all Warrant
Holders and, if appropriate, notation thereof will be made on all Warrant
Certificates thereafter surrendered for registration of transfer or exchange.
<PAGE>
Section 20. Successors. All the covenants and provisions
----------
of this Warrant Agreement by or for the benefit of the Company, the Warrant
Agent or the Warrant Holders shall bind and inure to the benefit of their
respective successors and assigns hereunder; provided, however, that no
provision of this Warrant Agreement shall be assignable or delegable by either
the Company, the Warrant Agent or the Warrant Holders as the case may be,
without the prior written consent of the Company, the Warrant Agent or the
Warrant Holders, as the case may be, given upon their receipt of thirty (30)
calendar days' notice of the person or entity intending such assignment or
delegation, describing such intent. In the absence of such prior written
consent, any purported assignment or delegation of any right or obligation
hereunder will be null and void. For purposes of this Section 20, written
consent of Warrant Holders of at least 50% of the WRT Warrants then
outstanding, shall constitute the written consent of all of the Warrant
Holders. Notwithstanding the provisions of this Section 20, Warrant Holders
and their respective successors and assigns need not obtain the written
consent of the other Warrant Holders in order to effectuate a valid assignment
or delegation as provided herein.
Section 21. Termination. This Warrant Agreement shall terminate
-----------
after the Expiration Time. Notwithstanding the foregoing, this Warrant
Agreement will terminate on any earlier date if all WRT Warrants have been
exercised. The provisions of Section 16 shall survive such termination.
Section 22. Return of Unclaimed Cash or Property. Notwithstanding
------------------------------------
any provision of this Warrant Agreement, cash or other property (including,
without limitation, Warrant Shares) deposited with or paid to the Warrant
Agent for distribution or issuance to Warrant Holders, but remaining unclaimed
by the Warrant Holders for two years after the date upon which such Warrant
Holders became entitled to receive such cash or other property, as the case
may be, shall be repaid to the Company by the Warrant Agent on demand, and
when such repayment is made all liability of the Warrant Agent shall thereupon
cease with respect to such cash or property; and any Warrant Holder shall
thereafter look only to the Company for any payment or distribution which such
Warrant Holder may be entitled to collect; provided, however, that the Warrant
Agent, before being required to make any such repayment, may, at the expense
of the Company, cause to be published once, in a newspaper acceptable to the
Company, notice that such cash or property remains unclaimed and that, after a
date specified therein, which shall not be less than 30 calendar days from the
date of such publication, any unclaimed balance of such cash or property then
remaining will be repaid to the Company.
Section 23. Governing Law. THIS WARRANT AGREEMENT AND EACH
-------------
WARRANT CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE.
<PAGE>
Section 24. Benefits of this Warrant Agreement. This Warrant
----------------------------------
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent and the registered Warrant Holders. Nothing in this Warrant
Agreement shall be construed to give to any person or corporation other than
the Company, the Warrant Agent and the registered Warrant Holders any legal or
equitable right, remedy or claim under this Warrant Agreement.
Section 25. Agreement of Warrant Holders. Every Warrant Holder by accepting a
Warrant Certificate consents and agrees with the Company and the Warrant Agent
and with every other Warrant Holder that:
(1) The Warrant Certificates are transferable only in
accordance with the terms of this Warrant Agreement and only on the Warrant
Register of the Warrant Agent if surrendered at the principal office of the
Warrant Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer, and otherwise in compliance with Section 2;
(2) Such Warrant Holder expressly waives any right to
receive any fractional WRT Warrants and any fractional securities upon
exercise or exchange of a WRT Warrant; and
(3) Notwithstanding anything in this WRT Agreement to the
contrary, neither the Company nor the Warrant Agent will have any liability to
any Warrant Holder or other person as a result of its inability to perform any
of its obligations under this WRT Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, that the
Company will use reasonable efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 26. Titles and Headings. Titles and headings to Sections
-------------------
herein are inserted for convenience of reference only, and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.
Section 27. Certain Interpretive Matters. No provision of this
----------------------------
Warrant Agreement will be interpreted in favor of, or against, any party
hereto by reason of the extent to which such party or its counsel participated
in the drafting thereof or by reason of the extent to which any such provision
is inconsistent with any prior draft hereof or thereof.
Section 28. Entire Agreement. This Warrant Agreement and the
---------------
Plan, together with their Exhibits, constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof, and there are no
agreements among the parties hereto with respect thereto except as expressly
set forth herein or therein.
<PAGE>
Section 29. Severability. In case any provision contained in this
------------
Warrant Agreement is invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions will not in any way be affected
or impaired thereby. The Company and the Warrant Agent will endeavor in good
faith to replace the invalid, illegal or unenforceable provisions with valid,
legal and enforceable provisions the economic effect of which comes as close
as possible to that of the invalid, illegal or unenforceable provisions.
Section 30. Counterparts. This Warrant Agreement may be executed
------------
in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 31. Determinations of the Company's Board of Directors.
--------------------------------------------------
All determinations by the Company's Board of Directors provided for in this
Warrant Agreement shall be conclusive, final and binding absent manifest
error.
<PAGE>
Section 32. Glossary of Terms. The Following Capitalized terms
-----------------
are defined in the Sections referenced below:
Capitalized Term Section
---------------- -------
"Closing Price" 12(f)
"Company" Recitals
"Convertible Securities" 12(e)
"Current Market Price" 12(f)
"Exercise Price" 11
"Exercise Quantity" 11
"Expiration Time" 6(a)
"NASD" 2
"WRT Common Stock" Recitals
"WRT Warrants" Recitals
"Non-Surviving Combination" 12(k)(2)
"Plan" Recitals
"Subsidiary" 12(c)
"Transfer Agent" 6(d)
"Warrant Agent" Recitals
"Warrant Agreement" Recitals
"Warrant Amount" Recitals
"Warrant Certificates" 2
"Warrant Holder" 4(a)
"Warrant Register" 4(a)
"Warrant Shares" Recitals
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed, as of the day and year first above written.
WRT ENERGY CORPORATION
By:
-----------------------
Title:
--------------------
{SEAL}
Attest:
--------------------
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By:
-----------------------
Title:
--------------------
{SEAL}
Attest:
<PAGE>
EXHIBIT A
{Form of Warrant Certificate}
WARRANTS TO ACQUIRE NEW WRT COMMON STOCK
PAR VALUE $0.01 PER SHARE OF WRT ENERGY CORPORATION
EXERCISABLE ON OR AFTER JULY 11, 1997 THROUGH JULY 10, 2002
NO.
--------
This Warrant Certificate certifies that , or
------------------------
registered assigns, is the registered holder of WRT Warrants (the
------------
"WRT Warrants") expiring at 5:00 P.M., New York City time, on July 10, 2002
or, if such date is not a business day, the next succeeding business day (the
"Expiration Time") to purchase WRT Common Stock, par value $0.01 per share
(the "WRT Common Stock"), of WRT Energy Corporation, a Delaware corporation
(the "Company"). The WRT Common Stock issuable upon exercise of WRT Warrants
is hereinafter referred to as the "Warrant Shares". Subject to the
immediately succeeding paragraph, each WRT Warrant entitles the holder upon
exercise to purchase from the Company on or before the Expiration Time one (1)
fully paid and nonassessable share of WRT Common Stock per WRT Warrant (the
"Exercise Quantity") at an initial exercise price equal to Ten Dollars
($10.00) payable per Warrant Share (the "Exercise Price"). Such purchase
shall be payable in lawful money of the United States of America in cash or by
certified or official bank check to the order of the Warrant Agent at the
office or agency of the Warrant Agent, but only subject to the conditions set
forth herein and in the Warrant Agreement referred to on the reverse side
hereof. The Exercise Quantity and the Exercise Price are subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement. Upon determination of the adjusted Exercise Quantity, the Company
shall cause to be given to each of the registered holders of the Warrant
Certificates at his address appearing on the Warrant Register, written notice
of such determination by first-class mail, postage prepaid. Terms used herein
but not otherwise defined shall have the meanings set forth in the Warrant
Agreement.
No WRT Warrant may be exercised before 9:00 A.M., New York City
time, on July 11, 1997 or after the Expiration Time and to the extent not
exercised by such time such WRT Warrants remaining shall become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.
<PAGE>
THIS WARRANT CERTIFICATE SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be signed by its two of its officers thereunto authorized and has caused
its corporate seal to be affixed hereunto or imprinted hereon.
Dated: , 1997 WRT ENERGY CORPORATION
------------------
By:
--------------------------
Name:
Title:
Countersigned:
- -------------------------------
as Warrant Agent
By:
---------------------------------------
Authorized Signature
<PAGE>
{Form of Warrant Certificate}
{Reverse}
The WRT Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of up to [___________] WRT Warrants expiring at 5:00
P.M., New York City time, on July 10, 2002 or, if such date is not a business
day, the next succeeding business day (the "Expiration Time"), entitling the
holder on exercise to purchase shares of WRT Common Stock, par value $0.01 per
share of the Company (the "WRT Common Stock"), and are issued or to be issued
pursuant to a Warrant Agreement dated as of July 10, 1997 (the "Warrant
Agreement"), duly executed and delivered by the Company to American Stock
transfer & Trust Company, a New York corporation, as warrant agent (the
"Warrant Agent"), which Warrant Agreement is hereby incorporated by reference
in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Warrant Agent, the Company and the Warrant
Holders (the words "Warrant Holders" or "Warrant Holder" meaning the
registered holders or registered holder) of the WRT Warrants. A copy of the
Warrant Agreement may be obtained by the Warrant Holder hereof upon written
request to the Company.
WRT Warrants may be exercised at any time on and after 9:00 A.M.,
New York City time, on July 11, 1997 and on or before the Expiration Time.
The Warrant Holder of WRT Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed,
together with payment of the Exercise Price in cash or by certified or
official bank check to the order of the Warrant Agent and the other required
documentation. In the event that upon any exercise of WRT Warrants evidenced
hereby the number of WRT Warrants exercised shall be less than the total
number of WRT Warrants evidenced hereby, there shall be issued to the Warrant
Holder hereof or his assignee a new Warrant Certificate evidencing the number
of WRT Warrants not exercised. No adjustment shall be made for any dividends
on any WRT Common Stock issuable upon exercise of this WRT Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Quantity and the Exercise Price set forth on the face
hereof may, subject to certain conditions, be adjusted. No fractions of a
share of WRT Common Stock will be issued upon the exercise of any WRT Warrant,
but the Company will pay the cash value thereof determined as provided in the
Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered Warrant Holder thereof in person or by legal
representative or attorney duly authorized in writing, may be exchanged, in
the manner and subject to the limitations provided in the Warrant Agreement,
but without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number
of WRT Warrants.
<PAGE>
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of WRT Warrants shall be issued to the transferee in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To Be Executed Upon Exercise of WRT Warrants)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive ______ shares of WRT
Common Stock and herewith tenders payment for such shares to the order of
__________________________ in the amount of $ in cash or by
certified or official bank check in accordance with the terms hereof. The
undersigned requests that a certificate for such shares be registered in the
name of ___________________________, whose address is ______________________
and that such shares be delivered to ___________________________, whose
address is ____________________________.
Please insert social security or other identifying number: ___________________
If said number of shares is less than all of the shares of WRT Common Stock
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of
____________________________, whose address is _________________________, and
that such Warrant Certificate be delivered to ______________________________,
whose address is _____________________________.
Please insert social security or other identifying number: ___________________
Dated: _________ ___
Signature: ________________________
Note: The above signature must
correspond with the name as written
upon the face of this Warrant
Certificate in every particular,
without alteration or enlargement
or any change whatever.
Signature Guaranteed By:
____________________________________
Note: Signatures must be guaranteed
by an eligible guarantor institution
(a bank, stockbroker, savings and
loan association or credit union
with membership in an approved
signature guarantee medallion
program) pursuant to Rule 17A-d-15
of the Exchange Act
<PAGE>
FORM OF ASSIGNMENT
(To Be Executed Upon Assignment of the WRT Warrants)
For value received _________________________________________________
hereby sells, assigns and transfers unto _____________________________________
the WRT Warrants represented by this Warrant Certificate, together with all
right, title and interest therein, and do hereby irrevocably constitute and
appoint _____________________________________________________________________,
attorney, to transfer this Warrant Certificate on the books of the Company,
with full power of substitution.
Dated: _____________ ___
Signature: _________________________
Note: The above signature must
correspond with the name as written
upon the face of this Warrant
Certificate in every particular,
without alteration or enlargement or
any change whatever.
Signature Guaranteed By:
_____________________________________
Note: Signatures must be guaranteed
by an eligible guarantor institution
(a bank, stockbroker, savings and
loan association or credit union with
membership in an approved signature
guarantee medallion program) pursuant
to Rule 17A-d-15 of the Exchange Act
<PAGE>
Exhibit G
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
by and among
WRT ENERGY CORPORATION,
DLB OIL & GAS, INC.
and
WEXFORD MANAGEMENT LLC
Dated as of July 10, 1997
<PAGE>
TABLE OF CONTENTS
Page
1. DEFINITIONS.....................................................
2. REGISTRATION UNDER THE SECURITIES ACT...........................
2.1 DEMAND REGISTRATION........................................
2.2 INCIDENTAL REGISTRATION....................................
2.3 SHELF REGISTRATION.........................................
2.4 EXPENSES...................................................
2.5 UNDERWRITTEN OFFERINGS.....................................
2.6 POSTPONEMENTS..............................................
3. HOLDBACK ARRANGEMENTS...........................................
3.1 RESTRICTIONS ON SALE BY HOLDERS............................
3.2 RESTRICTIONS ON SALE BY THE COMPANY AND OTHERS.............
4. REGISTRATION PROCEDURES.........................................
4.1 OBLIGATIONS OF THE COMPANY.................................
4.2 SELLER INFORMATION.........................................
4.3 NOTICE TO DISCONTINUE......................................
5. INDEMNIFICATION; CONTRIBUTION...................................
5.1 INDEMNIFICATION BY THE COMPANY.............................
5.2 INDEMNIFICATION BY HOLDERS.................................
5.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS.....................
5.4 CONTRIBUTION...............................................
5.5 OTHER INDEMNIFICATION......................................
5.6 INDEMNIFICATION PAYMENTS...................................
6. GENERAL.........................................................
6.1 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES...............
6.2 REGISTRATION RIGHTS TO OTHERS..............................
6.3 AMENDMENTS AND WAIVERS.....................................
6.4 NOTICES....................................................
6.5 SUCCESSORS AND ASSIGNS.....................................
6.6 COUNTERPARTS...............................................
6.7 DESCRIPTIVE HEADINGS, ETC..................................
6.8 SEVERABILITY...............................................
6.9 GOVERNING LAW..............................................
6.10 REMEDIES; SPECIFIC PERFORMANCE............................
6.11 ENTIRE AGREEMENT..........................................
6.12 NOMINEES FOR BENEFICIAL OWNERS............................
6.13 CONSENT TO JURISDICTION...................................
6.14 FURTHER ASSURANCES........................................
6.15 NO INCONSISTENT AGREEMENTS................................
6.16 CONSTRUCTION..............................................
REGISTRATION RIGHTS AGREEMENT (this or the "Agreement") dated as of
July 10, 1997, by and among WRT Energy Corporation, a Delaware corporation
(the "Company"), DLB Oil & Gas, Inc., an Oklahoma corporation ("DLB"), and
Wexford Management LLC, a Delaware limited liability company, on behalf of its
affiliated investment funds ("Wexford").
W I T N E S S E T H :
WHEREAS, the predecessor to the Company has emerged from bankruptcy
pursuant to Chapter 11 of the United States Bankruptcy Code;
WHEREAS, pursuant to the Debtor's and DLBW's First Amended Joint
Plan of Reorganization Under Chapter 11 of the United States Bankruptcy Code
(the "Reorganization Plan"), DLB and Wexford were issued and acquired certain
securities of the Company;
WHEREAS, the Company has entered into (i) a Commitment Agreement,
dated as of January 20, 1997, by and among the Company, DLB and Wexford (the
"Commitment Agreement") and (ii) a Subscription Rights Agreement, dated as of
May 5, 1997, by and between the Company and the Disbursing Agent (as therein
defined) (the "Subscription Agreement"), pursuant to which the Company issued
and DLB and Wexford acquired those certain securities of the Company; and
WHEREAS, in order to induce DLB and Wexford to enter into the
Commitment Agreement and to participate in the Subscription Agreement, the
Company agreed to provide certain registration rights on the terms and subject
to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:
"Affiliate" shall mean (i) with respect to any Person, any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person and (ii) with respect to
any individual, shall also mean the spouse, sibling, child, step-child,
grandchild, niece, nephew or parent of such Person, or the spouse thereof.
"Agents" shall have the meaning set forth in Section 5.1.
"Agreement" shall have the meaning set forth in the preamble.
"Blackout Notice" shall have the meaning set forth in Section
2.6.
"Blackout Period" shall have the meaning set forth in Section
2.6.
<PAGE>
"Claims" shall have the meaning set forth in Section 5.1.
"Commitment Agreement" shall have the meaning set forth in the
preamble.
"Common Shares" shall mean shares of common stock, par value
$0.01 per share, of the Company.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors.
"Demand Registration" shall mean a registration required to be
effected by the Company, pursuant to Section 2.1.
"DLB" shall have the meaning set forth in the preamble.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time, and the rules and regulations thereunder, or any
similar or successor statute.
"Holders" shall mean each of DLB and Wexford for so long as
either of them owns any Registrable Securities and such of their respective
heirs, successors and permitted assigns who acquire Registrable Securities,
directly or indirectly, from either DLB or Wexford (or any subsequent Holder),
for so long as such heirs, successors and permitted assigns own any
Registrable Securities.
"Holders' Counsel" shall mean, for purposes of this Agreement,
one firm of counsel (per registration) to the Holders participating in such
registration, which counsel shall be selected (i) in the case of a Demand
Registration, by the Initiating Holder and (ii) in all other cases, by the
Holders of a majority of the Registrable Securities requested to be included
in an Incidental Registration.
"Holders of the Registration" shall mean, with respect to a
particular registration, one or more Holders who would hold the Registrable
Securities to be included in such registration.
"Incidental Registration" shall mean a registration required to be effected by
the Company pursuant to Section 2.2.
"Initiating Holder" shall mean, with respect to a particular
registration, the Holder who initiated the Request for such registration.
"Inspectors" shall have the meaning set forth in Section
4.1(g).
"NASD" shall mean the National Association of Securities
Dealers, Inc.
<PAGE>
"Person" shall mean any individual, firm, partnership,
corporation, trust, joint venture, association, joint stock company, limited
liability company, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision
thereof, and shall include any successor (by merger or otherwise) of such
entity.
"Prospectus" shall mean the prospectus included in a
Registration Statement (including, without limitation, any preliminary
prospectus and any prospectus that includes any information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A promulgated under the Securities Act), and any such
Prospectus as amended or supplemented by any prospectus supplement, and all
other amendments and supplements to such Prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
(or deemed to be incorporated by reference) therein.
"Records" shall have the meaning set forth in Section 4.1(g).
"Registrable Securities" shall mean (i) any Common Shares
issued and delivered to the Holders pursuant to the Reorganization Plan, the
Commitment Agreement and the Subscription Agreement; (ii) any Common Shares
otherwise or hereafter purchased or acquired by the Holders or their
Affiliates and (iii) any other securities of the Company (or any successor or
assign of the Company, whether by merger, consolidation, sale of assets or
otherwise) which may be issued or issuable to the Holders with respect to, in
exchange for, or in substitution of, Registrable Securities referenced in
clauses (i) and (ii) above by reason of any dividend or stock split,
combination of shares, merger, consolidation, recapitalization,
reclassification, reorganization, sale of assets or similar transaction. As
to any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (A) a registration statement with respect to the
sale of such securities shall have been declared effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (B) such securities are sold pursuant to
Rule 144 (or any similar provisions then in force) under the Securities Act,
(C) such securities have been otherwise transferred, a new certificate or
other evidence of ownership for them not bearing the legend restricting
further transfer shall have been delivered by the Company and subsequent
public distribution of them shall not require registration under the
Securities Act, or (D) such securities shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with this Agreement by the Company
and its subsidiaries, including, without limitation (i) all SEC, stock
exchange, NASD and other registration, listing and filing fees, (ii) all fees
and expenses incurred in connection with compliance with state securities or
blue sky laws and compliance with the rules of any stock exchange (including
fees and disbursements of counsel in connection with such compliance and the
<PAGE>
preparation of a blue sky memorandum and legal investment survey), (iii) all
expenses of any Persons in preparing or assisting in preparing, word
processing, printing, distributing, mailing and delivering any Registration
Statement, any Prospectus, any underwriting agreements, transmittal letters,
securities sales agreements, securities certificates and other documents
relating to the performance of or compliance with this Agreement, (iv) the
fees and disbursements of counsel for the Company, (v) the fees and
disbursements of Holders' Counsel, (vi) the fees and disbursements of all
independent public accountants (including the expenses of any audit and/or
"cold comfort" letters) and the fees and expenses of other Persons, including
experts, retained by the Company, (vii) the expenses incurred in connection
with making road show presentations and holding meetings with potential
investors to facilitate the distribution and sale of Registrable Securities
which are customarily borne by the issuer, (viii) any fees and disbursements
of underwriters customarily paid by issuers or sellers of securities, (ix)
premiums and other costs of policies of insurance against liabilities arising
out of the public offering of the Registrable Securities being registered and
(x) all internal expenses of the Company (including all salaries and expenses
of officers and employees performing legal or accounting duties); provided,
however, Registration Expenses shall not include discounts and commissions
payable to underwriters, selling brokers, dealer managers or other similar
Persons engaged in the distribution of any of the Registrable Securities; and
provided, further, that in any case where Registration Expenses are not to be
borne by the Company, such expenses shall not include salaries of Company
personnel or general overhead expenses of the Company, auditing fees, premiums
or other expenses relating to liability insurance required by underwriters of
the Company or other expenses for the preparation of financial statements or
other data normally prepared by the Company in the ordinary course of its
business or which the Company would have incurred in any event; and provided,
further, that in the event the Company shall, in accordance with Section 2.2
or Section 2.6 hereof, not register any securities with respect to which it
had given written notice of its intention to register to Holders,
notwithstanding anything to the contrary in the foregoing, all of the costs
incurred by the Holders in connection with such registration shall be deemed
to be Registration Expenses.
"Registration Statement" shall mean a registration statement of
the Company which covers any Registrable Securities requested to be included
therein pursuant to the provisions of this Agreement on an appropriate form
and in accordance with the Securities Act and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference (or deemed to be incorporated by reference)
therein.
"Reorganization Plan" shall have the meaning set forth in the
preamble.
<PAGE>
"Request" shall have the meaning set forth in Section 2.1(a).
"SEC" shall mean the Securities and Exchange Commission, or any
successor agency having jurisdiction to enforce the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time, and the rules and regulations thereunder, or any
similar or successor statute.
"Shelf Registration" shall have the meaning set forth in
Section 2.1(a).
"Subscription Agreement" shall have the meaning set forth in
the preamble.
"Underwriters" shall mean the underwriters, if any, of the
offering being registered under the Securities Act.
"Underwritten Offering" shall mean a sale of securities of the
Company to an Underwriter or Underwriters for reoffering to the public.
"Wexford" shall have the meaning set forth in the preamble.
"Withdrawn Demand Registration" shall have the meaning set
forth in Section 2.1(a).
"Withdrawn Request" shall have the meaning set forth in Section
2.1(a).
2. REGISTRATION UNDER THE SECURITIES ACT
2.1 Demand Registration.
(a) Right to Demand Registration. (i) At any time or from time to
time the Holders holding at least 20% of the Registrable Securities shall have
the right to request in writing (a "Request") that the Company register all or
part of such Holder's Registrable Securities by filing with the SEC a
Registration Statement.
(ii) The Request shall specify the amount of Registrable Securities
intended to be disposed of by each such Holder and the intended method of
disposition thereof.
(iii) As promptly as practicable, but no later than ten (10) days
after receipt of a Request, the Company shall give written notice of such
requested registration to all Holders.
<PAGE>
(iv) Subject to Section 2.1(b), the Company shall include in a
Demand Registration (A) the Registrable Securities intended to be disposed of
by the Initiating Holder and (B) the Registrable Securities intended to be
disposed of by any other Holder, if any, which shall have made a written
request (which request shall specify the amount of Registrable Securities to
be registered and the intended method of disposition thereof) to the Company
for inclusion thereof in such registration within twenty (20) days after the
receipt of such written notice from the Company.
(v) The Company shall, as expeditiously as possible following a
Request, use its best efforts to cause to be filed with the SEC a Registration
Statement providing for the registration under the Securities Act of the
Registrable Securities which the Company has been so requested to register by
all such Holders, to the extent necessary to permit the disposition of such
Registrable Securities so to be registered in accordance with the intended
methods of disposition thereof specified in such Request or further requests
(including, without limitation, by means of a shelf registration pursuant to
Rule 415 under the Securities Act (a "Shelf Registration") if so requested and
if the Company is then eligible to use such a registration). The Company
shall use its best efforts to have such Registration Statement declared
effective by the SEC as soon as practicable thereafter and to keep such
Registration Statement continuously effective for the period specified in
Section 4.1(b).
(vi) A Request may be withdrawn prior to the filing of the
Registration Statement by the Holders of the Registration (a "Withdrawn
Request") and a Registration Statement may be withdrawn prior to the
effectiveness thereof by the Holders of the Registration (a "Withdrawn Demand
Registration"). The registration rights granted pursuant to the provisions of
this Section 2.1 shall be in addition to the registration rights granted
pursuant to the other provisions of this Section 2.
(b) Priority in Demand Registrations. If a Demand Registration
involves an Underwritten Offering, and the sole or lead managing Underwriter,
as the case may be, of such Underwritten Offering shall advise the Company in
writing (with a copy to each Holder requesting registration) on or before the
date five days prior to the date then scheduled for such offering that, in its
opinion, the amount of Registrable Securities requested to be included in such
Demand Registration exceeds the number which can be sold in such offering
within a price range acceptable to the Holders of the Registration (such
writing to state the basis of such opinion and the approximate number of
Registrable Securities which may be included in such offering), the Company
shall include in such Demand Registration, to the extent of the number which
the Company is so advised may be included in such offering, the Registrable
Securities requested to be included in the Demand Registration by the Holders
allocated pro rata in proportion to the number of Registrable Securities
requested to be included in such Demand Registration by each of them. In the
event the Company shall not, by virtue of this Section 2.1(b), include in any
<PAGE>
Demand Registration all of the Registrable Securities of any Holder requesting
to be included in such Demand Registration, such Holder may, upon written
notice to the Company given within five days of the time such Holder first is
notified of such matter, reduce the amount of Registrable Securities it
desires to have included in such Demand Registration, whereupon only the
Registrable Securities, if any, it desires to have included will be so
included and the Holder not so reducing shall be entitled to a corresponding
increase in the amount of Registrable Securities to be included in such Demand
Registration.
(c) Underwriting; Selection of Underwriters. (i) If the
Initiating Holder so elects, the offering of Registrable Securities pursuant
to a Demand Registration shall be in the form of a firm commitment
Underwritten Offering; and such Initiating Holder may require that the other
Holders, if any, participating in such registration sell its Registrable
Securities to the Underwriters at the same price and on the same terms of
underwriting applicable to the Initiating Holder.
(ii) If any Demand Registration involves an Underwritten Offering,
the sole or managing Underwriters and any additional investment bankers and
managers to be used in connection with such registration shall be selected by
the Initiating Holder, subject to the approval of the Company (such approval
not to be unreasonably withheld).
(d) Registration of Other Securities. Whenever the Company shall
effect a Demand Registration, no securities other than the Registrable
Securities shall be covered by the related registration or offering unless the
Holders of a majority of the Registrable Securities requested to be included
in such Demand Registration shall have consented in writing to the inclusion
of such other securities.
(e) Other Registrations. During the period (i) beginning on the
date of a Request and (ii) ending on the date that is 90 days after the date
that a Registration Statement filed pursuant to such Request has been declared
effective by the SEC or, if the Holders shall withdraw such Request or such
Registration Statement, on the date of such Withdrawn Request or such
Withdrawn Registration Statement, the Company shall not, without the consent
of the Holders of a majority of the Registrable Securities requested to be
included in such Demand Registration, file a registration statement pertaining
to any other securities of the Company.
(f) Registration Statement Form. Registrations under this Section
2.1 shall be on such appropriate registration form of the SEC (i) as shall be
selected by the Initiating Holder, and (ii) which shall be available for the
sale of Registrable Securities in accordance with the intended method or
methods of disposition specified in the requests for registration.
<PAGE>
2.2 Incidental Registration
(a) Right to Include Registrable Securities. (i) If the Company
at any time or from time to time proposes to register any of its securities
under the Securities Act (other than in a registration on Forms S-4 or S-8 or
any successor form to such forms) whether or not pursuant to registration
rights granted to other holders of its securities and whether or not for sale
for its own account (and other than pursuant to Section 2.1), the Company
shall deliver prompt written notice (which notice shall be given at least
thirty (30) days prior to such proposed registration) to the Holders of its
intention to undertake such registration, describing in reasonable detail the
proposed registration and distribution (including the anticipated range of the
proposed offering price, the class and number of securities proposed to be
registered and the distribution arrangements) and of the Holders' right to
participate in such registration under this Section 2.2 as hereinafter
provided.
(ii) Subject to the other provisions of this Section 2.2(a) and
Section 2.2(b), upon the written request of any Holder (which request shall
specify the amount of Registrable Securities to be registered and the intended
method of disposition thereof) made within twenty (20) days after the receipt
of such written notice, the Company shall include in such registration all
Registrable Securities requested by any Holder to be so registered (an
"Incidental Registration"), to the extent requisite to permit the disposition
(in accordance with the intended distribution arrangements thereof as
aforesaid) of the Registrable Securities so to be registered, by inclusion of
such Registrable Securities in the Registration Statement which covers the
securities which the Company proposes to register and shall use its best
efforts cause such Registration Statement to become and remain effective with
respect to such Registrable Securities in accordance with the registration
procedures set forth in Section 4.
(iii) If an Incidental Registration involves an Underwritten
Offering, immediately upon notification to the Company from the Underwriter of
the price at which such securities are to be sold, the Company shall so advise
each participating Holder.
(iv) The Holders requesting inclusion in an Incidental Registration
may, at any time prior to the effective date of the Registration Statement
(and for any reason), revoke such request by delivering written notice to the
Company revoking such requested inclusion.
(v) If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Registration
Statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to the Holders and, thereupon, (A) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration
(but not from its obligation to pay the Registration Expenses incurred in
<PAGE>
connection therewith), without prejudice, however, to the rights of Holders to
cause such registration to be effected as a registration under Section 2.1 and
(B) in the case of a determination to delay such registration, the Company
shall be permitted to delay the registration of such Registrable Securities
for the same period as the delay in registering such other securities;
provided, however, that if such delay shall extend beyond one hundred and
twenty (120) days from the date the Company received a request to include
Registrable Securities in such Incidental Registration, then the Company shall
again give all Holders the opportunity to participate therein and shall follow
the notification procedures set forth in the preceding paragraph.
(vi) There is no limitation on the number of such Incidental
Registrations pursuant to this Section 2.2 which the Company is obligated to
effect.
(vii) The registration rights granted pursuant to the provisions of
this Section 2.2 shall be in addition to the registration rights granted
pursuant to the other provisions of this Section 2.
(b) Priority in Incidental Registration. If an Incidental
Registration involves an Underwritten Offering on a firm commitment basis, and
the sole or the lead managing Underwriter, as the case may be, of such
Underwritten Offering shall advise the Company in writing (with a copy to each
Holder requesting registration) on or before the date five days prior to the
date then scheduled for such offering that, in its opinion, the amount of
securities (including Registrable Securities) requested to be included in such
registration exceeds the amount which can be sold in such offering without
materially interfering with the successful marketing of the securities being
offered (such writing to state the basis of such opinion and the approximate
number of such securities which may be included in such offering without such
effect), the Company shall include in such registration, to the extent of the
number which the Company is so advised may be included in such offering
without such effect, (i) in the case of a registration initiated by the
Company, (A) first, the securities that the Company proposes to register for
its own account (but solely to the extent that the proceeds thereof shall not
be used to purchase Common Shares or other securities of the Company), (B)
second, the Registrable Securities requested to be included in such
registration by the Holders, allocated pro rata in proportion to the number of
Registrable Securities requested to be included in such registration by each
of them and (C) third, other securities of the Company to be registered on
behalf of any other Person and (ii) in the case of a registration initiated by
a Person other than the Company, (A) first, the securities requested to be
included in such registration by the Persons initiating such registration,
allocated pro rata in proportion to the number of securities requested to be
included in such registration by each of them and (B) second, the Registrable
Securities that the Holders propose to register, allocated pro rata in
proportion to the number of securities requested to be included in such
registration by each of them, (C) third, the securities that the Company
proposes to register for its own account; and (D) fourth, other securities of
the Company to be registered on behalf of any other Person; provided, however,
that in the event the Company will not, by virtue of this Section 2.2(b),
<PAGE>
include in any such registration all of the Registrable Securities of any
Holder requested to be included in such registration, such Holder may, upon
written notice to the Company given within three days of the time such Holder
first is notified of such matter, reduce the amount of Registrable Securities
it desires to have included in such registration, whereupon only the
Registrable Securities, if any, it desires to have included will be so
included and any other Holder shall be entitled to a corresponding increase in
the amount of Registrable Securities to be included in such registration on
the same terms as set forth above.
2.3 Shelf Registration. If a request made pursuant to Section 2.1 is
for a Shelf Registration, the Company shall use its best efforts to keep the
Shelf Registration continuously effective through the date on which all of the
Registrable Securities covered by such Shelf Registration may be sold pursuant
to Rule 144(k) under the Securities Act (or any successor provision having
similar effect); provided, however, that prior to the termination of such
Shelf Registration, the Company shall first furnish to each Holder
participating in such Shelf Registration (i) an opinion, in form and substance
satisfactory to the Holders of the Registration, of counsel for the Company
satisfactory to the Holders of the Registration stating that such Registrable
Securities are freely salable pursuant to Rule 144(k) under the Securities Act
(or any successor provision having similar effect) or (ii) a letter from the
staff of the SEC stating that the SEC would not recommend enforcement action
if the Registrable Securities included in such Shelf Registration were sold in
a public sale other than pursuant to an effective registration statement.
2.4 Expenses. The Company shall pay all Registration Expenses in
connection with any Demand Registration, Incidental Registration or Shelf
Registration, whether or not such registration shall become effective and
whether or not all Registrable Securities originally requested to be included
in such registration are withdrawn or otherwise ultimately not included in
such registration. Each Holder shall pay all discounts and commissions
payable to underwriters, selling brokers, managers or other similar Persons
engaged in the distribution of such Holder's Registrable Securities pursuant
to any registration pursuant to this Section 2.
2.5 Underwritten Offerings.
(a) Demand Underwritten Offerings. If requested by the sole or
lead managing Underwriter for any Underwritten Offering effected pursuant to a
Demand Registration, the Company shall enter into a customary underwriting
agreement with the Underwriters for such offering, such agreement to be
reasonably satisfactory in substance and form to each Holder participating in
such offering and to contain such representations and warranties by the
Company and such other terms as are generally prevailing in agreements of that
type, including, without limitation, indemnification and contribution to the
effect and to the extent provided in Section 5.
<PAGE>
(b) Holders to be Parties to Underwriting Agreement. The Holders
of such Registrable Securities to be distributed by Underwriters in an
Underwritten Offering contemplated by Section 2 shall be parties to the
underwriting agreement between the Company and such Underwriters and may, at
such Holders' option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such Underwriters shall also be made to and for the benefit of
such Holders and that any or all of the conditions precedent to the
obligations of such Underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holders; provided, however,
that the Company shall not be required to make any representations or
warranties with respect to written information specifically provided by a
selling Holder for inclusion in the Registration Statement.
(c) Underwritten Registration. Notwithstanding anything herein to
the contrary, no Holder may participate in any underwritten registration
hereunder unless such Holder (i) agrees to sell its securities on the same
terms and conditions provided in any underwritten arrangements approved by the
Persons entitled hereunder to approve such arrangement and (ii) accurately
completes and executes in a timely manner all questionnaires, powers of
attorney, indemnities, custody agreements, underwriting agreements and other
documents reasonably required under the terms of such underwriting
arrangements.
2.6 Postponements. (a) The Company shall be entitled to postpone
a Demand Registration and to require the Holders of Registrable Securities to
discontinue the disposition of their securities covered by a Shelf
Registration during any Blackout Period (as defined below) (i) if the Board of
Directors of the Company determines in good faith that effecting such a
registration or continuing such disposition at such time would have a material
adverse effect upon a proposed sale of all (or substantially all) of the
assets of the Company or a merger, reorganization, recapitalization or similar
current transaction materially affecting the capital structure or equity
ownership of the Company, (ii) if the Company is in possession of material
information which the Board of Directors of the Company determines in good
faith is not in the best interests of the Company to disclose in a
registration statement at such time or (iii) if the Company has delivered a
notice pursuant to Section 2.2 that it is undertaking an underwritten offering
in which the Holders will be entitled to exercise their incidental
registration rights; provided, however, that the Company may only delay a
Demand Registration and require the Holders to discontinue the disposition of
their securities covered by a Shelf Registration pursuant to this Section 2.6
for a reasonable period of time not to exceed 180 days (or such earlier time
as such transaction is consummated or no longer proposed or the material
information has been made public) (the "Blackout Period").
<PAGE>
(b) There shall not be more than one Blackout Period in any 12-
month period.
(c) The Company shall promptly notify the Holders in writing (a
"Blackout Notice") of any decision to postpone a Demand Registration or to
discontinue sales of Registrable Securities covered by a Shelf Registration
pursuant to this Section 2.6 and shall include a general statement of the
reason for such postponement, an approximation of the anticipated delay and an
undertaking by the Company promptly to notify the Holders as soon as a Demand
Registration may be effected or sales of Registrable Securities covered by a
Shelf Registration may resume.
(d) In making any determination to initiate or terminate a Blackout
Period, the Company shall not be required to consult with or obtain the
consent of any Holder, and any such determination shall be the Company's sole
responsibility.
(e) Each Holder shall treat all notices received from the Company
pursuant to this Section 2.6 in the strictest confidence and shall not
disseminate such information.
(f) If the Company shall postpone the filing of a Registration
Statement, the Holders who were to participate therein shall have the right to
withdraw the request for registration. Any such withdrawal shall be made by
giving written notice to the Company within thirty (30) days after the
Blackout Notice.
(g) If a Blackout Notice is made, the Blackout Period so initiated
shall be in effect, even if the request for registration is subsequently
withdrawn by the Holders.
2.7 Inclusion of Information. The Company agrees to include in any
Registration Statement under this Agreement all information which any selling
Holder, upon advice of counsel, shall reasonably request.
3. HOLDBACK ARRANGEMENTS
3.1 Restrictions on Sale by Holders. Each Holder agrees, by
acquisition of such Registrable Securities, if timely requested in writing by
the sole or lead managing Underwriter in an Underwritten Offering of any
Registrable Securities, not to effect any public sale or distribution,
including a sale pursuant to Rule 144 (or any successor provision having
similar effect) under the Securities Act of any Registrable Securities or any
other equity security of the Company (or any security convertible into or
exchangeable or exercisable for any equity security of the Company) (except as
part of such underwritten registration), during the nine business days (as
such term is used in Rule 10b-6 under the Exchange Act) prior to, and during
the time period reasonably requested by the sole or lead managing Underwriter
not to exceed 180 days, beginning on the effective date of the applicable
Registration Statement.
<PAGE>
3.2 Restrictions on Sale by the Company and Others. The Company
agrees (i) if timely requested in writing by the sole or lead managing
Underwriter in an Underwritten Offering of any Registrable Securities, not to
effect any public sale or distribution of any of the Company's equity
securities (or any security convertible into or exchangeable or exercisable
for any of the Company's equity securities) during the nine business days (as
such term is used in Rule 10b-6 under the Exchange Act) prior to, and during
the time period reasonably requested by the sole or lead managing Underwriter
not to exceed 180 days, beginning on the effective date of the applicable
Registration Statement (except as part of such underwritten registration or
pursuant to registrations on Forms S-4 or S-8 or any successor form to such
forms) and (ii) it will cause each of its directors, officers and holders of
five percent (5%) or more of its Common Shares purchased from the Company at
any time after the date of this Agreement (other than in a registered public
offering) to so agree.
4. REGISTRATION PROCEDURES
4.1 Obligations of the Company. Whenever the Company is required
to effect the registration of Registrable Securities under the Securities Act
pursuant to Section 2 of this Agreement, the Company shall, as expeditiously
as possible:
(a) prepare and file with the SEC (promptly, and in any event
within ninety (90) days after receipt of a request to register Registrable
Securities pursuant to a Registration Statement) the requisite Registration
Statement to effect such registration, which Registration Statement shall
comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to be
filed therewith, and the Company shall use its best efforts to cause such
Registration Statement to become effective (provided, that the Company may
discontinue any registration of its securities that are not Registrable
Securities, and, under the circumstances specified in Section 2.2, its
securities that are Registrable Securities); provided, however, that before
filing a Registration Statement or Prospectus or any amendments or supplements
thereto, or comparable statements under securities or blue sky laws of any
jurisdiction, the Company shall (i) provide Holders' Counsel and any other
Inspector with an adequate and appropriate opportunity to participate in the
preparation of such Registration Statement and each Prospectus included
therein (and each amendment or supplement thereto or comparable statement) to
be filed with the SEC, which documents shall be subject to the review and
comment of Holders' Counsel, (ii) not file any such Registration Statement or
Prospectus (or amendment or supplement thereto or comparable statement) with
the SEC to which Holder's Counsel, any selling Holder or any other Inspector
shall have reasonably objected on the grounds that such filing does not comply
in all material respects with the requirements of the Securities Act or of the
rules or regulations thereunder; and (iii) notify Holders' Counsel and each
Holder selling Registrable Securities pursuant to such Registration Statement
of any stop order issued or threatened by the SEC and take all reasonable
action required to prevent the entry of such stop order or to remove it if
entered;
<PAGE>
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary (i) to keep such Registration
Statement effective and (ii) to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such Registration Statement, in each case until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller(s) thereof set forth in such Registration
Statement; provided, that except with respect to any Shelf Registration, such
period need not extend beyond nine (9) months after the effective date of the
Registration Statement; and provided further, that with respect to any Shelf
Registration, such period need not extend beyond the time period provided in
Section 2.3, and which periods, in any event, shall terminate when all
Registrable Securities covered by such Registration Statement have been sold
(but not before the expiration of the ninety (90) day period referred to in
Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable);
(c) furnish, without charge, to each Holder selling such
Registrable Securities and each Underwriter, if any, of the securities covered
by such Registration Statement, such number of copies of such Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits), and the Prospectus included in such Registration Statement
(including each preliminary Prospectus) in conformity with the requirements of
the Securities Act, and other documents, as such selling Holder and
Underwriter may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities owned by such selling Holder
(the Company hereby consenting to the use in accordance with applicable law of
each such Registration Statement (or amendment or post-effective amendment
thereto) and each such Prospectus (or preliminary prospectus or supplement
thereto) by each such Holder selling Registrable Securities and the
Underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Registration Statement or Prospectus);
(d) prior to any public offering of Registrable Securities,
use its best efforts to register or qualify all Registrable Securities and
other securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as any Holder selling
Registrable Securities covered by such Registration Statement or the sole or
lead managing Underwriter, if any, may reasonably request (provided such
registration or qualification shall be required), and continue such
registration or qualification in effect in each such jurisdiction for as long
as such Registration Statement remains in effect (including through new
filings or amendments or renewals), and do any and all other acts and things
which may be necessary or advisable to enable any such selling Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such selling Holder; provided, however, that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 4.1(d), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction;
<PAGE>
(e) use its best efforts to obtain all other approvals,
consents, exemptions or authorizations from such governmental agencies or
authorities as may be necessary to enable the Holders selling such Registrable
Securities to consummate their disposition;
(f) promptly notify each Holder of Registrable Securities
covered by such Registration Statement and the sole or lead managing
Underwriter, if any: (i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any prospectus supplement related thereto or
post-effective amendment to the Registration Statement has been filed and,
with respect to the Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC or any
state securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
existence of any fact of which the Company becomes aware or the happening of
any event which results in (A) the Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to
be stated therein or necessary to make any statements therein not misleading
or (B) the Prospectus included in such Registration Statement containing an
untrue statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make any statements therein, in
the light of the circumstances under which they were made, not misleading,
(vi) if at any time the representations and warranties contemplated by Section
2.5(b) cease to be true and correct in all material respects and (vii) of the
Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate or that there exists circumstances
not yet disclosed to the public which make further sales under such
Registration Statement inadvisable pending such disclosure and post-effective
amendment; and, if the notification relates to an event described in any of
the clauses (ii) through (vii) of this Section 4.1(f), the Company shall
promptly prepare a supplement or post-effective amendment to such Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that (1) such Registration
Statement shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (2) as thereafter delivered to the
purchasers of the Registrable Securities being sold thereunder, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein in the light of the circumstances under which they were
made not misleading (and shall furnish to each such Holder and each
Underwriter, if any, a reasonable number of copies of such Prospectus so
supplemented or amended);
<PAGE>
(g) make available for inspection by any Holder selling
Registrable Securities, any sole or lead managing Underwriter participating in
any disposition pursuant to such Registration Statement, Holders' Counsel and
any attorney, accountant or other agent retained by any such seller or any
Underwriter (each, an "Inspector" and, collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of
the Company and any subsidiaries thereof as may be in existence at such time
(collectively, the "Records") as shall be necessary, in the opinion of such
Holders' and such Underwriters' respective counsel, to enable them to exercise
their due diligence responsibility and to conduct a reasonable investigation
within the meaning of the Securities Act, and cause the Company's and any
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspectors in connection with such Registration Statement;
(h) obtain an opinion from the Company's counsel and a "cold
comfort" letter from the Company's independent public accountants who have
certified the Company's financial statements included or incorporated by
reference in such Registration Statement, in each case dated the effective
date of such Registration Statement (and if such registration involves an
Underwritten Offering, dated the date of the closing under the underwriting
agreement), in customary form and covering such matters as are customarily
covered by such opinions and "cold comfort" letters delivered to underwriters
in underwritten public offerings, which opinion and letter shall be reasonably
satisfactory to the sole or lead managing Underwriter, if any, and to the
Holders of the Registration, and furnish to each Holder participating in the
offering and to each Underwriter, if any, a copy of such opinion and letter
addressed to such Holder (in the case of the opinion) and Underwriter (in the
case of the opinion and the "cold comfort" letter);
(i) provide a CUSIP number for all Registrable Securities and
provide and cause to be maintained a transfer agent and registrar for all such
Registrable Securities covered by such Registration Statement not later than
the effectiveness of such Registration Statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and any other governmental agency
or authority having jurisdiction over the offering, and make available to its
security holders, as soon as reasonably practicable but no later than ninety
(90) days after the end of any 12-month period, an earnings statement (i)
commencing at the end of any month in which Registrable Securities are sold to
Underwriters in an Underwritten Offering and (ii) commencing with the first
day of the Company's calendar month next succeeding each sale of Registrable
Securities after the effective date of a Registration Statement, which
statement shall cover such 12-month periods, in a manner which satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
<PAGE>
(k) use its best efforts to cause all such Registrable
Securities to be listed (i) on the same principal securities exchanges, the
NASD Automated Quotation System or other markets within the United States of
America, if any, as shares of the Company's securities are then listed or
quoted or (ii) if securities of the Company are not at the time listed or
quoted on any such exchanges or markets (or if the listing of Registrable
Securities is not permitted under the rules of each such exchanges or markets
on which the Company's securities are then listed or quoted), then on a
national securities exchange designated by the Holders;
(l) keep each Holder selling Registrable Securities advised in
writing as to the initiation and progress of any registration under Section 2
hereunder;
(m) enter into and perform customary agreements (including, if
applicable, an underwriting agreement in customary form) and provide officers'
certificates and other customary closing documents;
(n) cooperate with each Holder selling Registrable Securities
and each Underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings
required to be made with the NASD and make reasonably available its employees
and personnel and otherwise provide reasonable assistance to the Underwriters
(taking into account the needs of the Company's businesses and the
requirements of the marketing process) in the marketing of Registrable
Securities in any Underwritten Offering;
(o) furnish to each Holder selling Registrable Securities and
the sole or lead managing Underwriter, if any, without charge, at least one
manually-signed copy of the Registration Statement and any post-effective
amendments thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits (including those
deemed to be incorporated by reference);
(p) cooperate with the Holders selling such Registrable
Securities and the sole or lead managing Underwriter, if any, to facilitate
the timely preparation and delivery of certificates not bearing any
restrictive legends representing the Registrable Securities to be sold, and
cause such Registrable Securities to be issued in such denominations and
registered in such names in accordance with the underwriting agreement prior
to any sale of Registrable Securities to the Underwriters or, if not an
Underwritten Offering, in accordance with the instructions of the Holders
selling the Registrable Securities at least three business days prior to any
sale of Registrable Securities;
<PAGE>
(q) if requested by the sole or lead managing Underwriter or
any Holder selling Registrable Securities, immediately incorporate in a
prospectus supplement or post-effective amendment such information concerning
such Holder, the Underwriters or the intended method of distribution as the
sole or lead managing Underwriter or the selling Holder reasonably requests to
be included therein and as is appropriate in the reasonable judgment of the
Company, including, without limitation, information with respect to the number
of shares of the Registrable Securities being sold to the Underwriters, the
purchase price being paid therefor by such Underwriters and with respect to
any other terms of the Underwritten Offering of the Registrable Securities to
be sold in such offering; make all required filings of such Prospectus
supplement or post-effective amendment as soon as notified of the matters to
be incorporated in such Prospectus supplement or post-effective amendment; and
supplement or make amendments to any Registration Statement if requested by
the sole or lead managing Underwriter of such Registrable Securities; and
(r) use its best efforts to take all other steps necessary to
expedite or facilitate the registration and disposition of the Registrable
Securities contemplated hereby.
4.2 Seller Information. The Company may require each Holder selling
Registrable Securities as to which any registration is being effected to
furnish to the Company such information regarding such seller and the
distribution of such securities as the Company may from time to time
reasonably request in writing; provided, that such information shall be used
only in connection with such registration.
If any Registration Statement or comparable statement under
"blue sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory to
such Holder and the Company, to the effect that the holding by such Holder of
such securities is not to be construed as a recommendation by such Holder of
the investment quality of the Company's securities covered thereby and that
such holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company and (ii) in the event that such
reference to such Holder by name or otherwise is not in the judgment of the
Company, as advised by counsel, required by the Securities Act or any similar
federal statute or any state "blue sky" or securities law then in force, the
deletion of the reference to such Holder.
<PAGE>
4.3 Notice to Discontinue. Each Holder agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 4.1(f)(ii) through
(vii), such Holder shall forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 4.1(f) and, if so directed by the
Company, such Holder shall deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such Holder's possession
of the Prospectus covering such Registrable Securities which is current at the
time of receipt of such notice. If the Company shall give any such notice,
the Company shall extend the period during which such Registration Statement
shall be maintained effective pursuant to this Agreement (including, without
limitation, the period referred to in Section 4.1(b)) by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 4.1(f) to and including the date when the Holder shall
have received the copies of the supplemented or amended prospectus
contemplated by and meeting the requirements of Section 4.1(f).
5. INDEMNIFICATION; CONTRIBUTION.
5.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the fullest extent permitted by law, each Holder, its
officers, directors, partners, members, shareholders, employees, Affiliates
and agents (collectively, "Agents") and each Person who controls such Holder
(within the meaning of the Securities Act) and its Agents with respect to each
registration which has been effected pursuant to this Agreement, against any
and all losses, claims, damages or liabilities, joint or several, actions or
proceedings (whether commenced or threatened) in respect thereof, and expenses
(as incurred or suffered and including, but not limited to, any and all
expenses incurred in investigating, preparing or defending any litigation or
proceeding, whether commenced or threatened, and the reasonable fees,
disbursements and other charges of legal counsel) in respect thereof
(collectively, "Claims"), insofar as such Claims arise out of or are based
upon any untrue or alleged untrue statement of a material fact contained in
any Registration Statement, Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto), offering circular
or other document (including any related registration statement, notification
or the like) related to any such registration or any omission or alleged
omission to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the
Company will not be liable in any such case to the extent that any such Claims
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact so made in reliance upon and in conformity with written information
furnished to the Company in an instrument duly executed by such Holder
specifically stating that it was expressly for use therein. The Company shall
also indemnify any Underwriters of the Registrable Securities, their Agents
and each Person who controls any such Underwriter (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
<PAGE>
indemnification of the Holders. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of any Person who
may be entitled to indemnification pursuant to this Section 5 and shall
survive the transfer of securities by such Holder or Underwriter.
5.2 Indemnification by Holders. Each Holder selling Registrable
Securities agrees to, severally and not jointly, indemnify and hold harmless,
to the fullest extent permitted by law, the Company, its directors and
officers, each other Person who participates as an Underwriter in the offering
or sale of such Registrable Securities and its Agents and each Person who
controls the Company or any such Underwriter (within the meaning of the
Securities Act) and its Agents against any and all Claims, insofar as such
Claims arise out of or are based upon any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, Prospectus
(including any preliminary, final or summary prospectus and any amendment or
supplement thereto), offering circular or other document related to such
registration, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company in an instrument duly executed by such Holder specifically stating
that it was expressly for use therein; provided, however, that the aggregate
amount which any such Holder shall be required to pay pursuant to this Section
5.2 shall in no event be greater than the amount of the net proceeds received
by such Holder upon the sale of the Registrable Securities pursuant to the
Registration Statement giving rise to such Claims less all amounts previously
paid by such Holder with respect to any such Claims. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such indemnified party and shall survive the transfer of such
securities by such Holder or Underwriter.
5.3 Conduct of Indemnification Proceedings. Promptly after receipt by
an indemnified party of notice of any Claim or the commencement of any action
or proceeding involving a Claim under this Section 5, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 5, (i) notify the indemnifying party in writing of
the Claim or the commencement of such action or proceeding; provided, that the
failure of any indemnified party to provide such notice shall not relieve the
indemnifying party of its obligations under this Section 5, except to the
extent the indemnifying party is materially and actually prejudiced thereby
and shall not relieve the indemnifying party from any liability which it may
have to any indemnified party otherwise than under this Section 5 and (ii)
permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided, however,
that any indemnified party shall have the right to employ separate counsel and
to participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (A) the
indemnifying party has agreed in writing to pay such fees and expenses, (B)
the indemnifying
<PAGE>
party shall have failed to assume the defense of such claim and employ counsel
reasonably satisfactory to such indemnified party within ten (10) days after
receiving notice from such indemnified party that the indemnified party
believes it has failed to do so, (C) in the reasonable judgment of any such
indemnified party, based upon advice of counsel, a conflict of interest may
exist between such indemnified party and the indemnifying party with respect
to such claims (in which case, if the indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such indemnified party)
or (D) such indemnified party is a defendant in an action or proceeding which
is also brought against the indemnifying party and reasonably shall have
concluded that there may be one or more legal defenses available to such
indemnified party which are not available to the indemnifying party. No
indemnifying party shall be liable for any settlement of any such claim or
action effected without its written consent, which consent shall not be
unreasonably withheld. In addition, without the consent of the indemnified
party (which consent shall not be unreasonably withheld), no indemnifying
party shall be permitted to consent to entry of any judgment with respect to,
or to effect the settlement or compromise of any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim), unless such settlement, compromise or judgment
(1) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim, (2) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party and (3) does not provide for any action
on the part of any party other than the payment of money damages which is to
be paid in full by the indemnifying party.
5.4 Contribution. (a) If the indemnification provided for in Section
5.1 or 5.2 from the indemnifying party for any reason is unavailable to (other
than by reason of exceptions provided therein), or is insufficient to hold
harmless, an indemnified party hereunder in respect of any Claim, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Claim in such proportion as is appropriate to reflect the relative
fault of the indemnifying party, on the one hand, and the indemnified party,
on the other hand, in connection with the actions which resulted in such
Claim, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. If, however, the foregoing allocation is not
permitted by applicable law, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative faults but also the relative
benefits of the indemnifying party and the indemnified party as well as any
other relevant equitable considerations.
<PAGE>
(b) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.4 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by a party as a result of any Claim
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth in Section 5.3, any legal or other fees,
costs or expenses reasonably incurred by such party in connection with any
investigation or proceeding. Notwithstanding anything in this Section 5.4 to
the contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 5.4 to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of the Registrable
Securities pursuant to the Registration Statement giving rise to such Claims,
less all amounts previously paid by such indemnifying party with respect to
such Claims. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
5.5 Other Indemnification. Indemnification equivalent to that specified
in the preceding Sections 5.1 and 5.2 shall be given by the Company and each
Holder selling Registrable Securities with respect to any required
registration or other qualification of securities under any Federal or state
law or regulation of any governmental authority, other than the Securities
Act. The indemnity agreements contained herein shall be in addition to any
other rights to indemnification or contribution which any indemnified party
may have pursuant to law or contract.
5.6 Indemnification Payments. The Company shall make advances to the
indemnified parties hereunder of any expenses incurred by such parties in
connection with any proceeding or investigation, as and when bills are
received or any expense is incurred.
6. GENERAL
6.1 Adjustments Affecting Registrable Securities. The Company agrees
that it shall not effect or permit to occur any combination or subdivision of
shares which would adversely affect the ability of the Holder of any
Registrable Securities to include such Registrable Securities in any
registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration.
<PAGE>
6.2 Registration Rights to Others. The Company has not previously
entered into an agreement with respect to its securities granting any
registration rights to any Person. If the Company shall at any time
hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act, (i)
such rights shall not be in conflict with or adversely affect any of the
rights provided in this Agreement to the Holders and (ii) if such rights are
provided on terms or conditions more favorable to such holder than the terms
and conditions provided in this Agreement, the Company shall provide (by way
of amendment to this Agreement or otherwise) such more favorable terms or
conditions to the Holders.
6.3 Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, without the written consent of the Company and the Holders; provided,
however, that nothing herein shall prohibit any amendment, modification,
supplement, waiver or consent the effect of which is limited only to such
Holder who has agreed to such amendment, modification, supplement, waiver or
consent.
6.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, telecopier, any
courier guaranteeing overnight delivery or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to the applicable
party at the address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties in accordance with
the provisions of this Section:
(i) If to the Company, to:
WRT Energy Corporation
3303 FM 1960 West, Suite 460
Houston, Texas 77057
Attn: Mr. Gary C. Hanna
Telecopy: (281) 583-0219
Telephone: (281) 583-8958
With a copy to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, NY 10022
Attn: Jeffrey S. Sabin, Esq.
Telecopy: (212) 593-5955
Telephone: (212) 756-2290
<PAGE>
(ii) If to DLB or Wexford, to:
DLB Oil & Gas, Inc.
1601 N.W. Expressway
Suite 700
Oklahoma City, OK 73118-1401
Attn: Mark Liddell
Telecopy: (405) 848-9449
Telephone: (405) 848-8808
and
Wexford Management LLC
411 West Putnam Avenue
Greenwich, CT 06830
Attn: Arthur Amron, Esq.
Telecopy: (203) 862-7461
Telephone: (203) 862-7400
With a copy to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, NY 10022
Attn: Jeffrey S. Sabin, Esq.
Telecopy: (212) 593-5955
Telephone: (212) 756-2290
All such notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; when receipt is
acknowledged, if telecopied; on the next business day, if timely delivered to
a courier guaranteeing overnight delivery; and five days after being deposited
in the mail, if sent first class or certified mail, return receipt requested,
postage prepaid.
6.5 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs,
successors and permitted assigns. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Company or Holder without the consent of the other
parties hereto, except to another Holder; provided, however, that this
Agreement and any right, remedy, obligation or liability arising hereunder or
by reason hereof shall be assignable at the discretion of DLB or Wexford in
connection with the sale or other transfer of any or all of their Registrable
Securities without the consent of any other party hereto. In the event any
heir, successor or permitted assign of any Holder shall take and hold any
Registrable Securities of such Holder, then such heir, successor or permitted
assign (i) shall promptly notify the Company and (ii) upon taking and holding
such Registrable Securities, such heir, successor or permitted assign shall
automatically be entitled to receive the benefits of and be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
<PAGE>
provisions of this Agreement (and shall, for all purposes, be deemed a Holder
under this Agreement). For purposes of this Agreement, "successor" for any
entity other than a natural person shall mean a successor to such entity as a
result of such entity's merger, consolidation, liquidation, dissolution, sale
of substantially all of its assets, or similar transaction.
6.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed
to be an original, but all of which counterparts, taken together, shall
constitute one and the same instrument.
6.7 Descriptive Headings, Etc. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (4) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified; (5) "or" is not
exclusive; and (6) provisions apply to successive events and transactions.
6.8 Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any
way impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
6.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF).
<PAGE>
6.10 Remedies; Specific Performance. The parties hereto acknowledge
that money damages may not be an adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this
Agreement, without the posting of any bond, in accordance with the terms and
conditions of this Agreement in any court of the United States or any State
thereof having jurisdiction pursuant to Section 6.13 hereof, and if any action
should be brought in equity to enforce any of the provisions of this
Agreement, none of the parties hereto shall raise the defense that there is an
adequate remedy at law. Except as otherwise provided by law, a delay or
omission by a party hereto in exercising any right or remedy accruing upon any
such breach shall not impair the right or remedy or constitute a waiver of or
acquiescence in any such breach. No remedy shall be exclusive of any other
remedy. All available remedies shall be cumulative.
6.11 Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises or undertakings, other than those set forth or referred to herein.
This Agreement supersedes all prior agreements and understandings between the
Company and the other parties to this Agreement with respect to such subject
matter.
6.12 Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes
of any request or other action by any holder or holders of Registrable
Securities pursuant to this Agreement or any determination of any number or
percentage of shares of Registrable Securities held by any holder or holders
of Registrable Securities contemplated by this Agreement. If the beneficial
owner of any Registrable Securities so elects, the Company may require
assurances reasonably satisfactory to it of such owner's beneficial ownership
of such Registrable Securities.
<PAGE>
6.13 Consent to Jurisdiction. Each party to this Agreement hereby
irrevocably agrees that any legal action, suit or proceeding arising out of or
relating to this Agreement or any agreements or transactions contemplated
hereby may be brought in any federal court of the Southern District of New
York or any state court located in New York County, State of New York, and
hereby expressly submits to the personal jurisdiction and venue of such courts
for the purposes thereof and irrevocably waives any claim (by way of motion,
as a defense or otherwise) of improper venue, that it is not subject
personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Agreement or the subject matter may not be
enforced in or by such court. Each party hereby irrevocably consents to the
service of process of any of the aforementioned courts in any such action,
suit or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the address set forth or provided for in Section 6.4
of this Agreement, such service to become effective ten (10) days after such
mailing. Nothing herein contained shall be deemed to affect the right of any
party to serve process in any manner permitted by law or commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section.
6.14 Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
6.15 No Inconsistent Agreements. The Company will not hereafter enter
into any agreement which is inconsistent with the rights granted to the
Holders in this Agreement.
6.16 Construction. The Company, DLB and Wexford acknowledge that each
of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and
that this Agreement shall be construed as if jointly drafted by the Company,
DLB and Wexford.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
WRT ENERGY CORPORATION
\-------------------------------\
By:
Title:
DLB OIL & GAS, INC.
\-------------------------------\
By:
Title:
WEXFORD MANAGEMENT LLC
\-------------------------------\
By:
Title:
<PAGE>
Exhibit H
RESTATED CERTIFICATE OF INCORPORATION
OF
WRT ENERGY CORPORATION
WRT Energy Corporation (the "Corporation"), a corporation organized
and existing under the General Corporation Law of the State of Delaware, does
hereby certify that:
1. The name of the Corporation is WRT Energy Corporation, and the
date of filing of its original Certificate of Incorporation with the Secretary
of State of the State of Delaware was June 20, 1997.
2. This Restated Certificate of Incorporation restates and
integrates and further amends the Certificate of Incorporation of the
Corporation as follows: Article IX of the Certificate of Incorporation is
added to permit the Corporation to expressly opt out of Section 203 of the
General Corporation Law of the State of Delaware (the "DGCL").
3. The Corporation, as of the date hereof, has not received any
payment for any of its stock.
4. This Restated Certificate of Incorporation was duly adopted by
a majority of the directors of the Board of Directors of the Corporation in
accordance with the provisions of Section 241 of the DGCL.
5. The text of the Certificate of Incorporation as amended or
supplemented heretofore is further amended hereby, and is hereby restated, to
read in its entirety as herein set forth:
RESTATED CERTIFICATE OF INCORPORATION
OF
WRT Energy Corporation
----------------------
ARTICLE I
NAME
The name of the corporation is WRT Energy Corporation (the
"Corporation").
<PAGE>
ARTICLE II
PURPOSE
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "DGCL"), within or without the State of
Delaware.
ARTICLE III
DURATION
The duration of the Corporation shall be in perpetuity, or such
maximum period as may be authorized by the laws of Delaware.
ARTICLE IV
AUTHORIZED CAPITAL
The Corporation is hereby authorized to issue a total of fifty-one
million (51,000,000) shares of capital stock which shall be subdivided into
classes as follows:
(a) Fifty million (50,000,000) shares of the Corporation's
capital stock shall be denominated as Common Stock, have a par value of $0.01
per share, and have the rights, powers and preferences set forth in this
paragraph. The holders of Common Stock shall share ratably, with all other
classes of common equity, in any dividends that may, from time to time, be
declared by the Board of Directors. No dividends may be paid with respect to
the Corporation's Common Stock, however, until dividend distributions to the
holders of Preferred Stock, if any, have been paid in accordance with the
certificate or certificates of designation relating to such Preferred Stock.
The holders of Common Stock shall share ratably, with all other classes of
common equity, if any, in any assets of the Corporation that are available for
distribution to the holders of common equity securities of the Corporation
upon the dissolution or liquidation of the Corporation. The holders of Common
Stock shall be entitled to cast one vote per share on all matters that are
submitted for a vote of the stockholders. There are no redemption or sinking
fund provisions that are applicable to the Common Stock of the Corporation.
Subject only to the requirements of the DGCL and the foregoing limits, the
Board of Directors is expressly authorized to issue shares of Common Stock
without stockholder approval, at any time and from time to time, to such
persons and for such consideration as the Board of Directors shall deem
appropriate under the circumstances.
(b) One million (1,000,000) shares of the Corporation's
authorized capital stock shall be denominated as Preferred Stock, par value of
$0.01 per share. Shares of Preferred Stock may be issued from time to time in
one or more series as the Board of Directors, by resolution or resolutions,
may from time to time determine, each of said series to be distinctively
designated. The voting powers, preferences and relative, participating,
<PAGE>
optional and other special rights, and the qualifications, limitations or
restrictions thereof, if any, of each such Series of Preferred Stock may
differ from those of any and all other series of Preferred Stock at any time
outstanding, and the Board of Directors is hereby expressly granted authority
to fix or alter, by resolution or resolutions, the designation, number, voting
powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations and restrictions thereof, of each
such series of Preferred Stock, including, but without limiting the generality
of the foregoing, the following:
(i) The distinctive designation of, and the number of shares of
Preferred Stock that shall constitute, each series of
Preferred Stock, which number (except as otherwise provided
by the Board of Directors in the resolution establishing such
series) may be increased or decreased (but not below the
number of shares of such series then outstanding) from time
to time by the Board of Directors without prior approval of
the holders of such series;
(ii) The rights in respect of dividends, if any, of such series of
Preferred Stock, the extent of the preference or relation, if
any, of such dividends payable on any other class or classes
or any other series of the same or other class or classes of
capital stock of the Corporation, and whether such dividends
shall be cumulative or non-cumulative;
(iii) The right, if any, of the holders of such series of Preferred
Stock to convert the same into, or exchange the same for,
shares of any other class or classes or of any other series
of the same or any other class or classes of capital stock of
the Corporation and the terms and conditions of such
conversion or exchange, including, without limitation,
whether or not the number of shares of such other class or
series into which shares of such series may be converted or
exchanged shall be adjusted in the event of any stock split,
stock dividend, subdivision, combination, reclassification or
other transaction or series of transactions affecting the
class or series into which such series of Preferred Stock may
be converted or exchanged;
(iv) Whether or not shares of such series of Preferred Stock shall
be subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, shares of such series of Preferred Stock may be
redeemed;
(v) The rights, if any, of the holder of such series of Preferred
Stock upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation or in the event
of any merger or consolidation of or sale of assets by the
Corporation;
<PAGE>
(vi) The terms of sinking fund or redemption or repurchase
account, if any, to be provided for shares of such series of
Preferred Stock;
(vii) The voting powers, if any, of the holders of any series of
Preferred Stock generally or with respect to any particular
matter, which may be less than, equal to or greater than one
vote per share, and which may, without limiting the
generality of the foregoing, include the right, voting as a
series by itself or together with the holders of any other
series of Preferred Stock or all series of Preferred Stock as
a class, to elect one or more directors of the Corporation
(which, without limiting the generality of the foregoing, may
include a specified number or portion of the then-existing
number of authorized directorships of the Corporation, or a
specified number or portion of directorships in addition to
the then-existing number of authorized directorships of the
Corporation), generally or under such specific circumstances
and on such conditions, as shall be provided in the
resolution or resolutions of the Board of Directors adopted
pursuant hereto; and
(viii) Such other powers, preferences and relative, participating,
optional and other special rights, and the qualifications,
limitations and restrictions thereof, as the Board of
Directors shall determine.
Upon the creation of any new class or series of Preferred Stock of
the Corporation, the Board of Directors shall prepare and file with the
records of the Corporation and pursuant to the applicable provisions of the
DGCL a certificate setting forth the rights and preferences of such class or
series of Preferred Stock, which certificate as so filed shall be deemed an
amendment to this Certificate of Incorporation and shall not require the
consent of any stockholder.
(c) In addition to the Common Stock and Preferred Stock described
above, the Board of Directors is authorized to cause the issuance of any
options, rights, warrants or appreciation rights relating to any equity or
debt security of the Corporation and which may have rights or preference
junior or senior to any equity or debt security of the Corporation from time
to time on terms and conditions established in the sole and complete
discretion of the Board of Directors. If and to the extent required by the
DGCL, upon the creation of any new class or series of additional securities of
the Corporation, the Board of Directors shall prepare and file with the
records of Corporation a certificate setting forth the rights and preferences
of such class or series of additional securities of the Corporation, which
certificate shall be deemed an amendment to this Certificate of Incorporation
and shall not require the consent of any stockholder.
(d) Except to the extent that such rights are specifically
enumerated in a certificate setting forth the rights and preferences of a
<PAGE>
specific class or series of Preferred Stock or other securities of the
Corporation, no stockholder shall have any preemptive, preferential or other
right, including, without limitation, with respect to (i) the issuance or sale
of additional Common Stock of the Corporation, (ii) the issuance or sale of
additional Preferred Stock of the Corporation, (iii) the issuance of any
obligation and/or evidence of indebtedness of the Corporation which is or may
be convertible into or exchangeable for, or accompanied by any rights to
receive, purchase or subscribe to, any shares of Common Stock, Preferred Stock
or other securities of the Corporation, (iv) the issuance of any right of
subscription to, or right to receive, any warrant or option for the purchase
of any Common Stock, Preferred Stock or other securities of the Corporation or
(v) the issuance or sale of any other equity or debt securities that may be
issued or sold by the Corporation from time to time.
(e) Notwithstanding anything in this Certificate of Incorporation
to the contrary, the Board of Directors shall be prohibited from authorizing
or issuing any equity securities that have no voting rights.
ARTICLE V
RIGHTS AND POWERS OF STOCKHOLDERS
(a) Meetings of stockholders may be held within or without the
State of Delaware, at such date and time as is requested by the person or
persons calling the meeting, within the limits fixed by law. The books of the
Corporation may be kept (subject to any provision contained in the statutes)
outside the State of Delaware at such place or places as may be designated
from time to time by the Board of Directors or in the By-laws of the
Corporation.
(b) At any annual or special meeting of the stockholders, only
such business shall be conducted as shall have been properly brought before
the meeting in accordance with this Article V. To be properly brought before
an annual meeting business must be (a) specified in the notice of meeting (or
any supplement thereto) given by or at the direction of the Board of
Directors, (b) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (c) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than sixty (60) days
nor more than ninety (90) days prior to the meeting, provided, however, that
in the event that less than seventy (70) days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be so received not later than the close
of business on the tenth (10th) day following the day on which such notice of
the date of the annual meeting was mailed or such public disclosure was made.
A stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a brief
<PAGE>
description of the business desired to be brought before the annual meeting
and the reasons for conducting such business at the annual meeting, (b) the
name and address, as they appear on the Corporation's books, of the
stockholder proposing such business, (c) the number of shares of the
Corporation which are beneficially owned by the stockholder and (d) any
material interest of the stockholder in such business. To be properly brought
before a special meeting of stockholders, business must have been specified in
the notice of meeting (or supplement thereto) given by or at the direction of
the Board of Directors. Notwithstanding anything in the By-laws to the
contrary, no business shall be conducted at any annual or special meeting
except in accordance with the procedures set forth in this Article V. The
chairman of the annual meeting shall, if the facts warrant, determine and
declare at the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Article V, and if he should
so determine, he shall so declare at the meeting and any such business not
properly brought before the meeting shall not be transacted.
(c) Only persons who are nominated in accordance with the
procedures set forth in this Article V shall be eligible for election as
directors of the Corporation. Nominations of persons for election to the
Board of Directors of the Corporation may be made at a meeting of stockholders
by or at the direction of the Board of Directors or by any stockholder of the
Corporation entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Article V. Such
nominations, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Corporation. To be timely, a stockholder's notice shall be delivered
to or mailed and received at the principal executive offices of the
Corporation not less than sixty (60) days nor more than ninety (90) days prior
to the meeting, provided, however, that in the event that less than seventy
(70) days' notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder to be timely must be
so received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the meeting was mailed
or such public disclosure was made. Such stockholder's notice shall set forth
(a) as to each person whom the stockholder proposes to nominate for election
or reelection as a director, (i) the name, business address and residence
address of such person, (ii) the principal occupation or employment of such
person, (iii) the number of shares, if any, of the Corporation which are
beneficially owned by such person and (iv) any other information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended
(including without limitation such persons' written consent to being named in
the proxy statement as a nominee and to serving as a director if elected); and
(b) as to the stockholder giving the notice (i) the name and address, as they
appear on the Corporation's books, of such stockholder and (ii) the number of
shares of the Corporation which are beneficially owned by such stockholder.
The chairman of the meeting shall, if the facts warrant, determine and declare
to the meeting that a nomination was not made in accordance with the
procedures prescribed herein, and if he should so determine, he shall so
declare at the meeting and the defective nomination shall be disregarded.
<PAGE>
ARTICLE VI
DIRECTORS
(a) The business and affairs of the Corporation shall be
conducted and managed by, or under the direction of, the Board of Directors.
The exact number of directors of the Corporation shall be fixed by the Board
of Directors as provided in the By-laws.
(b) The personal liability of the directors of the Corporation is
hereby eliminated to the fullest extent permitted by the DGCL (including,
without limitation, paragraph (7) of subsection (b) of Section 102 thereof),
as the same may be amended and supplemented from time to time. If the DGCL
hereafter is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the Corporation,
in addition to the limitation on personal liability provided herein, shall be
limited to the fullest extent permitted by the amended DGCL. Any repeal or
modification of this paragraph by the stockholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the time of
such repeal or modification.
(c) The election of directors of the Corporation need not be by
written ballot, unless the By-laws of the Corporation otherwise provide.
ARTICLE VII
REGISTERED OFFICE AND AGENT, AND DIRECTORS
The address of the Corporation's registered office in the State of
Delaware is 1013 Centre Road, Wilmington, County of New Castle, Delaware,
19085. Corporation Service Company is the Corporation's registered agent at
this address. The names and mailing addresses of the persons who are to serve
as directors until the first annual meeting of stockholders or until their
successors are elected and qualified are:
Name Address
---- -------
1. Charles E. Davidson 411 West Putnam Avenue, Greenwich, CT 06830
2. Mark Liddell 1601 N.W. Expressway, Suite 700, Oklahoma City,
OK 73118-1401
3. Mike Liddell 1601 N.W. Expressway, Suite 700, Oklahoma City,
OK 73118-1401
4. Robert E. Brooks 343 Third Street, Suite 205, Baton Rouge, LA 70801
5. Alan May 10814 Everwood Lane, Houston, TX 70024
<PAGE>
ARTICLE VIII
AMENDMENTS TO THE CERTIFICATE OF
INCORPORATION AND BY-LAWS
(a) The Corporation reserves the right to amend, alter, change or
repeal, from time to time, any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation of powers.
(b) The Board of Directors shall have the power to make, adopt,
alter, amend and repeal from time to time the By-laws of this Corporation,
subject to the right of the stockholders entitled to vote with respect thereto
to adopt, amend and repeal by-laws.
ARTICLE IX
SECTION 203 - BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS
The Corporation hereby expressly elects not to be governed by
Section 203 of the DGCL.
ARTICLE X
INCORPORATOR
Robert E. Hochstein is the sole incorporator and his mailing address
is c/o Schulte Roth & Zabel LLP, 900 Third Avenue, New York, New York, 10022.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to
be signed by Gary C. Hanna, its President, this day of July, 1997.
-------
By:
/--------------------/
Name: Gary C. Hanna
Title: President
<PAGE>
Exhibit I
BY-LAWS
OF
WRT ENERGY CORPORATION
(hereinafter called the "Corporation")
ARTICLE I
Offices
-------
Section 1. Registered Office. The registered office of the
-----------------
Corporation shall be in the City of Wilmington, County of New Castle, State of
Delaware.
Section 2. Other Offices. The Corporation may also have offices at
-------------
such other places both within and without the State of Delaware as the Board
of Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
Meetings of Stockholders
------------------------
Section 1. Place of Meetings. Except as otherwise provided in
-----------------
these By-laws, all meetings of the stockholders shall be held on such dates
and at such times and places, within or without the State of Delaware, as
shall be determined by the Board of Directors, or the Chairman of the Board of
Directors or the President and as shall be stated in the notice of the meeting
or in waivers of notice thereof. If the place of any meeting is not so fixed,
it shall be held at the registered office of the Corporation in the State of
Delaware.
Section 2. Annual Meeting. The annual meeting of stockholders for
--------------
the election of directors and the transaction of such other proper business as
may be brought before the meeting shall be held on such date after the close
of the Corporation's fiscal year, and at such time, as the Board of Directors
may from time to time determine.
Section 3. Special Meetings. Special meetings of the stockholders,
----------------
for any purpose or purposes, may be called by the Board of Directors, or the
Chairman of the Board of Directors or the President and shall be called by the
President or the Secretary upon the written request of a majority of the
directors or the holders of not less than sixty-six percent (66%) of the
<PAGE>
Corporation's outstanding shares entitled to vote at such meeting. The
request shall state the date, time, place and purpose or purposes of the
proposed meeting.
Section 4. Notice of Meetings. Except as otherwise required or
------------------
permitted by law, whenever the stockholders are required or permitted to take
any action at a meeting, written notice thereof shall be given, stating the
place, date and hour of the meeting and, unless it is the annual meeting, by
or at whose direction it is being issued. The notice also shall designate the
place where the stockholders list is available for examination, unless the
list is kept at the place where the meeting is to be held. Notice of a
special meeting also shall state the purpose or purposes for which the meeting
is called. A copy of the notice of any meeting shall be delivered personally
or shall be mailed, not less than ten (10) and not more than sixty (60) days
before the date of the meeting, to each stockholder entitled to vote at the
meeting.
If mailed, the notice shall be deemed given when deposited in the
United States mail, postage prepaid, directed to each stockholder at such
stockholder's address as it appears on the records of the Corporation, unless
such stockholder shall have filed with the Secretary of the Corporation a
written request that such notices be mailed to some other address, in which
case it shall be directed to such other address. Notice of any meeting of
stockholders need not be given to any stockholder who shall attend the
meeting, other than for the express purpose of objecting at the beginning
thereof to the transaction of any business because the meeting is not lawfully
called or convened, or who shall submit, either before or after the time
stated therein, a signed waiver of notice.
Unless the Board of Directors, after an adjournment is taken, shall
fix a new record date for an adjourned meeting or unless the adjournment is
for more than thirty (30) days, notice of an adjourned meeting need not be
given if the place, date and time to which the meeting shall be adjourned are
announced at the meeting at which the adjournment is taken. If, however, the
date of any adjourned meeting is more than thirty (30) days after the date for
which the meeting was originally noticed, or if a new record date is fixed for
the adjourned meeting, written notice of the place, date and time of the
adjourned meeting shall be given in conformity herewith. At any adjourned
meeting, any business may be transacted which might have been transacted at
the original meeting.
Section 5. Quorum. Except as otherwise provided by law or by the
------
Certificate of Incorporation of the Corporation, at all meetings of
stockholders the holders of a majority of the shares of the Corporation
entitled to vote, present in person or represented by proxy, shall constitute
a quorum for the transaction of business. Where a separate vote by a class,
classes or series is required, a majority of the outstanding shares of such
class, classes, or series, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that vote on that
<PAGE>
matter, unless or except to the extent that the presence of a larger number
may be required by law or the Certificate of Incorporation. If a quorum shall
fail to attend any meeting, the chairman of the meeting may adjourn the
meeting to another place, date or time without notice other than announcement
at the meeting, until a quorum shall be present or represented.
Section 6. Voting. Except as otherwise provided by law or by the
------
Certificate of Incorporation of the Corporation, at any meeting of the
stockholders every stockholder of record having the right to vote thereat
shall be entitled to one vote for every share of stock standing in his name as
of the record date and entitling him to so vote. A stockholder may vote in
person or by proxy. Except as otherwise provided by law or by the Certificate
of Incorporation, any corporate action to be taken by a vote of the
stockholders, other than the election of directors, shall be authorized by the
affirmative vote of a majority of the shares present or represented by proxy
at the meeting and entitled to vote on the subject matter. Directors shall be
elected as provided in Section 2 of Article III of these By-laws. Written
ballots shall not be required for voting on any matter unless ordered by the
chairman of the meeting.
Section 7. Proxies. Every proxy shall be executed in writing by
-------
the stockholder or by his authorized representative, or otherwise as provided
in the General Corporation Law of the State of Delaware ("DGCL").
Section 8. List of Stockholders. For a period of at least ten (10)
--------------------
days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and showing
their addresses and the number of shares registered in their names as of the
record date shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present. This list shall presumptively
determine the identity of the stockholders entitled to vote at the meeting and
the number of shares held by each of them.
Section 9. Conduct of Meetings. At each meeting of the
-------------------
stockholders, the Chairman of the Board of Directors or, in his absence, one
of the following officers present in the order stated shall act as chairman of
the meeting: the President, the Vice Presidents in their order of rank and
seniority, or a chairman chosen by a majority of the directors present. The
Secretary, or, in his absence, an Assistant Secretary, or in the absence of
the Secretary and the Assistant Secretaries, any person appointed by the
<PAGE>
chairman of the meeting shall act as Secretary of the meeting and shall keep
the minutes thereof. The order of business at all meetings of the
stockholders shall be as determined by the chairman of the meeting.
Section 10. Consent of Stockholders in Lieu of Meeting. Unless
------------------------------------------
otherwise provided in the Certificate of Incorporation of the Corporation, any
action required to be taken or which may be taken at any annual or special
meeting of stockholders may be taken without a meeting, without prior notice
and without a vote, if a consent or consents in writing, setting forth the
action so taken, shall be signed, in person or by proxy, by the holders of
outstanding stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted in person or by proxy and
shall be delivered to the Corporation as required by law. Prompt notice of
the taking of the corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not consented in
writing.
Section 11. Inspectors of Election. In advance of any meeting of
----------------------
stockholders, the Board of Directors may appoint one or more inspectors of
election, who need not be stockholders, to act at such meeting or any
adjournment thereof. If inspectors of election are not so appointed, the
person presiding at any such meeting may, and on the request of any
stockholder entitled to vote at the meeting and before voting begins shall,
appoint inspectors of election. If any person who is appointed fails to
appear or act, the vacancy may be filled by appointment made by the Board of
Directors in advance of the meeting, or at the meeting by the person presiding
at the meeting. Each inspector, before entering upon the discharge of his
duties, shall take an oath faithfully to execute the duties of inspector at
such meeting.
If inspectors of election are appointed as aforesaid, they shall
determine from the lists referred to in Section 8 of this Article II the
number of shares outstanding, the shares represented at the meeting, the
existence of a quorum and the voting power of shares represented at the
meeting, determine the authenticity, validity and effect of proxies, receive
votes or ballots, hear and determine all challenges and questions in any way
arising in connection with the right to vote or the number of votes which may
be cast, count and tabulate all votes or ballots, determine the results, and
do such acts as are proper to conduct the election or vote with fairness to
all stockholders entitled to vote thereat. Unless waived by vote of the
stockholders conducted in the manner which is provided in Section 5 of this
Article, the inspectors shall make a report in writing of any challenge or
question matter which is determined by them, and execute a sworn certificate
of any facts found by them. The decision, act or certificate of a majority of
the inspectors of election shall be effective in all respects as the decision,
act or certificate of all the inspectors of election.
<PAGE>
ARTICLE III
Board of Directors
------------------
Section 1. Number of Directors. Except as otherwise provided by
-------------------
the Certificate of Incorporation of the Corporation, until such time as the
Board of Directors determines otherwise, the Board of Directors shall consist
of five (5) members, with the then-authorized number of directors being fixed
from time to time solely by or pursuant to a resolution passed by the Board of
Directors, provided, however, that from , 1997 until ,
2000 there shall be no more than and no less than five (5) directors.
Effective , 2000, the number of directors may be reduced or in-
creased from time to time by action of a majority of the whole Board, but no
decrease may shorten the term of an incumbent director. When used in these
By-laws, the term "whole Board" means the total number of directors which the
Corporation would have if there were no vacancies.
Section 2. Election and Term. Except as otherwise provided by law,
-----------------
by the Certificate of Incorporation of the Corporation or by these By-laws,
the directors shall be elected at the annual meeting of the stockholders and
the persons receiving a plurality of the votes cast shall be so elected.
Subject to his earlier death, resignation or removal, each director shall hold
office until his successor shall have been elected and shall have qualified.
Section 3. Removal. Except for such directors, if any, as are
-------
elected by the holders of any series of Preferred Stock separately as a class
as provided for or fixed pursuant to the provisions of the Certificate of
Incorporation, any director of the Corporation may be removed from office only
for cause and only by the affirmative vote of the holders of not less than
sixty-six percent (66%) of the votes which could be cast by holders of all
outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, considered for this purpose as one
class.
Section 4. Resignations. Any director may resign at any time by
------------
giving written notice of his resignation to the Corporation. A resignation
shall take effect at the time specified therein or, if the time when it shall
become effective shall not be specified therein, immediately upon its receipt,
and, unless otherwise specified therein, the acceptance of a resignation shall
not be necessary to make it effective.
Section 5. Vacancies. Except as otherwise provided by the
---------
Certificate of Incorporation of the Corporation, any vacancy in the Board of
Directors and newly created directorships, resulting from any increase in the
<PAGE>
authorized number of directors or otherwise, may be filled only by the vote of
a majority of the directors then in office, although less than a quorum, or by
a sole remaining director. Any director elected to fill a vacancy not
resulting from an increase in the number of directors shall have the same
remaining term as that of his predecessor.
Section 6. Place of Meetings. Except as otherwise provided in
-----------------
these By-laws, all meetings of the Board of Directors, both regular and
special, shall be held at such places, within or without the State of
Delaware, as the Board determines from time to time.
Section 7. Annual Meeting. The first meeting of each newly-elected
--------------
Board of Directors shall be held either (x) immediately following the annual
meeting of stockholders and no notice of such meeting shall be necessary to be
given the newly-elected directors in order legally to constitute the meeting,
provided a quorum shall be present, or (y) as soon as practicable after the
annual meeting of the stockholders on such date and at such time and place as
the Board of Directors determines from time to time. In the event such annual
meeting of stockholders is not so held, the annual meeting of the Board of
Directors shall be held on such date and at such time and place as the Board
determines from time to time.
Section 8. Regular Meetings. Regular meetings of the Board of
----------------
Directors shall be held on such dates and at such times and places as the
Board of Directors determines from time to time. Notice of regular meetings
need not be given, except as otherwise required by law.
Section 9. Special Meetings. Special meetings of the Board of
----------------
Directors, for any purpose or purposes, may be called by the Chairman of the
Board of Directors or the President and shall be called by the President or
the Secretary upon the written request of a majority of the directors. The
request shall state the date, time, place and purpose or purposes of the
proposed meeting.
Section 10. Notice of Meetings. Notice of each special meeting of
------------------
the Board (and of each annual meeting which is not held immediately after, and
in the same place as, the annual meeting of stockholders) shall be given, not
less than twenty-four (24) hours before the meeting is scheduled to commence,
by the Chairman of the Board of Directors, the President or the Secretary and
shall state the place, date and time of the meeting. Notice of each meeting
may be delivered to a director by hand or given to a director orally (either
by telephone or in person) or mailed, telegraphed or sent by facsimile
transmission to a director at his residence or usual place of business,
provided, however, that if notice of less than seventy-two (72) hours is given
it may not be mailed. If mailed, the notice shall be deemed given when
<PAGE>
deposited in the United States mail, postage prepaid; if telegraphed, the
notice shall be deemed given when the contents of the telegram are transmitted
to the telegraph service with instructions that the telegram immediately be
dispatched; and if sent by facsimile transmission, the notice shall be deemed
given when transmitted with transmission confirmed. Notice of any meeting
need not be given to any director who shall submit, either before or after the
time stated therein, a signed waiver of notice or who shall attend the
meeting, other than for the express purpose of objecting at the beginning
thereof to the transaction of any business because the meeting is not lawfully
called or convened. Notice of an adjourned meeting, including the place, date
and time of the new meeting, shall be given to all directors not present at
the time of the adjournment, and also to the other directors unless the place,
date and time of the new meeting are announced at the meeting at the time at
which the adjournment is taken.
Section 11. Quorum. Except as otherwise provided by law or in
------
these By-laws, at all meetings of the Board of Directors a majority of the
whole Board shall constitute a quorum for the transaction of business, and the
vote of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board. A majority of the directors present,
whether or not a quorum is present, may adjourn any meeting to another place,
date and time.
Section 12. Conduct of Meetings. At each meeting of the Board of
-------------------
Directors, the Chairman of the Board of Directors or, in his absence, the
President or, in his absence, a director chosen by a majority of the directors
present shall act as chairman of the meeting. The Secretary or, in his
absence, any person appointed by the chairman of the meeting shall act as
Secretary of the meeting and keep the minutes thereof. The order of business
at all meetings of the Board of Directors shall be as determined by the
chairman of the meeting.
Section 13. Committees of the Board. The Board of Directors, by
-----------------------
resolution adopted by a majority of the whole Board of Directors, may
designate an executive committee and other committees, each consisting of one
or more directors. Each committee (including the members thereof) shall serve
at the pleasure of the Board of Directors and shall keep minutes of its
meetings and report the same to the Board of Directors. The Board of
Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member or members at any
meeting of the committee. In addition, in the absence or disqualification of
a member of a committee, if no alternate member has been designated by the
Board of Directors, the member or members present at any meeting and not
disqualified from voting, whether or not they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of the absent or disqualified member. Except as limited
by law, each committee, to the extent provided in the resolution of
<PAGE>
the Board of Directors establishing it, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation.
Section 14. Operation of Committees. A majority of all the members
-----------------------
of a committee shall constitute a quorum for the transaction of business, and
the vote of a majority of all the members of a committee present at a meeting
at which a quorum is present shall be the act of the committee. Each
committee shall adopt whatever other rules of procedure it determines to be
necessary for the conduct of its activities.
Section 15. Consent to Action. Any action required or permitted to
-----------------
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors
or committee.
Section 16. Attendance Other Than in Person. Members of the Board
-------------------------------
of Directors or any committee thereof may participate in a meeting of the
Board of Directors or committee, as the case may be, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation shall
constitute presence in person at the meeting.
Section 17. Compensation. Unless otherwise restricted by the
------------
Certificate of Incorporation or these By-laws, the Board of Directors shall
have the authority to fix the compensation of directors. The directors may be
paid their expenses, if any, of attendance at each meeting of the Board of
Directors and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as director. No such payment shall
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees
may be allowed like compensation for attending committee meetings.
ARTICLE IV
Officers
--------
Section 1. General. The officers of the Corporation shall be
-------
appointed by the Board of Directors and shall consist of a Chairman of the
Board or a President, or both, one or more Vice Presidents, a Treasurer and a
Secretary. The Board of Directors may also choose one or more Assistant
Secretaries and Assistant Treasurers and such other officers and agents as the
Board of Directors, in its sole and absolute discretion, shall deem necessary
<PAGE>
or appropriate as designated by the Board of Directors from time to time. Any
number of offices may be held by the same person, unless the Certificate of
Incorporation or these By-laws provide otherwise.
Section 2. Election; Term of Office. The Board of Directors at its
------------------------
first meeting held after each annual meeting of stockholders shall elect a
Chairman of the Board or a President, or both, one or more Vice Presidents, a
Secretary and a Treasurer, and may also elect at that meeting or any other
meeting, such other officers and agents as it shall deem necessary or
appropriate. Each officer of the Corporation shall exercise such powers and
perform such duties as shall be determined from time to time by the Board of
Directors together with the powers and duties which are customarily exercised
by such officer; and each officer of the Corporation shall hold office until
such officer's successor is elected and qualified or until such officer's
earlier resignation or removal. Any officer may resign at any time upon
written notice to the Corporation. The Board of Directors may at any time,
with or without cause, by the affirmative vote of a majority of directors then
in office, remove an officer.
Section 3. Chairman of the Board. The Chairman of the Board shall
---------------------
preside at all meetings of the stockholders and the Board of Directors and
shall have such other duties and powers as may be prescribed by the Board of
Directors from time to time.
Section 4. President. The President shall be the chief executive
---------
officer of the Corporation, shall have general and active management of the
business of the Corporation and shall see that all orders and resolutions of
the Board of Directors are carried into effect. The President shall have and
exercise such further powers and duties as may be specifically delegated to or
vested in the President from time to time by these By-laws or the Board of
Directors. In the absence of the Chairman of the Board or in the event of his
inability or refusal to act, or if the Board has not designated a Chairman,
the President shall perform the duties of the Chairman of the Board, and when
so acting, shall have the powers and be subject to all of the restrictions
upon the Chairman of the Board.
Section 5. Vice President. In the absence of the President or in
--------------
the event of his inability or refusal to act, the Vice President (or in the
event that there be more than one Vice President, the Vice Presidents in the
order designated by the Board of Directors, or in the absence of any
designation, then in the order of their election) shall perform the duties of
the President, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. The Vice Presents shall perform
such other duties and have such other powers as the Board of Directors or the
President may from time to time prescribe.
<PAGE>
Section 6. Secretary. The Secretary shall attend all meetings of
---------
the Board of Directors and all meetings of the stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
the President. If the Secretary shall be unable or shall refuse to cause to
be given notice of all meetings of the stockholders and special meetings of
the Board of Directors, and if there be no Assistant Secretary, then either
the Board of Directors or the President may choose another officer to cause
such notice to be given. The Secretary shall have custody of the seal of the
Corporation and the Secretary or any Assistant Secretary, if there be one,
shall have authority to affix same to any instrument requiring it and when so
affixed, it may be attested to by the signature of the Secretary or by the
signature of any such Assistant Secretary. The Board of Directors may give
general authority to any other officer to affix the seal of the Corporation
and to attest to the affixing by his or her signature. The Secretary shall
see that all books, reports, statements, certificates and other documents and
records required by law to be kept or filed are properly kept or filed, as the
case may be.
Section 7. Treasurer. The Treasurer shall have the custody of the
---------
corporate funds and securities and shall keep complete and accurate accounts
of all receipts and disbursements of the Corporation, and shall deposit all
monies and other valuable effects of the Corporation in its name and to its
credit in such banks and other depositories as may be designated from time to
time by the Board of Directors. The Treasurer shall disburse the funds of the
Corporation, taking proper vouchers and receipts for such disbursements, and
shall render to the Board of Directors, at its regular meetings, or when the
Board of Directors so requires, an account of all his or her transactions as
Treasurer and of the financial condition of the Corporation. The Treasurer
shall, when and if required by the Board of Directors, give and file with the
Corporation a bond, in such form and amount and with such surety or sureties
as shall be satisfactory to the Board of Directors, for the faithful
performance of his or her duties as Treasurer. The Treasurer shall have such
other powers and perform such other duties as the Board of Directors or the
President shall from time to time prescribe.
Section 8. Other Officers. Such other officers as the Board of
--------------
Directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and
powers.
<PAGE>
Section 9. Resignations. Any officer may resign at any time by
------------
giving written notice of his resignation to the Corporation. For purposes of
this Section, notice to the Board of Directors, the Chairman of the Board, the
President or the Secretary shall be deemed to constitute notice to the
Corporation. Such resignation shall take effect at the time specified therein
or, if the time when it shall become effective shall not be specified therein,
immediately upon its receipt, and, unless otherwise specified therein, the
acceptance of a resignation shall not be necessary to make it effective.
Section 10. Removal. Any officer or agent may be removed, either
-------
with or without cause, at any time, by the Board of Directors at any meeting
called for that purpose; provided, however, that the President may remove any
agent appointed by him.
Section 11. Vacancies. Any vacancy among the officers, whether
---------
caused by death, resignation, removal or any other cause, shall be filled in
the manner which is prescribed for election or appointment to such office.
ARTICLE V
Provisions Relating to Stock Certificates and Stockholders
----------------------------------------------------------
Section 1. Certificates. Certificates for the Corporation's
------------
capital stock shall be in such form as required by law and as approved by the
Board of Directors. Each certificate shall be signed in the name of the
Corporation by the Chairman of the Board of Directors, the President or any
Vice President and by the Secretary, the Treasurer, any Assistant Secretary or
any Assistant Treasurer and may bear the seal of the Corporation or a
facsimile thereof. Any or all of the signatures on a certificate may be a
facsimile. In case any officer, transfer agent or registrar who shall have
signed or whose facsimile signature shall have been placed on any certificate
shall have ceased to be such officer, transfer agent or registrar before the
certificate shall be issued, the certificate may be issued by the Corporation
with the same effect as if he were such officer, transfer agent or registrar
at the date of issue.
Section 2. Replacement Certificates. The Corporation may issue a
------------------------
new certificate of stock in place of any certificate previously issued by it,
alleged to have been lost, stolen or destroyed, and the Board of Directors may
require the owner of the lost, stolen or destroyed certificate, or such
person's legal representative, to make an affidavit of that fact and to give
the Corporation a bond sufficient to indemnify the Corporation against any
claim that may be made against it on account of the alleged loss, theft or
destruction of the certificate or the issuance of such new certificate.
<PAGE>
Section 3. Transfers of Shares. Transfers of shares shall be
-------------------
registered on the books of the Corporation maintained for that purpose after
due presentation of the stock certificates therefor, appropriately endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer.
Section 4. Record Date. For the purpose of determining the
-----------
stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in
writing without a meeting, or for the purpose of determining stockholders
entitled to receive payment of any dividend or other distribution or the
allotment of any rights, or for the purpose of any other action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board, and
which record date shall not be more than sixty (60) or less than ten (10) days
before the date of any such meeting, shall not be more than ten (10) days
after the date on which the Board fixes a record date for any such consent in
writing, and shall not be more than sixty (60) days prior to any other action.
Section 5. Dividends. To the extent permitted by law, the Board of
---------
Directors shall have full power and discretion, subject to the provisions of
the Certificate of Incorporation of the Corporation and the terms of any other
corporate document or instrument binding upon the Corporation, to determine
what, if any, dividends or distributions, which may be paid in cash, property,
shares of the capital stock of the Corporation or any combination thereof,
shall be declared and paid or made.
ARTICLE VI
Indemnification
---------------
Section 1. Indemnification. Unless otherwise determined by the
---------------
Board of Directors, the Corporation shall, to the fullest extent permitted by
the DGCL (including, without limitation, Section 145 thereof) or other
provisions of the laws of Delaware relating to indemnification of directors,
officers, employees and agents, as the same may be amended and supplemented
from time to time, indemnify any and all such persons whom it shall have power
to indemnify under the DGCL or such other provisions of law.
Section 2. Statutory Indemnification. Without limiting the
-------------------------
generality of Section 1 of this Article VI, to the fullest extent permitted,
and subject to the conditions imposed, by law, and pursuant to Section 145 of
the DGCL, unless otherwise determined by the Board of Directors:
<PAGE>
(i) the Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative (other than an action by
or in the right of the Corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if such person acted
in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful; and
(ii) the Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of
the fact that such person is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such
action or suit if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Corporation, except as otherwise provided by law.
Section 3. Indemnification by Resolution of Stockholders or
------------------------------------------------
Directors or Agreement. To the fullest extent permitted by law,
- ----------------------
indemnification may be granted, and expenses may be advanced, to the persons
described in Section 145 of the DGCL or other provisions of the laws of
Delaware relating to indemnification and advancement of expenses, as from time
to time may be in effect, by (i) a resolution of stockholders, (ii) a
resolution of the Board of Directors, or (iii) an agreement providing for such
indemnification and advancement of expenses, provided that no indemnification
may be made to or on behalf of any person if a judgment or other final
adjudication adverse to the person establishes that such person's acts were
committed in bad faith or were the result of active and deliberate dishonesty
and were material to the cause of action so adjudicated, or that such person
personally gained in fact a financial profit or other advantage to which such
person was not legally entitled. If it is subsequently determined that any
person who was indemnified or to whom expenses were advanced in accordance
with the provisions of this Article VI was not entitled to such
indemnification or advancement of expenses or both, by reason of the person
<PAGE>
having acted in bad faith or with active and deliberate dishonesty, or having
personally gained a financial profit or other advantage to which such person
was not legally entitled or otherwise, then such person shall promptly
reimburse the Corporation for all such fees and expenses previously paid by
the Corporation.
Section 4. General. It is the intent of this Article VI to require
-------
the Corporation, unless otherwise determined by the Board of Directors, to
indemnify the persons referred to herein for judgments, fines, penalties,
amounts paid in settlement and expenses (including attorneys' fees), and to
advance expenses to such persons, in each and every circumstance in which such
indemnification and such advancement of expenses could lawfully be permitted
by express provision of by-laws, and the indemnification and expense
advancement provided by this Article VI shall not be limited by the absence of
an express recital of such circumstances. The indemnification and advancement
of expenses provided by, or granted pursuant to, these By-laws shall not be
deemed exclusive of any other rights to which a person seeking indemnification
or advancement of expenses may be entitled, whether as a matter of law, under
any provision of the Certification of Incorporation of the Corporation or
these By-laws, by agreement, by vote of stockholders or disinterested
directors of the Corporation or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
Section 5. Indemnification Benefits. Indemnification pursuant to
------------------------
these By-laws shall inure to the benefit of the heirs, executors,
administrators and personal representatives of those entitled to
indemnification.
Section 6. Insurance and Trust Fund. In furtherance and not in
------------------------
limitation of the powers conferred by statute:
(1) the Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is serving at the request
of another corporation as director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against him and incurred
by him in any such capacity, or arising out of his power to
indemnify him against such liability under the provisions of law;
and
(2) the Corporation may create a trust fund, grant a
security interest and/or use other means (including, without
limitation, letters of credit, surety bonds, and/or other similar
arrangements), as well as enter into contracts providing
indemnification to the fullest extent permitted by law and including
<PAGE>
as part thereof provisions with respect to any or all of the
foregoing, to ensure the payment of such amount as may become
necessary to effect indemnification as provided therein, or
elsewhere.
ARTICLE VII
Approval of Certain Corporate Action
------------------------------------
Section 1. Mergers, Consolidations, Etc. The affirmative vote of
-----------------------------
at least a majority of the directors shall be required for the approval of any
(i) merger, (ii) consolidation, (iii) restructuring, (iv) recapitalization,
(v) issuance of Common Stock, (vi) sale of all or substantially all of the
assets of, or a majority of the capital stock of, any "significant subsidiary"
of the Corporation (as defined in Regulation S-X promulgated by the Securities
and Exchange Commission), if any, (vii) repurchase by the Corporation of
shares of capital stock or other securities of the Corporation, or (viii)
sale, transfer or other conveyance of assets outside the ordinary course of
business of the Corporation or any subsidiary which assets have a book value,
or sale price, whichever is greater, in excess of [$600,000].
----------
Section 2. Agreements for the Payment of Fees. All agreements for
----------------------------------
consulting services, employment agreements, or other agreements for the
payment of fees, in any case providing for payments by the Corporation in
excess of [$125,000], shall be subject to the express approval of the Board of
----------
Directors of the Corporation.
ARTICLE VIII
General Provisions
------------------
Section 1. Seal. The Corporation's seal shall be in such form as
----
is required by law and as shall be approved by the Board of Directors.
Section 2. Fiscal Year. The fiscal year of the Corporation shall
-----------
be determined by the Board of Directors.
Section 3. Voting Upon Shares Held by the Corporation. Unless
------------------------------------------
otherwise provided by law or by the Board of Directors, the Chairman of the
Board of Directors, if one shall be elected, or the President, if a Chairman
of the Board of Directors shall not be elected, acting on behalf of the
Corporation, shall have full power and authority to attend and to act and to
<PAGE>
vote at any meeting of stockholders of any corporation in which the
Corporation may hold stock and, at any such meeting, shall possess and may
exercise any and all of the rights and powers incident to the ownership of
such stock which, as the owner thereof, the Corporation might have possessed
and exercised, if present. The Board of Directors by resolution from time to
time may confer like powers upon any other person or persons.
Section 4. Checks, Drafts, Notes. All checks, drafts or other
---------------------
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the Corporation shall be signed by such officer or
officers, agent or agents of the Corporation, and in such manner as shall from
time to time be determined by resolution (whether general or special) of the
Board of Directors or may be prescribed by any officer or officers, or any
officer and agent jointly, thereunto duly authorized by the Board of
Directors.
ARTICLE IX
Amendments
----------
Section 1. By-laws. These By-laws may be adopted, amended or
-------
repealed by the Board of Directors, provided the conferral of such power on
the Board shall not divest the stockholders of the power, or limit their
power, to adopt, amend or repeal these By-laws.
<PAGE>
Exhibit J
SUBSCRIPTION RIGHTS AGREEMENT
SUBSCRIPTION RIGHTS AGREEMENT (the "Agreement"), dated as of
, 1997, by and between WRT Energy Corporation, a Texas corporation (the
"Company"), and (the "Disbursing Agent") acting on behalf of the
Holders (defined below).
W I T N E S S E T H:
WHEREAS, on February 14, 1996, the Company filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy
Court commencing the Chapter 11 Case (Case No. 96BK-50212);
WHEREAS, since the commencement of the Chapter 11 Case, the Company
has operated its business and held its assets and properties as a debtor-in-
possession under Section 1107 of the Bankruptcy Code;
WHEREAS, in order to emerge from bankruptcy, Debtor's and DLBW's
[First] Amended Joint Plan of Reorganization Under Chapter 11 of the United
States Bankruptcy Code (the "Plan") has been filed with the Bankruptcy Court;
WHEREAS, certain creditors of the Company will posses claims on the
Subscription Rights Record Date that are not secured by assets of the Company,
such claims having been classified in the Plan as Allowed Claims in Class D-3
(the "Claims Holders") or as Disputed Claims within or potentially within
Class D-3 (the "Disputed Claims Holders"; and together with the Claims
Holders, the "Holders");
WHEREAS, in connection with the execution and delivery of the Plan,
the Company will issue up to [4,000,000] common stock purchase rights as
hereinafter described (the "Subscription Rights") to purchase up to an
aggregate of [4,000,000] shares of New WRT Subscription Common Stock to the
Claims Holders and up to [ ] common stock purchase rights as
hereinafter described (the "Disputed Subscription Rights") to purchase up to
an aggregate of [ ] shares of Disputed New WRT Subscription Common
Stock to the Disputed Claims Holders, as is fully set forth in Articles 18.2
and 29 of the Plan;
WHEREAS, the Disbursing Agent has been approved by the Bankruptcy
Court to receive on behalf of the Claims Holders the shares of New WRT
Subscription Common Stock and on behalf of the Disputed Claims Holders the
Disputed New WRT Subscription Common Stock and to disburse such shares to the
Holders as provided for in the Plan;
NOW, THEREFORE, in consideration of the foregoing and for the
purpose of defining the terms and provisions of the Subscription Rights, the
Disputed Subscription Rights and the respective rights and obligations
thereunder of the Company and the Holders, the parties hereto hereby agrees as
follows:
<PAGE> 1
SECTION 1
DEFINITIONS
All capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Plan.
SECTION 2
INITIAL ISSUANCE OF RIGHTS; TRANSFER OF RIGHTS
2.1 Initial Issuance of Rights. On and after the Subscription
Rights Record Date, the Subscription Rights and the Disputed Subscription
Rights shall be issued or deemed issued to the Holders in accordance with
Article 29 of the Plan. On the Subscription Rights Record Date, the Company
shall distribute to each Holder an election form (the "Subscription Rights
Election Form") which form shall state, among other things, the number of
Subscription Rights and/or Disputed Subscription Rights that such Holder is
entitled to. The Subscription Rights and the Disputed Subscription Rights
shall be evidenced, subject to the provisions of Section 3 hereof, by the
registration of the Holders in the Subscription Rights Register (as defined in
Section 3 hereof) and not by separate certificates.
2.2 Transfer of Rights. The Subscription Rights and Disputed
Subscription Rights registered in the names of the Holders shall not be
transferable.
SECTION 3
REGISTRATION OF RIGHTS
The Subscription Rights and Disputed Subscription Rights issued to
Holders shall be registered in a register (the "Subscription Rights Register")
on the Subscription Rights Record Date. The Company and New WRT shall keep
the Subscription Rights Register at its principal office in Houston, Texas.
The Subscription Rights Register shall show the names and addresses of the
Holders and the number of Subscription Rights and/or Disputed Subscription
Rights held by each Holder. The Company and New WRT shall be entitled to
treat the Holder of any Subscription Rights or Disputed Subscription Rights as
the owner in fact thereof for all purposes and shall not be bound to recognize
any equitable or other claim to or interest in such Subscription Rights or
Disputed Subscription Rights on the part of any other person, notwithstanding
any notice to the Company or New WRT to the contrary.
SECTION 4
TERM OF RIGHTS; EXERCISE OF SUBSCRIPTION RIGHTS; EXERCISE OF
DISPUTED SUBSCRIPTION RIGHTS; FAILURE TO PROPERLY EXERCISE;
DIVIDENDS; DE MINIMUS DISTRIBUTIONS
<PAGE> 2
4.1 Term of Subscription Rights. (a) Subject to the terms of
this Agreement, each Holder shall have the right until the Subscription Rights
Election Deadline to subscribe to purchase from the Company the number of
fully paid and nonassessable shares of New WRT Subscription Common Stock and
Disputed New WRT Subscription Common Stock representing such Holder's Interim
Pro Rata Share (with any fractions being rounded down to the nearest whole
number) upon surrender to the Disbursing Agent of (a) a duly completed and
executed Subscription Rights Election Form which shall include (i) the name of
the Holder, (ii) an election to exercise the right of purchase represented by
the Subscription Rights and/or Disputed Subscription Rights, (iii) the number
of shares of New WRT Subscription Common Stock and/or Disputed New WRT
Subscription Common Stock to be purchased, (iv) the names, addresses and
social security numbers of the individuals to receive the certificates of such
shares and (v) the signature of the Holder (which signature shall be
guaranteed by a bank or trust company located in the United States or a broker
or dealer that is a member of a national securities exchange); and (b) payment
of the Subscription Purchase Price and/or the Disputed Subscription Purchase
Price to the Disbursing Agent in immediately available funds either by wire
transfer to the Subscription Rights Reserve Account in accordance with the
wire instructions set forth on the Subscription Rights Election Form or by
certified or bank check made payable in accordance with the instructions set
forth on the Subscription Rights Election Form.
(b) In order for any exercise of rights to be considered, the
Subscription Rights Election Form and the Subscription Purchase Price and/or
the Disputed Subscription Purchase Price must be received by the Disbursing
Agent on or before the Subscription Rights Election Deadline. To the extent
that the Subscription Rights Election Form or the Subscription Purchase Price
and/or the Disputed Subscription Purchase Price for any Holder is received
after the Subscription Rights Election Deadline, such Holder shall be deemed
to have not exercised its Subscription Rights and/or Disputed Subscription
Rights and the Disbursing Agent shall promptly return to the applicable
Holders any Subscription Purchase Price and/or any Disputed Subscription
Purchase Price received on behalf of such Holders.
4.2 Exercise of Subscription Rights. Subject to Section 5 hereof,
after such delivery of the Subscription Rights Election Form exercising the
Subscription Rights and payment of the Subscription Purchase Price to the
Disbursing Agent as aforesaid, New WRT shall issue and the Disbursing Agent
shall cause to be delivered as soon as practicable on or after the Effective
Date, but in no event more than ten (10) Business Days after the Effective
Date, to the address(es) and in such name(s) as the Claims Holder shall have
designated in the applicable Subscription Rights Election Form, a certificate
or certificates for the number of full shares of New WRT Subscription Common
Stock so purchased upon the exercise of such Subscription Rights. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such shares of New WRT Subscription Common Stock as of the Effective
Date. [The rights of purchase represented by the Subscription Rights shall be
<PAGE> 3
exercisable, at the election of the Claims Holders thereof, either is full or
from time to time in part, but in no event after the Subscription Rights
Election Deadline].
4.3 Exercise of Disputed Subscription Rights. (a) Subject to
Section 5 hereof, after such delivery of the Subscription Rights Election Form
exercising the Disputed Subscription Rights and payment of the Disputed
Subscription Purchase Price to the Disbursing Agent as aforesaid, New WRT
shall issue and the Disbursing Agent shall cause to be delivered as soon as
practicable on or after such time (a "Determination Date") as all or any
portion of an Exercised Disputed Claim becomes an Allowed Claim (an "Allowed
Disputed Claim"), but in no event more than ten (10) Business Days after such
Determination Date, (i) to the address(es) and in such name(s) as the Disputed
Claims Holder shall have designated in the Subscription Rights Election Form,
a certificate or certificates for the number of full shares (with any
fractions being rounded down to the nearest whole number) of Disputed New WRT
Subscription Common Stock that equals the number of shares so purchased upon
the exercise of the Disputed Subscription Rights that have become an Allowed
Disputed Claim, and (ii) to DLBW, the Disputed Subscription Purchase Price for
the Disputed New WRT Subscription Common Stock so delivered to the Holder.
Such certificate or certificates shall be deemed to have been issued and any
person so designated to be named therein shall be deemed to have become a
holder of record of such shares of Disputed New WRT Subscription Common Stock
as of the Determination Date. [The rights of purchase represented by the
Disputed Subscription Rights shall be exercisable, at the election of the
Disputed Claims Holders thereof, either is full or from time to time in part,
but in no event after the Subscription Rights Election Deadline].
(b) Subject to Section 5 hereof, after such delivery of the
Subscription Rights Election Form exercising the Disputed Subscription Rights
and payment of the Disputed Subscription Purchase Price to the Disbursing
Agent as aforesaid, New WRT shall issue and the Disbursing Agent shall cause
to be delivered as soon as practicable on or after any time (a "Denial Date")
as all or any portion of an Exercised Disputed Claim is determined not to be
an Allowed Claim (a "Denied Disputed Claim"), but in no event more than ten
(10) Business Days after such Denial Date, (i) to the address(es) and in such
name(s) as DLBW shall have designated, a certificate or certificates for the
number of full shares (with any fractions being rounded down to the nearest
whole number) of Disputed New WRT Subscription Common Stock that equals the
number of shares that the Disputed Claims Holder elected to purchase upon the
exercise of the Disputed Subscription Rights that have become a Denied
Disputed Claim and (ii) to the applicable Disputed Claims Holder, the Disputed
Subscription Purchase Price for the Disputed New WRT Subscription Common Stock
so delivered to DLBW. Such certificate or certificates shall be deemed to
have been issued and any person so designated to be named therein shall be
deemed to have become a holder of record of such shares of Disputed New WRT
Subscription Common Stock as of the Denial Date.
4.4 Failure to Properly Exercise. (a) If any Holder exercising
Subscription Rights or Disputed Subscription Rights does not indicate on the
Subscription Rights Election Form the number of Subscription Rights and/or
<PAGE> 4
Disputed Subscription Rights being exercised, or does not forward full payment
of the aggregate Subscription Purchase Price and/or Disputed Subscription
Purchase Price for the number of Subscription Rights and/or Disputed
Subscription Rights that the Holder indicates are being exercised, then the
Holder shall be deemed to have exercised the Subscription Rights and/or
Disputed Subscription Rights with respect to the maximum number of
Subscription Rights and/or Disputed Subscription Rights that may be exercised
for the aggregate Subscription Purchase Price and/or Disputed Subscription
Purchase Price delivered by the Holder.
(b) To the extent that the aggregate payment delivered by the
Holder exceeds the appropriate Subscription Purchase Price and Disputed
Subscription Purchase Price, such excess payment shall be returned promptly to
the Holder.
(c) If any Holder is exercising both Subscription Rights and
Disputed Subscription Rights, then the payment received shall first be applied
to the exercise of Subscription Rights and to the extent that the payment
exceeds the Subscription Purchase Price, the excess shall then be applied to
the exercise of Disputed Subscription Rights.
4.5 Dividends. All dividends or distributions on account of
shares of Disputed New WRT Subscription Common Stock shall be held in trust by
the Disbursing Agent and shall be distributed along with the applicable shares
of Disputed New WRT Subscription Common Stock.
4.6 De Minimus Distributions. No Holder whose Interim Pro Rata
Share of the Subscription Rights and/or Disputed Subscription Rights would
entitle such Holder to purchase fewer than five (5) shares of New WRT
Subscription Common Stock and Disputed New WRT Subscription Common Stock shall
be entitled to receive any Subscription Rights and/or Disputed Subscription
Rights pursuant to this Agreement or the Plan.
SECTION 5
PAYMENT OF TAXES
The Company and New WRT shall pay all documentary stamp taxes, if
any, attributable to the initial issuance of shares of New WRT Subscription
Common Stock issuable upon the exercise of Subscription Rights and the initial
issuance of shares of Disputed New WRT Subscription Common Stock issuable upon
the exercise of Disputed Subscription Rights to the Holders; provided,
however, that the Company and New WRT shall not be required to pay, and the
Holders shall pay, any tax or taxes that may be payable in respect of any
transfer involved in the issue or delivery of any certificates for shares of
New WRT Subscription Common Stock and/or Disputed New WRT Subscription Common
Stock in a name other than that of the registered Holder of the Subscription
Rights and/or Disputed Subscription Rights that were exercised.
<PAGE> 5
SECTION 6
ISSUANCE OF NEW WRT SUBSCRIPTION COMMON STOCK AND
DISPUTED NEW WRT SUBSCRIPTION COMMON STOCK
6.1 Issuance of New WRT Subscription Common Stock. On the
Effective Date, New WRT shall issue out of its authorized common stock
[4,000,000] shares of New WRT Subscription Common Stock. Such shares shall be
delivered to the Disbursing Agent for distribution as provided in Section 4.2
hereof and in Article 29 of the Plan.
6.2 Issuance of Disputed New WRT Subscription Common Stock. On
any applicable Determination Date or Denial Date, New WRT shall issue out of
its authorized common stock shares of Disputed New WRT Subscription Common
Stock equal to the number of shares represented by an Allowed Disputed Claim
or a Denied Disputed Claim on such date. Such shares shall be delivered to
the Disbursing Agent for distribution as provided in Section 4.3 hereof and in
Article 29 of the Plan.
6.3 Issuance of New WRT Common Stock By Transfer Agent. The
Disbursing Agent is hereby irrevocably authorized to requisition from time to
time from New WRT and the transfer agent for the New WRT Subscription Common
Stock and the Disputed New WRT Subscription Common Stock (the "Transfer
Agent") stock certificates in the name of the Holders receiving such shares
upon the exercise of the Subscription Rights and/or the Disputed Subscription
Rights in accordance with the terms of this Agreement.
SECTION 7
RESERVATION OF SHARES OF DISPUTED NEW WRT SUBSCRIPTION COMMON STOCK
On the Effective Date and at all times until all outstanding
Disputed Subscription Rights shall either have become an Allowed Disputed
Claim or a Denied Disputed Claim (the "Final Determination Date"), New WRT
shall reserve out of its authorized New WRT Common Stock a number of shares
sufficient to provide for the exercise of the right of purchase represented by
the outstanding Disputed Subscription Rights. The Transfer Agent and every
subsequent transfer agent for any shares of New WRT's capital stock issuable
upon the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be requisite for such purpose. New WRT will keep a
copy of this Agreement on file with the Transfer Agent and with every
subsequent transfer agent for any shares of New WRT's capital stock issuable
upon the exercise of the rights of purchase represented by the Disputed
Subscription Rights. Promptly after the Final Determination Date, New WRT
shall certify to the Transfer Agent that all Disputed New WRT Subscription
Common Stock has been distributed by the Disbursing Agent and thereafter no
shares shall be subject to reservation in respect of such Disputed
Subscription Rights.
<PAGE> 6
SECTION 8
NO RIGHTS AS STOCKHOLDERS
Nothing contained in this Agreement or in any of the Subscription
Rights or Disputed Subscription Rights shall be construed as conferring upon
the Holders the right to vote or to receive dividends or to consent to or to
receive notice as stockholders in respect of any meeting of stockholders for
the election of directors of the Company or New WRT or any other matter, or
any rights whatsoever as stockholders of the Company or New WRT.
SECTION 9
INSPECTION OF RIGHTS AGREEMENT
The Company shall keep copies of this Agreement, any notices given
or received hereunder and any other documents related hereto and required to
be held by the Company available for inspection by the Holders during normal
business hours at its principal office in Houston, Texas.
SECTION 10
METHOD OF DELIVERY
The method of delivery of the Subscription Rights Election Form and
the payment of the Subscription Purchase Price and/or the Disputed
Subscription Price to the Disbursing Agent are at the election and risk of the
Holders. Holders are urged to allow a sufficient amount of time to ensure
delivery of the Subscription Rights Election Form and the Subscription
Purchase Price and/or the Disputed Subscription Price to the Disbursing Agent.
SECTION 11
FAILURE OF EFFECTIVE DATE TO OCCUR
On and after the Subscription Rights Election Deadline, if the
Company or New WRT determines in its sole discretion that it is unlikely that
there will be an Effective Date under the Plan, then the Company or New WRT
shall instruct the Disbursing Agent to return the Subscription Purchase Price
and/or the Disputed Subscription Purchase Price to the Holders.
SECTION 12
INTEREST
No interest shall accrue and be payable hereunder at any time with
respect to funds delivered in payment of the Subscription Purchase Price and
the Disputed Subscription Purchase Price.
<PAGE> 7
SECTION 13
VALIDITY OF EXERCISES
All questions concerning the timeliness, validity, form and
eligibility of any exercise of Subscription Rights and Disputed Subscription
Rights will be determined by the Company or New WRT, in its sole discretion,
whose determination shall be final and binding. The Company and New WRT
reserve the absolute right to reject any subscription if such subscription is
not in proper form or if the acceptance thereof or the issuance of New WRT
Subscription Common Stock or Disputed New WRT Subscription Common Stock
pursuant thereto could, in the opinion of the Company's or New WRT's counsel,
be deemed unlawful. The Company also reserves the right to waive any defect
with regard to any particular subscription or to reject any purported
subscription by reason of any defect or irregularity in such exercise.
Neither the Company, New WRT nor the Disbursing Agent shall be under any duty
to give notification of any defects or irregularities in subscriptions, nor
shall any of them incur any liability for failure to give such notification.
SECTION 14
NO REVOCATION
After any Holder has exercised any Subscription Right and/or any
Disputed Subscription Right, such exercise may not be revoked by such Holder.
SECTION 15
NOTICES
Any notice, demand, claim or other communications under this
Agreement shall be in writing and shall be deemed to have been given upon
personal delivery thereof, or upon receipt thereof if sent by registered mail,
return receipt requested, postage prepaid, or upon confirmation of delivery
thereof by courier service, if sent by recognized overnight courier service,
to the respective address of the parties set forth below (or such other
address as a party may specify by notice given as herein provided):
(a) If to the Company or New WRT,
to:
WRT Energy Corporation
5718 Westheimer, Suite 1201
Houston, Texas 77057
Attention: Mr. Raymond P. Landry
Copies to:
Sheinfeld, Maley, & Kay, P.C.
1001 Fannin Street, Suite 3700
Houston, Texas 77002-6797
Attention: Joel P. Kay, Esq.
<PAGE> 8
and
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Attention: Jeffrey S. Sabin, Esq.
(b) If to the Disbursing Agent, to:
______________________
______________________
______________________
Attention: ______________
(c) If to any Holder, to:
The address of such Holder as
reflected in the Rights Register.
SECTION 16
SUPPLEMENTS AND AMENDMENTS
The Company may from time to time supplement or amend this Agreement
without the approval of any Holder in order to cure any ambiguity or to
correct or supplement any provision contained herein that may be defective or
inconsistent with any other provisions herein or to make any other provisions
with regard to matters or questions arising hereunder that the Company may
deem necessary or desirable and that shall not adversely affect the interests
of the Holders.
SECTION 17
SUCCESSORS
This Agreement and all the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
(including, without limitation, any trustee of the Company and New WRT) and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder may be assigned by any of the parties hereto without
the prior written consent of the other parties.
SECTION 18
APPLICABLE LAW
Except to the extent inconsistent with the Bankruptcy Code, this
Agreement and the legal relations between the parties hereto shall be governed
by, and construed and enforced in accordance with, the laws of the State of
New York, without giving effect to the provisions, principles or policies
thereof respecting conflict or choice of laws.
<PAGE> 9
SECTION 19
BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give any person or
corporation other than the Company, New WRT and the Holders any legal or
equitable right, remedy or claim under the Agreement; and this Agreement shall
be for the sole and exclusive benefit of the Company, New WRT, the Holders and
their respective successors and assigns hereunder.
SECTION 20
COUNTERPARTS
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
SECTION 21
CAPTIONS
The captions of the Sections and Subsections of this Agreement have
been inserted for convenience only and shall not affect the interpretation
hereof.
SECTION 22
SEVERABILITY
In the event any term, provision, covenant or restriction of this
Agreement shall, for any reason, be held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other term or provision of this
Agreement and 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. It is hereby stipulated and
declared to be the intention of the Company and the Holders that they would
have executed the remaining terms, provisions, covenants and restrictions of
this Agreement without including any of such provisions that may be hereafter
declared invalid, illegal, void or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
<PAGE> 10
WRT ENERGY CORPORATION
By: ____________________________________
Name:
Title:
__________________, as Disbursing
Agent
By: ____________________________________
Name:
Title:
<PAGE> 11
Exhibit K
LIQUIDATING TRUST AGREEMENT
This LIQUIDATING TRUST AGREEMENT, dated as of July 10, 1997 (the
"Agreement"), is by and among WRT Energy Corporation ("the Debtor") and Goldin
Associates L.L.C., as Trustee (the "Trustee").
RECITALS
WHEREAS, on or about May 2, 1997, the United States Bankruptcy Court
for the Western District of Louisiana, Lafayette-Opelousas Division (the
"Bankruptcy Court") entered an order confirming the Second Amended Joint Plan
of Reorganization Under Chapter 11 of the United States Bankruptcy Code, dated
March 11, 1997 and as amended on April 28, 1997 (as may thereafter be amended,
restated or otherwise modified, the "Plan"), filed by the Debtor, DLB Oil &
Gas, Inc. and Wexford Management LLC; and
WHEREAS, pursuant to the Plan, (i) the Debtor's Causes of Action
(other than the Marine Equipment Causes of Action and the Tri-Deck Causes of
Action) (collectively, the "Trust Actions"), (ii) the distribution of the net
proceeds realized from the prosecution of the Trust Actions (the "Proceeds")
and (iii) the net proceeds, if any, realized from the sale of any equipment,
title to which is obtained by New WRT as a result of the Marine Equipment
Causes of Action, sold within six months following such acquisition of title
(the "MEC Proceeds"), has been, on the date hereof, assigned to the WRT
Creditors Liquidation Trust created by this Agreement (the "Trust"), on behalf
of and for the benefit of the holders of Allowed Claims in Class D-3 under the
Plan and each of their respective successors, heirs and assigns (collectively,
the "Beneficiaries"), by the Debtor in accordance with sections 1123(b)(3)(B)
and 1145(a)(1) of the Bankruptcy Code; and
WHEREAS, the Trust is being created pursuant to this Agreement for
the sole purpose of coordinating the prosecution, direction, settlement or
expeditious compromise of the Trust Actions on behalf of and for the benefit
of the Beneficiaries and to distribute the Proceeds to the Beneficiaries in
accordance herewith; and
WHEREAS, pursuant to Article 33.15 of the Plan, the Debtor is deemed
to have granted, assigned, transferred, conveyed and delivered to the Trustee,
on behalf of and for the benefit of the Beneficiaries, control of, and all of
the Debtor's right, title and interest in, the Trust Actions and to the
Proceeds and, the MEC Proceeds; and
WHEREAS, pursuant to Article 33.16 of the Plan, the costs of the
Trust shall be funded by a one time capital contribution (the "Initial
Contribution") of $3 million to be made by New WRT; and
WHEREAS, Bankruptcy Court shall have jurisdiction over the Trust,
the Trustee, the Trust Actions and the remaining Trust Assets, as provided
herein.
<PAGE> 1
DECLARATION OF TRUST
NOW THEREFORE, in order to declare the terms and conditions hereof,
and in consideration of the Recitals, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and subject to the terms and conditions of the Plan and this Agreement, New
WRT has executed this Agreement and absolutely and irrevocably assigns to the
Trustee, and to its successors and assigns, on behalf of and for the benefit
of the Beneficiaries, the Initial Contribution and all right, title and
interest of New WRT in the Trust Actions, the Proceeds and the MEC Proceeds;
TO HAVE AND TO HOLD unto the Trustee and its successors in trust;
PROVIDED, HOWEVER, that upon termination of the Trust in accordance
with Section 4.01 hereof, this Agreement shall cease, terminate and be of no
further force and effect.
IT IS HEREBY FURTHER COVENANTED AND DECLARED, that the Trust
Actions, the Proceeds, the Initial Contribution, the MEC Proceeds and all
other property held from time to time by the Trustee under this Agreement and
any earnings thereon (collectively, the "Trust Assets") are to be held and
applied by the Trustee solely for the benefit of the Beneficiaries and for no
other party, subject to the further covenants, conditions and terms
hereinafter set forth.
ARTICLE I
DEFINITIONS
1.01 Certain Terms Defined. Terms defined in the Plan, and not
otherwise defined herein, shall, when used herein (including in the Recitals
hereto), have the meanings ascribed to such terms in the Plan.
1.02 Meanings of Other Terms. Except where the context
otherwise requires, words importing the masculine gender include the feminine
and the neuter, if appropriate, words importing the singular number shall
include the plural number and vice versa and words importing persons shall
include firms, associations, corporations and other entities. All references
herein to Articles, Sections and other subdivisions, unless referring
specifically to the Plan or provisions of the Bankruptcy Code, Bankruptcy
Rules or other law, statute or regulation, refer to the corresponding
Articles, Sections and other subdivisions of this Agreement, and the words
herein and words of similar import refer to this Agreement as a whole and not
to any particular Article, Section or subdivisions of this Agreement.
ARTICLE II
TRUSTEE'S ACCEPTANCE
2.01 Acceptance. The Trustee accepts the Trust created by this
Agreement and the transfer and assignment to the Trust, on behalf of and for
<PAGE> 2
the benefit of the holders of Allowed Class D-3 Claims and New WRT, of the
Initial Contribution, the Trust Actions, the Proceeds, and the MEC Proceeds as
set forth in the Plan, and agrees to observe and perform the Trust, upon and
subject to the terms and conditions set forth herein and in the Plan.
2.02 Purpose of Trust. The sole purpose of this Agreement is
to implement Articles 33.15 and 33.16 of the Plan by providing for the vesting
in the Trustee of the ownership of and the responsibility for the protection
and conservation of the Trust Assets on behalf of and for the benefit of the
Beneficiaries. Such responsibility shall be limited to the retention and
enforcement of the Trust Actions by the Trustee on behalf of and for the
benefit of the Beneficiaries, including the powers with respect thereto set
forth in Article VII hereof, the collection of the Proceeds, the temporary
investment thereof and other Trust moneys, including, but not limited to, the
Initial Contribution, as provided in Section 7.03 hereof, the payment of the
costs and expenses of Trust Actions, the making of any other payments provided
to be made from the Trust as set forth in the Plan and this Agreement and the
distribution of the Proceeds, any income earned thereon and other Trust moneys
to the Beneficiaries in accordance with the provisions of the Plan and this
Agreement.
2.03 Incidents of Ownership. The Beneficiaries shall be the
sole beneficiaries of the Trust and the Trustee shall retain only such
incidents of ownership as are necessary to undertake the actions and
transactions authorized herein on their behalf.
ARTICLE III
BENEFICIARIES
3.01 Beneficial Interests. The interest of each Beneficiary in
the Trust Assets (the "Beneficial Interest") shall be determined in the
following manner: (i) New WRT shall have a Beneficial Interest equal to 12% of
the Trust Assets; and (ii) each holder of an Allowed Claim in Class D-3 under
the Plan shall hold a share, as calculated pursuant to the provisions set
forth herein, of an aggregate Beneficial Interest equal to 88% of the Trust
Assets.
3.02 Certificates. (a) Beneficial Interests shall be evidenced
by Certificates of Beneficial Interest, in form and substance as set forth in
Exhibit A annexed hereto (the "Certificate"). Certificates shall be issued by
the Trustee in units of Beneficial Interest totaling 15,681,818 in number (the
"Units"). The Trustee shall issue one Certificate to each Beneficiary in a
denomination equal to the aggregate number of Units held by such Beneficiary
or, alternatively, at the request of the Beneficiary or at the option of the
Trustee, the Trustee may issue multiple Certificates to any Beneficiary which
Certificates shall, in the aggregate, equal the total number of Units held by
such Beneficiary. Notwithstanding the foregoing, the Trustee shall also issue
Certificates in a like manner to the Disbursing Agent to be held by it in
trust on behalf of and for the benefit of holders of (i) Disputed Claims which
would be classified as Class D-3 Claims under the Plan if Allowed
(collectively, the "Disputed Claims"), and (ii) to the extent such Disputed
Claims are disallowed, Allowed Claims, as provided herein.
<PAGE> 3
(b) As of the date hereof, New WRT has delivered to the
Trustee (i) a list of the names and addresses of each Person entitled to
receive Certificates as of the Effective Date in accordance with the Plan and
this Agreement and (ii) a list of the names and addresses of each Person
holding a Disputed Claim. The Trustee shall, as soon as practicable
hereafter, (x) issue and deliver Certificates to New WRT for 1,881,818 Units
which is the full Beneficial Interest held by New WRT, (y) issue and deliver
Certificates to each holder of Allowed Claims in Class D-3 of the Plan for a
number of Units evidencing each such holder's Beneficial Interest equal to the
aggregate number of shares of New WRT Common Stock received by such holder
pursuant to Article 18.1 of the Plan and the number of shares of New WRT
Subscription Common Stock received by such holder as of the Effective Date
pursuant to the exercise by such holder of New WRT Subscription Rights
(including Oversubscription Rights) pursuant to the Rights Offering, and (z)
issue and deliver Certificates to the Disbursing Agent for a number of Units
equal to the difference between 15,681,818 Units and the aggregate number of
Units issued pursuant to clauses (x) and (y) of this Section 3.02(b), to be
held by the Disbursing Agent in trust on behalf of and for the benefit of the
holders of Disputed Claims which become Allowed Claims and, to the extent that
Disputed Claims are disallowed, the holders of Allowed Claims, all as provided
for in the Disbursing Agent Agreement and the Plan (the Beneficiaries, their
successors and assigns and the Disbursing Agent, in its capacity as a holder
of Units pursuant to clause (z) of this sentence, are hereinafter collectively
referred to as the "Unit Holders").
(c) Certificates of each Unit Holder shall be recorded and
set forth in a register (the "Register") maintained by the Trustee or a duly
authorized agent of the Trustee expressly for such purpose.
(d) Beneficiaries may assign all or a portion of their
Units of Beneficial Interest as represented by their Certificates. The
transfer of a Certificate or any portion thereof shall be recorded in the
Register using the following procedure: (i) the holder of the Certificate
shall present it to the Trustee together with a written request to transfer
all or a portion thereof to the assignee; (ii) the Trustee shall issue a new
Certificate to the assignee for a number of Units equal to the number of Units
being assigned; and (iii) the Trustee shall, if necessary, issue a new
Certificate to the original holder for a number of Units equal to the number
of Units being retained by such holder. Notwithstanding any provision herein
to the contrary, the Trustee may refuse to record a transfer made pursuant to
this Section 3.02(d) if it reasonably believes that such a transfer may
constitute a violation of applicable laws or may subject the Beneficiaries or
the Trust to adverse tax consequences.
(e) If a Unit Holder claims that a Certificate has been
lost, destroyed or wrongfully taken, the Trustee shall issue and deliver to
such Unit Holder a replacement Certificate. The Trustee may require such Unit
Holder to provide an indemnity bond or other form of indemnity sufficient in
the Trustee's reasonable judgment to protect the Trustee from any loss which
it may suffer if the Certificate is replaced. The Trustee shall charge such
Unit Holder for its expenses in replacing a Certificate which has been
mutilated, lost, destroyed or wrongfully taken.
<PAGE> 4
(f) Fractional Units shall not be issued or disbursed.
Whenever the issuance or distribution of a fractional Unit would otherwise be
called for, the actual distribution of Units shall reflect a rounding down to
the nearest whole Unit.
3.03 Conflicting Claims. If any conflicting claims or demands
are made or asserted with respect to the Beneficial Interest represented by a
Certificate, or if there is any disagreement between the assignees,
transferees, heirs, representatives or legatees succeeding to all or a part of
a Beneficial Interest resulting in adverse claims or demands being made in
connection with such Interest, then, in any of such events, the Trustee shall
be entitled, at its sole election, to refuse to comply with any such
conflicting claims or demands. In so refusing, the Trustee may elect to make
no payment or distribution with respect to the Beneficial Interest represented
by the claims or demands involved, or any part thereof and to refer such
conflicting claims or demands to the Bankruptcy Court, which shall have
exclusive jurisdiction over resolution of such conflicting claims or demands.
In so doing, the Trustee shall not be or become liable to any of such parties
for its refusal to comply with any of such conflicting claims or demands, nor
shall the Trustee be liable for interest on any funds which it may so
withhold. The Trustee shall be entitled to refuse to act until either (i) the
rights of the adverse claimants have been adjudicated by a Final Order of the
Bankruptcy Court or (ii) all differences have been resolved by a valid written
agreement among all of such parties and the Trustee, which agreement shall
include a complete release of the Trustee.
3.04 Rights of Beneficiaries. Each Beneficiary shall be
entitled to participation in the rights and benefits due to a Beneficiary
hereunder according to its Beneficial Interest. Each Beneficiary shall take
and hold the same subject to all the terms and provisions of this Agreement.
The interest of a Beneficiary is hereby declared and shall be in all respects
personal property. Upon the death of an individual who is a Beneficiary, his
interest shall pass as personal property to his legal representative and such
death shall in no way terminate or affect the validity of this Agreement.
Upon the merger, consolidation or other similar transaction involving a
Beneficiary that is not an individual, such Beneficiary's interest shall be
transferred by operation of law and such transaction shall in no way terminate
or affect the validity of this Agreement. Except as expressly provided
hereunder, a Beneficiary shall have no title to, right to, possession of,
management of or control of the Trust. No widower, widow, heir or devisee of
any individual who may be a Beneficiary and no bankruptcy trustee, receiver or
similar person of any Beneficiary shall have any right, statutory or otherwise
(including any right of dower, homestead or inheritance, or of partition, as
applicable), in any property whatever forming a part of the Trust, but the
whole title to all the Trust's assets shall be vested in the Trustee and the
sole interest of the Beneficiaries shall be the rights and benefits given to
such persons under this Agreement and the Plan.
<PAGE> 5
ARTICLE IV
DURATION AND TERMINATION OF TRUST
4.01 Duration. The existence of the Trust shall terminate on
the earlier of: (a) the date on which all of the Trust Assets have been
liquidated and the proceeds thereof distributed to the Beneficiaries, or (b)
three years after the Effective Date; provided, however, that the Trustee may
extend the term of the Trust, provided that he receives Bankruptcy Court
approval for cause within six months from the beginning of the extended term.
Notwithstanding anything to the contrary in this Agreement, in no event shall
the Trustee unduly prolong the duration of the Trust, and the Trustee shall at
all times endeavor to prosecute, direct, settle or compromise expeditiously
the Trust Actions, so as to distribute the Proceeds to the Beneficiaries and
terminate the Trust as soon as practicable in accordance with this Agreement.
4.02 Termination by Beneficiaries. The Trust may not be
terminated at any time by the Beneficiaries.
4.03 Continuance of Trust for Winding Up. After the termination
of the Trust and solely for the purpose of liquidating and winding up the
affairs of the Trust, the Trustee shall continue to act as such until its
duties have been fully performed. Upon distribution of all Proceeds, the MEC
Proceeds and any investment income earned on Trust Assets not used to pay
expenses associated with prosecution of the Trust Actions (collectively, the
"Distributable Proceeds") and any remaining moneys or other assets, the
Trustee shall retain the books, records and files which shall have been
delivered to or created by the Trustee. At the Trustee's discretion, all of
such records and documents may be destroyed at any time after six years from
the distribution of all Distributable Proceeds (unless such records and
documents are necessary to fulfill the Trustee's obligations pursuant to
Section 5.06 hereunder). Except as otherwise specifically provided herein,
upon the distribution of all Distributable Proceeds, the Trustee shall be
deemed discharged and have no further duties or obligations hereunder except
to account to the Beneficiaries as provided in Section 5.03 hereof and as may
be imposed on the Trustee by virtue of Section 5.06 and Article VI hereof.
ARTICLE V
ADMINISTRATION OF TRUST ESTATE
5.01 Payment of Claims, Expenses and Liabilities. The Trustee
shall pay from the Trust Assets all claims, expenses, charges, liabilities and
obligations of the Trust as contemplated by this Agreement and as required by
law.
5.02 Distributions. (a) The Trustee shall make distributions to
the Unit Holders of the Distributable Proceeds in accordance with the
provisions of this Agreement at each such time as the Trustee has available at
least $500,000 in Distributable Proceeds for distribution to the Unit Holders;
provided, however, that, notwithstanding the foregoing, the Trustee must make
<PAGE> 6
a distribution of all Distributable Proceeds to the Unit Holders at least once
per year after taking into account any payments that must be made in
accordance with Section 5.01 hereof and after retaining such moneys as it
determines is necessary to pay the on-going costs and expenses of prosecuting
the Trust Actions, provided, further, that, notwithstanding the preceding
clause, the Trustee must distribute at least 50% of the Distributable Proceeds
on an annual basis. The Trustee shall distribute or cause to be distributed to
the Unit Holders the Distributable Proceeds in an amount equal to each Unit
Holder's pro rata share of such Distributable Proceeds as based on the number
of Units held by each Unit Holder. Notwithstanding any provision herein to the
contrary, the Trustee shall make a final distribution of the Distributable
Proceeds and any remaining trust moneys and other Trust Assets in accordance
with the terms of this Agreement prior to the termination of the Trust in
accordance with Section 4.01 hereof.
(b) No distribution shall be required to be made hereunder
to any Unit Holder unless such Unit Holder is to receive at least $50 or
unless such distribution is the final distribution to such holder pursuant to
the Plan and this Agreement. Any such distribution not made in accordance
with the provisions of this Section 5.02(b) shall be retained by the Trustee
in an interest bearing account and shall be held in trust for the relevant
Unit Holder until the earlier of (i) the date the next distribution is
scheduled to be made to such Unit Holder, provided, however, that such
subsequent distribution, taken together with amounts retained hereby, equals
at least $50, or (ii) the final distribution to such Unit Holder.
5.03 Reports. The Trustee shall file with the Court: (a)
unaudited quarterly financial reports and an audited annual financial report
regarding the financial condition and results of operation of the Trust, and
(b) a quarterly report concerning the status of all Trust Actions which have
been filed with a court of competent jurisdiction. The Trustee shall provide
a copy of such reports to any Unit Holder at such Unit Holder's request and
cost. If the Trust becomes subject to the registration requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Trustee
shall cause the Trust to register pursuant to, and comply with the applicable
reporting requirements of, the Exchange Act and will issue reports to Unit
Holders in accordance therewith.
5.04 Notice of Change of Address. Each Unit Holder shall be
responsible for providing the Trustee with written notice of any change in
address. The Trustee is not obligated to make any effort to determine the
correct address of a Unit Holder.
5.05 Fiscal Year. The fiscal year of the Trust shall be the
calendar year.
5.06 Books and Records. The Trustee shall maintain, in respect
of the Trust and the Unit Holders, books and records relating to the assets
and the income of the Trust and the payment of expenses of the Trust, in such
detail and for such period of time as may be necessary to enable it to make
full and proper reports in respect thereof in accordance with the provisions
of Section 5.03 and Article VI hereof and to comply with applicable provisions
of law.
<PAGE> 7
5.07 Undeliverable Property. (a) If any distribution to a
Beneficiary of Certificates or Distributable Proceeds is returned to the Trust
as undeliverable, no further distribution thereof shall be made unless and
until the Trust is notified in writing of such Beneficiary's then current
address within the time period specified in Section 5.07(b). For purposes of
this Agreement, undeliverable distributions shall include checks (as of the
date of their issuance) sent to a Beneficiary, respecting distributions to
such Beneficiary, which checks have not been cashed within six months
following the date of issuance of such checks. Undeliverable distributions
shall remain in the possession of the Trust until the earlier of (i) such time
as the relevant distribution becomes deliverable and (ii) the time period
specified in Section 5.07(b).
(b) Any Beneficiary that does not assert a claim for an
undeliverable distribution of Certificates or Distributable Proceeds held by
the Trust within the later of (i) two years after the date hereof or (ii) one
year after the date such distribution was originally made (but in no event
longer than six months after all of the Distributable Proceeds have been
distributed except for undeliverable distributions), shall no longer have any
claim to or interest in such undeliverable distribution and shall forever be
barred from receiving any further distributions under this Agreement. In such
cases, title to and all Beneficial Interests in any such undeliverable
distributions shall revert to or remain in the trust and shall be
redistributed in accordance with Section 5.01(a) of this Agreement.
5.08 Cash Payments. All payments required to be made by the
Trustee to the Unit Holders shall be made in Cash denominated in U.S. dollars
and, if in check form, drawn on a domestic bank selected by the Trustee.
ARTICLE VI
TAX MATTERS
6.01 The Debtor, New WRT, the Beneficiaries and the Disbursing
Agent shall treat the transfer to the Trust the Initial Contribution, the
Trust Actions, and the right to receive any MEC Proceeds for the benefit of
the holders of Allowed Class D-3 Claims and New WRT, for all purposes of the
Internal Revenue Code of 1986, as amended (the "Code"), as a transfer of a pro
rata portion of the Initial Contribution, the Trust Actions and the right to
receive the MEC Proceeds to holders of Allowed Class D-3 Claims to the extent
that such creditors are Beneficiaries followed by a deemed transfer of such
pro rata portion by holders of Allowed Class D-3 Claims to the Trust and a
transfer of the remainder of the Initial Contribution, the Trust Actions and
the right to receive the MEC Proceeds by New WRT to the Trust.
6.02 For all federal income tax purposes, the Beneficiaries will
be treated as the grantors and deemed owners of the Trust. The Trustee will
file returns for the Trust as a grantor trust pursuant to Section 1.671-4(a)
of the Income Tax Regulations and will issue to the Unit Holders appropriate
tax forms and statements required under the Code and Treasury Regulations to
permit each Unit Holder to report and pay tax on its share of the Trust's
taxable income.
<PAGE> 8
6.03 For all federal income tax purposes, the Trust Actions and
the right to receive MEC Proceeds will be treated by the Debtor, New WRT, the
Beneficiaries, the Disbursing Agent and the Trustee as having had no value at
the time of their transfer to the Trusts on behalf and for the benefit of the
Beneficiaries.
6.04 The Trustee will take such actions as are necessary to make
certain that all of the Trust's taxable income (including, but not limited to,
all Proceeds, MEC Proceeds and earnings, if any, on Trust Assets) will be
subject to federal income tax on a current basis. In accordance therewith,
the Trustee will provide the Disbursing Agent with the appropriate tax
information so that the Disbursing Agent can pay federal, state and local
income tax in accordance with the Disbursing Agent Agreement. A Beneficiary
which receives distributions with respect to which the Disbursing Agent has
paid federal income tax pursuant to this Section 6.04 shall be treated for all
other purposes of this Agreement and the Plan as having received a
distribution equal to the amount of tax paid on its behalf by the Disbursing
Agent.
ARTICLE VII
POWERS OF AND LIMITATIONS ON THE TRUSTEE
7.01 Powers of the Trustee. Without limiting, but subject to
the remaining provisions herein, the Trustee shall be expressly authorized to:
(a) execute any documents and take any other actions
related to, or in connection with, the liquidation of the Trust Assets and the
exercise of the Trustee's powers granted herein;
(b) hold legal title to any and all rights of the
Beneficiaries in or arising from the Trust Assets;
(c) protect and enforce the rights to the Trust Assets
vested in the Trustee by this Agreement by any method deemed appropriate
including, without limitation, by judicial proceedings or pursuant to any
applicable bankruptcy, insolvency, moratorium or similar law and general
principles of equity;
(d) deliver the Certificates and distributions on account
of the Certificates to the Unit Holders in accordance with this Agreement;
(e) have exclusive power to prosecute the Trust Actions;
(f) have exclusive power to settle or otherwise compromise
the Trust Actions, subject, however, to Bankruptcy Court approval;
(g) file, if necessary, any and all tax information returns
with respect to the Trust and pay taxes properly payable by the Trust, if any,
and make distributions to the Beneficiaries net of such taxes;
<PAGE> 9
(h) make all necessary filings in accordance with any
applicable law, statute or regulation, including, but not limited to, the
Exchange Act;
(i) determine and satisfy any and all ordinary course
liabilities created, incurred or assumed by the Trust;
(j) pay all ordinary course expenses and make all other
payment relating to the Trust;
(k) retain and pay professionals, including but not limited
to attorneys, necessary to carry out its obligations hereunder;
(l) invest moneys received by the Trust or otherwise held
by the Trust in accordance with Section 7.03 hereof; and
(m) in the event that the Trustee determines that the
Beneficiaries or the Trust may, will or have become subject to adverse tax
consequences, in its sole discretion, take such actions that will, or are
intended to, alleviate such adverse tax consequences.
7.02 Limitations on Trustee. (a) The Trustee shall not at
any time, on behalf of the Trust or the Beneficiaries, (i) enter into or
engage in any trade or business, (ii) take any steps to facilitate the
development of an active trading market for the Certificates, (iii) make a
market for the Certificates or encourage others to do so, (iv) list the
Certificates on a national securities exchange or the Nasdaq Stock Market or
(v) collect or publish information about prices at which the Certificates are
transferred.
(b) No part of the Trust Assets shall be used or disposed
of by the Trustee in furtherance of any trade or business. The Trustee shall,
on behalf of the Trust, hold the Trust out as a trust in the process of
liquidation and not as an investment company. The Trustee shall be restricted
to the enforcement on behalf of and for the benefit of the Beneficiaries of
the Trust Actions, the payments and distribution of the Proceeds for the
purpose set forth in this Agreement and the conservation and protection of
the Trust Assets and the administration thereof in accordance with the
provisions of this Agreement.
7.03 Investment of Trust Moneys. The Trustee shall invest the
moneys received by the Trust or otherwise held in the Trust Estate in (i)
short-term certificates of deposit or money market accounts maintained by or
issued by domestic banks having in excess of $1 billion in capital and surplus
and one of the two highest ratings given by both Moody's and Standard & Poors,
(ii) insured demand deposit accounts or certificates of deposit maintained by
or issued by any savings institution or commercial bank insured by the United
States government or any agency thereof and (iii) short-term marketable direct
obligations of, or guaranteed as to principal and interest by, the United
States government or any agency thereof; provided, however, that the
maturities of any of the foregoing shall not exceed 30 days.
<PAGE> 10
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01 Generally. The Trustee accepts and undertakes to discharge
the Trust created by this Agreement upon the terms and conditions hereof. The
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent man would exercise or use under the circumstances in the conduct of
its own affairs. No provisions of this Agreement shall be construed to
relieve the Trustee from liability for its own recklessness or its own
intentional or willful and wanton misconduct resulting in personal gain,
except that:
(a) the Trustee shall not be liable for any action taken in
good faith in reliance upon the advice of professionals;
(b) the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Agreement, and no implied covenants or obligations shall be read into
this Agreement against the Trustee; and
(c) the Trustee shall not be liable for any error of
judgment made in good faith.
8.02 Reliance by Trustee. Except as otherwise provided in this
Agreement:
(a) the Trustee may rely and shall be protected in acting
upon any resolution, statement, instrument, opinion, report, notice, request,
consent, order or other paper or document reasonably believed by the Trustee
to be genuine and to have been signed or presented by the proper party or
parties;
(b) the Trustee may consult with independent legal counsel
to be selected by it and the advice or opinion of such counsel shall be full
and complete personal protection to the Trustee and agents of the Trust in
respect of any action taken or suffered by it in good faith and in reliance
on, or in accordance with, such advice or opinion; and
(c) persons dealing with the Trustee shall look only to the
Trust Assets to satisfy any liability incurred by the Trustee to such person
in carrying out the terms of this Agreement, and the Trustee shall have no
personal or individual obligation to satisfy any such liability.
8.03 Liability to Third Persons. No Beneficiary shall be
subject to any personal liability whatsoever, in tort, contract or otherwise,
to any person in connection with the Trust Assets or the affairs of the Trust,
and no Trustee or agent of the Trust shall be subject to any personal
liability whatsoever, in tort, contract or otherwise, to any person in
connection with the Trust Assets or the affairs of this Trust, except for its
<PAGE> 11
own recklessness or its own intentional or willful and wanton misconduct
resulting in personal gain; and all such persons shall look solely to the
Trust Assets for satisfaction of claims of any nature arising in connection
with affairs of the Trust. Nothing in this Section 8.03 shall be deemed to
release any Beneficiary from any actions or omissions occurring prior to the
Confirmation Date.
8.04 Nonliability of Trustee for Acts of Others. Nothing
contained in this Trust Agreement shall be deemed to be an assumption by the
Trustee of any of the liabilities, obligations or duties of any of the other
parties hereto or of the Debtor or New WRT; and shall not be deemed to be or
contain a covenant or agreement by the Trustee to assume or accept any such
liability, obligation or duty. Any successor Trustee may accept and rely upon
any accounting made by or on behalf of any predecessor Trustee hereunder, and
any statement or representation made as to the assets comprising the Trust
Assets or as to any other fact bearing upon the prior administration of the
Trust. A Trustee shall not be liable for having accepted and relied upon such
accounting, statement or representation if it is later proved to be
incomplete, inaccurate or untrue. A Trustee or successor Trustee shall not be
liable for any act or omission of any predecessor Trustee, nor have a duty to
enforce any claims against any predecessor Trustee on account of any such act
or omission.
8.05 Indemnity. The Trustee, its employees, officers, directors
and principals (collectively, the "Indemnified Parties") shall be indemnified
by the Trust from any losses, claims, damages, liabilities or expenses
(including, without limitation, reasonable attorneys' fees, disbursements and
related expenses) which the Indemnified Parties may incur or to which the
Indemnified Parties may become subject in connection with any action, suit,
proceeding or investigation brought by or threatened against the Indemnified
Parties on account of the acts or omissions of the Trustee in its capacity as
such, including, without limitation, the Trust Actions, provided, however,
that the Trust shall not be liable to indemnify the Indemnified Parties for
any of its acts or omissions constituting fraud, gross negligence or willful
misconduct, and, provided further, that nothing in this Section 8.05 shall be
deemed to restrict the Trustee's right to receive an indemnity based on acts
or omissions taken in accordance with the provisions of Sections 8.01 and 8.02
hereof. Notwithstanding any provision herein to the contrary, the Indemnified
Parties shall be entitled to obtain advances from the Trust to cover their
expenses of defending themselves in any action brought against them as a
result of the acts or omissions of the Trustee in its capacity as such,
provided, however, that the Indemnified Parties receiving such advances shall
repay the amounts so advanced to the Trust upon the entry of a Final Order
finding that such Indemnified Parties were not entitled to any indemnity under
the provisions of this Section 8.05.
8.06 Bond. The Trustee shall serve without bond.
<PAGE> 12
ARTICLE IX
COMPENSATION OF TRUSTEE
9.01 Amount of Compensation. The Trustee shall receive
compensation for its services in accordance with the terms set forth in that
certain letter agreement dated as of July 10, 1997 between the Debtor and the
Trustee.
9.02 Expenses. The Trustee shall be entitled to reimburse
itself from the Trust for all reasonable out-of-pocket expenses actually
incurred by it in the performance of its duties in accordance with this
Agreement.
ARTICLE X
TRUSTEE AND SUCCESSOR TRUSTEES
10.01 Generally. The Trustee shall initially be Goldin
Associates, L.L.C. The Trustee represents that it is a limited liability
corporation organized under the laws of the State of New York. If the Trustee
shall ever change its name or reorganize, reincorporate or merge with or into
or consolidate with any other entity, such Trustee shall be deemed to be a
continuing entity and shall continue to act as a Trustee hereunder with the
same liabilities, duties, powers, rights, titles, discretions and privileges
as are herein specified for a Trustee.
10.02 Resignation or Removal. The Trustee may resign and be
discharged from the trusts hereby created by giving at least 30 days prior
written notice thereof to each of the Beneficiaries. Such resignation shall
become effective on the later to occur of (a) the date specified in such
written notice, or (b) the effective date of the appointment of a successor
Trustee in accordance with Section 10.04 hereof and such successor's
acceptance of such appointment.
10.03 Removal. The Trustee may be removed, with or without
cause, by vote of Beneficiaries holding a majority of the total outstanding
Units held by Beneficiaries. Such resignation shall become effective on the
later to occur of (a) the date such action is taken by the Beneficiaries, or
(b) the effective date of the appointment of a successor Trustee in accordance
with Section 10.04 hereof and such successor's acceptance of such appointment,
but in no event more than thirty days after action is taken by the
Beneficiaries.
10.04 Appointment of Successor. In the event of the death,
resignation, removal, incompetency, bankruptcy or insolvency of the Trustee, a
vacancy shall be deemed to exist and a successor shall be appointed by a vote
of the Beneficiaries who hold in the aggregate in excess of 50% of the total
outstanding number of Units held by Beneficiaries present at a meeting of all
Beneficiaries held after at least thirty days' written notice to each
Beneficiary.
<PAGE> 13
10.05 Meeting. A meeting to be held pursuant to Sections 10.03
or 10.04 may be called by Beneficiaries holding at least 10% of the Units or,
alternatively, by the Bankruptcy Court.
10.06 Acceptance of Appointment by Successor Trustee. The
death, resignation, removal, incompetency, bankruptcy or insolvency of the
Trustee shall not operate to terminate the Trust created by this Agreement or
to revoke any existing agency created pursuant to the terms of this Agreement
or invalidate any action theretofore taken by the Trustee. Any successor
Trustee appointed hereunder shall execute an instrument accepting its
appointment and shall deliver one counterpart thereof to the Bankruptcy Court
for filing, and, in case of the Trustees resignation, to the retiring Trustee.
Thereupon, such successor shall, without any further act, become vested with
all the liabilities, duties, powers, rights, title, discretion and privileges
of its predecessor in the Trust with like effect as if originally named
Trustee and shall be deemed appointed pursuant to Section 1123(b) (3) (B) of
the Bankruptcy Code to retain and enforce the Trust Actions for the benefit of
the Beneficiaries. The retiring Trustee shall duly assign, transfer and
deliver to such successor all property and money held by such retiring Trustee
hereunder and shall, as directed by the Bankruptcy Court or reasonably
requested by such successor, execute and deliver an instrument or instruments
conveying and transferring to such successor upon the trust herein expressed,
all the liabilities, duties, powers, rights, title, discretion and privileges
of such retiring Trustee.
ARTICLE XI
CONCERNING THE BENEFICIARIES
11.01 No Suits by Beneficiaries. No Beneficiary shall have any
right by virtue of any provision of this Agreement to institute any action or
proceeding at law or in equity against any party other than the Trustee upon
or under or with respect to the Trust Assets.
11.02 Requirement of Undertaking. The Trustee may request the
Bankruptcy Court to require, in any suit for the enforcement of any right or
remedy under this Agreement, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, including
reasonable attorneys' fees, against any party litigant in such suit; provided.
however, that the provisions of this Section 11.02 shall not apply to any suit
by the Trustee.
ARTICLE XII
JURISDICTION
The parties agree that the Bankruptcy Court shall have jurisdiction
over the Trust, the Trustee, the Trust Actions and the remaining Trust Assets,
including, without limitation, jurisdiction to determine all controversies and
disputes arising under or in connection with this Agreement. Nevertheless,
the Trustee shall have power and authority to bring any action in any court of
competent jurisdiction to prosecute the Trust Actions.
<PAGE> 14
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01 Construction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the United
States of America; provided that the Trust and any interpretation or
enforcement of the provisions of this Agreement shall be subject to the
jurisdiction of the Bankruptcy Court as contemplated by Article XII hereof.
The Trustee's interpretation of the provisions of this Agreement and the
provisions of the Plan as they relate to the prosecution of the Trust Actions
shall be deemed conclusive in the absence of a contrary interpretation of the
Bankruptcy Court.
13.02 Severability. In the event any provision of this
Agreement or the application thereof to any person or circumstances shall be
determined by Final Order of a court of proper jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement or the
application of such provision to persons or circumstances or in jurisdictions
other than those as to or in which it is held invalid or unenforceable, shall
not be affected thereby, and each provision of this Agreement shall be valid
and enforced to the fullest extent permitted by law.
13.03 Cooperation. New WRT shall provide the Trustee, at no
cost to the Trustee, the Trust or the Beneficiaries, with such access to its
books, records and employees as the Trustee may reasonably request for the
purpose of performing its duties and exercising its duties hereunder,
including, without limitation, to assist the Trustee in prosecuting the Trust
Actions.
13.04 Notices. Any notice or other communication required or
permitted to be made in accordance with this Agreement shall be in writing
and shall be deemed to have been sufficiently given, for all purposes, if
delivered personally or by telex or other telegraphic means or mailed by first
class mail:
(i) if to the Trustee, at 767 Fifth Avenue, 28th floor, New
York, New York 10153, attention: Mr. Harrison J. Goldin.
(ii) if to any Beneficiary, to the last known business or
residential address of such Beneficiary, as the case may be, reflected in the
Trustee's records.
(iii) if to New WRT, at: 3303 FM 1960 West, Houston, Texas
77068, Attn: Mr. Gary C. Hanna.
13.05 Headings. The headings contained in this Agreement are
solely for convenience of reference and shall not affect the meaning or
interpretation of this Agreement or of any term or provision hereof.
<PAGE> 15
13.06 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
or caused this Agreement to be duly executed by their respective officers and
the Trustee herein has executed this Agreement, as Trustee, effective as of
the date first above written.
WRT Energy Corporation
By:
----------------------------
Name:
Title:
Goldin Associates, L.L.C.
By:
----------------------------
Name:
Title:
<PAGE> 16
Exhibit L
EXECUTION COPY
DISBURSING SERVICES AGREEMENT
DISBURSING SERVICES AGREEMENT, dated as of May 2, 1997 (the
"Agreement"), by and among WRT Energy Corporation, a Delaware corporation
("New WRT"), and IBJ Schroder Bank & Trust Company (the "Disbursing Agent").
WHEREAS, on February 14, 1996, WRT Energy Corporation, a Texas
corporation, and predecessor-in-interest to New WRT (the "Debtor"), filed a
voluntary petition under chapter 11 of title 11 of the United States Code, 11
U.S.C. ss 101 et seq. (as amended, the "Bankruptcy Code"), with the United
States Bankruptcy Court for the Western District of Louisiana, Lafayette-
Opelousas Division (the "Bankruptcy Court"), and thereafter continued in the
management and control of its business and property as debtor in possession
pursuant to Bankruptcy Code ss 1107 and 1108;
WHEREAS, the Debtor's and DLBW's Second Amended Plan of
Reorganization dated March 11, 1997 (the "Plan"), was confirmed by order of
the Bankruptcy Court, dated May 2, 1997; and
WHEREAS, pursuant to the Plan and the order of the Bankruptcy Court
confirming the Plan, the Disbursing Agent was appointed Disbursing Agent (as
defined under the Plan) and has assumed the duties and obligations of such
position;
NOW, THEREFORE, in consideration of the premises herein, the parties
hereto agree as follows:
1. Defined Terms. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to such term in the
Plan or in the Liquidating Trust Agreement (the "Litigation Entity
Agreement"), dated as of July 10, 1997, between New WRT and the Litigation
Agent (as defined below).
<PAGE> 1
2. Retention and Acceptance. The Disbursing Agent hereby agrees
to furnish, and New WRT agrees to accept, on an exclusive basis during the
term of this Agreement, the services specifically described herein.
3. Term and Termination. The term of this Agreement (the "Term")
shall be from the date first above written until the date on which the
Disbursing Agent is relieved of any further responsibilities as Disbursing
Agent under the Plan and/or any applicable order of the Bankruptcy Court;
provided, however, that this Agreement may be terminated prior to such date by
New WRT or the Disbursing Agent upon thirty (30) days written notice to the
other party.
4. Maintain Database. The Disbursing Agent shall create a
database of all Allowed Claims, Disputed Claims and Equity Interests as of the
Distribution Record Date. The Debtor shall provide to the Disbursing Agent
all information reasonably requested by the Disbursing Agent, in the format
reasonably requested by the Disbursing Agent. The database shall include (i)
for each Claim, the Claimant's name and address, the amount, classification
and status of the Claim, whether the Claimant has, in a timely and proper
manner in accordance with the terms and conditions of the Plan and the New WRT
Subscription Rights Agreement, exercised the New WRT Subscription Rights, if
any, received with respect to such Claim (and, if the Claim is an Allowed
Claim, and the Claimant is an Oversubscribing Creditor, the Oversubscription
Amount paid by such Claimant), (ii) for each Equity Interest, the holder's
name and address and the number of shares of Common Stock and Preferred Stock
held by the holder, (iii) for each holder of a Claim in Classes B-4, B-6, C-1
through C-10 and C-12 through C-16, information regarding all liens, security
interests, notices of lis pendens and lawsuits filed by such holder,
sufficient to permit the Disbursing Agent to verify such holder's compliance
with the requirements of Section 11(g) of this Agreement and (iv) other
appropriate information. The Disbursing Agent shall maintain the database
throughout the Term and will update it continuously to reflect any
Distributions made or any court order, stipulation or other determination
affecting the status of a Disputed Claim. The database and all information
contained therein (other than proprietary computer software) shall be the
property of New WRT.
<PAGE> 2
5. Disbursements in Respect of Allowed Claims.
(a) Calculations; Initial Disbursement Report. As soon as
practicable, but in no event later than five (5) Business Days prior to the
Effective Date, the Disbursing Agent shall (i) calculate, in accordance with
the Plan, as applicable, the amount of Cash, the number of shares of New WRT
Common Stock (including New WRT Subscription Common Stock), including the
number of such shares to be deposited in the Disputed Claims Reserve Account
on account of Disputed Claims, and the number of New WRT Warrants to be
distributed to each holder of an Allowed Claim or Equity Interest, (ii)
calculate the amount of additional Cash required to be contributed by DLBW in
accordance with the Commitment Agreement and Articles 29.4 and 29.6(b) of the
Plan and provide DLBW with written notice thereof together with appropriate
back-up for such calculation, (iii) calculate, in accordance with the Plan,
the Litigation Entity Interests to be distributed to each holder of an Allowed
Claim, including the Litigation Entity Interests to be issued to the
Disbursing Agent to be deposited in the Disputed Claims Reserve Account on
account of Disputed Claims, and (iv) prepare a detailed report, in a form
acceptable to New WRT, of all disbursements of Cash, New WRT Common Stock
(including New WRT Subscription Common Stock), Litigation Entity Interests and
New WRT Warrants to be made on the Effective Date and of all Cash received
pursuant to the Rights Offering (the "Initial Disbursement Report") and submit
such report to New WRT for approval in advance of the making of any
disbursements. Such calculation and the Initial Disbursement Report shall be
subject to adjustment on the Effective Date. As set forth in the Litigation
Entity Agreement, the Litigation Entity Interests will be evidenced by
certificates for Units of Beneficial Interest in the trust established by the
Litigation Entity Agreement which trust constitutes the Litigation Entity.
(b) Disbursement Account; Transfer of Excess Cash. The
Disbursing Agent shall establish one or more bank accounts, including the
Disputed Claims Reserve Account (the "Disbursement Accounts"). On the
Effective Date, (i) if (A) the total amount of Cash to be paid by the
Disbursing Agent to the holders of Allowed Claims on the Effective Date, to be
deposited in the Disputed Claims Reserve Account on account of Disputed Claims
and to be transferred to the Litigation Entity pursuant to
<PAGE> 3
Article 33.16 of the Plan (such amount being the "Aggregate Cash Uses")
exceeds (B) the aggregate amount of Cash received by the Disbursing Agent
pursuant to the Rights Offering, paid to the Disbursing Agent by DLBW pursuant
to the Commitment Agreement and received from INCC pursuant to Article 33.11
of the Plan (such amount being the "Aggregate Cash Sources"), New WRT shall
transfer into the appropriate Disbursement Accounts an amount of Cash equal to
the amount by which the Aggregate Cash Uses exceeds the Aggregate Cash
Sources, and (ii) if the Aggregate Cash Sources exceeds the Aggregate Cash
Uses, the Disbursing Agent shall transfer to New WRT (into an account
designated in writing by New WRT), an amount of Cash equal to the amount by
which the Aggregate Cash Sources Exceeds the Aggregate Cash Uses. The
Disbursing Agent shall keep New WRT informed of the amount of all checks
written or wire transfers made by the Disbursing Agent pursuant to this
Agreement against the Disbursement Account.
(c) Cash Disbursements. As soon as practicable after the
Effective Date, but in no event more than ten (10) Business Days after the
Effective Date, the Disbursing Agent shall (i) write a check against or make a
wire transfer from the appropriate Disbursement Account payable to the order
of each holder of an Allowed Claim entitled to receive a Distribution of Cash
in an amount equal to the Cash Distribution to be made on account of such
Claim under the Plan and shall mail any such check to such holder and (ii)
transfer $3,000,000 to the Litigation Entity, in accordance with such written
transfer instructions as the litigation agent (the "Litigation Agent")
appointed to manage the Litigation Entity may provide.
(d) Distributions of New WRT Common Stock. As soon as
practicable, but in no event later than three (3) Business Days prior to the
Effective Date, the Disbursing Agent shall provide all necessary information
to American Stock Transfer & Trust Company (the "Transfer Agent") and instruct
the Transfer Agent to prepare and register certificates representing
appropriate numbers of shares of New WRT Common Stock (including New WRT
Subscription Common Stock) to be issued in respect of each Allowed Claim
entitled to receive a Distribution of New WRT Common Stock. Such information
shall be subject to adjustment on the Effective Date. The Disbursing Agent
shall direct that all certificates be delivered to the Disbursing Agent. As
soon practicable after the Effective Date, but in no event more than
<PAGE> 4
ten (10) Business Days after the Effective Date, the Disbursing Agent shall
mail such certificates to the holders of such Allowed Claims.
(e) Distributions of Litigation Entity Interests. As soon as
practicable, but in no event later than three (3) Business Days prior to the
Effective Date, the Disbursing Agent shall provide all necessary information
to the Litigation Agent and instruct the Litigation Agent to prepare and
register, in accordance with the terms of the Litigation Agreement,
certificates representing the Litigation Entity Interests to be issued in
respect of each Allowed Claim in Class D-3 and a certificate registered in the
name of the Disbursing Agent representing the aggregate Litigation Entity
Interests to be held by the Disbursing Agent on behalf of and for the benefit
of holders of (i) Disputed Claims and (ii) to the extent that any Disputed
Claim is disallowed in whole or in part, Allowed Claims as provided in the
Plan and Section 6(f) hereof (such Litigation Entity Interests being the
"Disputed Interests"). Such information shall be subject to adjustment on the
Effective Date. The Disbursing Agent shall direct that all certificates be
delivered to the Disbursing Agent. As soon practicable after the Effective
Date, but in no event more than ten (10) Business Days after the Effective
Date, the Disbursing Agent shall mail such certificates to the holders of such
Allowed Claims and shall deposit with the Disbursing Agent in the Disputed
Claims Reserve Account a certificate representing the Disputed Interests.
(f) Distributions of New WRT Warrants. If New WRT Warrants
are to be distributed pursuant to the Plan, as soon as practicable, but in no
event later than three (3) Business Days prior to the Effective Date, the
Disbursing Agent shall provide all necessary information to the Transfer Agent
and instruct the Transfer Agent to prepare and register certificates
representing appropriate numbers of New WRT Warrants to be issued in respect
of each Allowed Claim and Equity Interest entitled to receive a Distribution
of New WRT Warrants. Such information shall be subject to adjustment on the
Effective Date. The Disbursing Agent shall direct that all certificates be
delivered to the Disbursing Agent. As soon practicable after the Effective
Date, but in no event more than ten (10) Business Days after the Effective
Date, the Disbursing Agent shall mail such certificates to the holders of such
Allowed Claims and Equity Interests,
<PAGE> 5
provided that the Transfer Agent has delivered such certificates to the
Disbursing Agent no more than five (5) Business Days after the Effective Date;
if the Disbursing Agent does not receive such certificates by such date, the
Disbursing Agent shall mail such certificates to such holders as soon as
practicable, but in no event more than five (5) Business Days after, its
receipt of such certificates.
(g) Excess Oversubscription. If the Disbursing Agent
determines that the Total Oversubscription Amount exceeds the Disputed
Exercise Price, the Disbursing Agent shall, as soon as practicable but in any
event within three (3) Business Days after the Subscription Rights Election
Deadline, write a check against or make a wire transfer from the appropriate
Disbursement Account payable to the order of each Oversubscribing Creditor in
an amount equal to such Oversubscribing Creditor's Excess Oversubscription
Amount and shall mail any such check to such Oversubscribing Creditor.
(h) Notice to the Disbursing Agent. New WRT shall notify the
Disbursing Agent by telecopy of (i) the date on which the Effective Date is
expected to occur, as soon as practicable after such date is determined and
(ii) the occurrence of the Effective Date, as soon as practicable after such
occurrence.
6. Disputed Claims.
(a) Calculate Amount of Reserves. As soon as practicable, but
in no event later than three (3) Business Days prior to the Effective Date,
the Disbursing Agent shall calculate, in accordance with the Plan, the amount
of Cash (including the Disputed Subscription Purchase Price), the number of
shares of New WRT Common Stock (including Disputed New WRT Subscription Common
Stock) and the Disputed Interests to be held in reserve in respect of each
Disputed Claim. Such calculation shall be subject to adjustment on the
Effective Date based upon information provided by the Debtor with respect to
the allowance or disallowance of Disputed Claims. The Disbursing Agent shall
notify WRT of the aggregate amount of Cash and the aggregate number of shares
of New WRT Common Stock to be deposited in
<PAGE> 6
Disputed Claims Reserve Account and shall notify the Litigation Agent and New
WRT of the Disputed Interests to be issued to the Disbursing Agent and
deposited in the Disputed Claims Reserve Account.
(b) Allocate Interest and Dividends. The Disbursing Agent
shall monitor the accrual of interest or other earnings on Cash balances in
the Disputed Claim Reserve Account, and the declaration and payment of any
dividends or other distributions in respect of New WRT Common Stock and
Litigation Entity Interests held in the Disputed Claims Reserve Account, and
shall allocate the appropriate portion of such interest and distributions to
each Disputed Claim.
(c) Disbursement Upon Allowance of Disputed Claim. At such
time as all or any portion of a Disputed Claim becomes an Allowed Claim, the
Disbursing Agent shall:
(i) write a check against or make a wire transfer from
the appropriate Disbursement Account payable to the order of the holder of
such Allowed Claim for the amount of the Distribution of Cash payable with
respect to such Allowed Claim (including the interest, other earnings thereon
and any dividends or other distributions received by the Disbursing Agent in
respect of any New WRT Common Stock and Litigation Entity Interests issuable
in respect of such Claim), net of any taxes or the pro rata share of other
applicable charges identified by New WRT, if any;
(ii) instruct the Transfer Agent to register and issue a
certificate for the number of shares of New WRT Common Stock (including, if
such Disputed Claim is an Exercised Disputed Claim, New WRT Subscription
Common Stock) issuable in respect of such Allowed Claim, if any;
(iii) authorize the wire transfer or deliver the check
and any such certificates of New WRT Common Stock and Litigation Entity
Interests to the holder of the Allowed Claim; and
<PAGE> 7
(iv) if such Disputed Claim is an Exercised Disputed
Claim, write a check against or make a wire transfer from the Disputed Claims
Reserve Account payable to the order of each Oversubscribing Creditor in an
amount equal to such Oversubscribing Creditor's Pro Rata Disputed Percentage
of the Subscription Purchase Price for the New WRT Subscription Common Stock,
if any, issued and distributed under this Section 6(c) on account of such
Allowed Claim, and mail any such check to such Oversubscribing Creditor.
(d) Disbursement Upon Disallowance of Disputed Claim. At such
time as all or any portion of a Disputed Claim is determined by Final Order (a
copy of which shall be provided to the Disbursing Agent) not to be an Allowed
Claim (such Disputed Claim or portion thereof being the "Disallowed Claim"),
the Disbursing Agent shall instruct the Transfer Agent to register and issue
any New WRT Common Stock reserved on account of such Disallowed Claim in the
name of, and shall distribute certificates representing any such New WRT
Common Stock to, the holders of Claims in Class D-3 (or, in the case of
holders of Disputed Claims, such shares of New WRT Common Stock shall not be
registered and issued, but instead shall be deposited in the Disputed Claims
Reserve Account), in accordance with Article 27 of the Plan. The Disbursing
Agent shall transfer to New WRT, from the Disputed Claims Reserve Account, any
Cash reserved on account of such Disallowed Claim.
(e) Disbursement Upon Disallowance of Exercised Disputed
Claim. At such time as all or any portion of an Exercised Disputed Claim is
determined by Final Order not to be an Allowed Claim (such Exercised Disputed
Claim or portion thereof being the "Disallowed Exercised Claim"), the
Disbursing Agent shall, in addition to the disbursements set forth in Section
6(d) of this Agreement:
(i) write a check against or make a wire transfer from
the appropriate Disbursement Account payable to the order of the holder of
such Disallowed Exercised Claim in an amount equal to the Subscription
Purchase Price for the Repurchased New WRT Subscription Common Stock purchased
by the
<PAGE> 8
holder of such Disallowed Exercised Claim on account of such Disallowed
Exercised Claim, and mail any such check to such holder;
(ii) instruct the Transfer Agent to register and issue
New WRT Common Stock certificates in the name of each Oversubscribing Creditor
for the number of shares equal to such Oversubscribing Creditor's Pro Rata
Disputed Percentage of such Repurchased New Subscription WRT Common Stock;
(iii) write a check against or make a wire transfer from
the Disputed Claims Reserve Account payable to the order of each
Oversubscribing Creditor in an amount equal to any dividends or other
distributions received by the Disbursing Agent in respect of the Repurchased
New WRT Subscription Common Stock issuable to such Oversubscribing Creditor
pursuant to this Section 6(e), net of any taxes or the pro rata share of other
applicable charges identified by New WRT, if any; and
(iv) authorize the wire transfers or deliver the checks
and such certificates of New WRT Common Stock to the Oversubscribing
Creditors.
(f) Disbursement of the Disputed Interests. No less
frequently than (A) annually after the Effective Date and (B) as soon as
practicable, but in any event within five (5) Business Days after the first
date on which all Disputed Claims within or potentially within Class D-3 have
been allowed or disallowed by Final Order, the Disbursing Agent shall provide
all necessary information to the Litigation Agent and instruct the Litigation
Agent to prepare and register, in accordance with the terms of the Litigation
Agreement, certificates representing the Litigation Entity Interests to be
issued in respect of each Allowed Claim in Class D-3 pursuant to Article 27.3
of the Plan. The Disbursing Agent shall direct that all certificates be
delivered to the Disbursing Agent. As soon practicable, but in no event more
than three (3) Business Days after receipt of such certificates, the
Disbursing Agent shall issue to each holder in Class D-3 a certificate
representing such holder's Interim Pro Rata Percentage or Pro Rata Percentage,
as the case may be, of the Litigation Entity Interests less all Litigation
Entity Interests previously distributed to such holder, if any. The
<PAGE> 9
Disbursing Agent shall deliver or cause to be delivered such certificates to
each such holder together with a check against the Disputed Claims Reserve
Account payable to the order of such holder in an amount equal to the
distributions theretofore received by the Disbursing Agent from the Litigation
Entity with respect to such Litigation Entity Interests. The Litigation Agent
shall also, if applicable, deliver to the Disbursing Agent a new certificate
representing the Disputed Interests, in exchange for which the Disbursing
Agent shall cancel and return to the Litigation Agent any certificate then
held by the Disbursing Agent representing Disputed Interests.
7. Distributions to DLBW. As soon as practicable, but in no event
later than five (5) Business Days prior to the Effective Date, the Disbursing
Agent shall calculate, in accordance with the Plan and the Commitment
Agreement, the number of shares of New WRT Common Stock (including New WRT
Subscription Common Stock) and Litigation Entity Interests to be issued to
DLBW on the Effective Date, and shall submit to DLBW, New WRT and the
Litigation Agent a report setting forth such calculation and appropriate back-
up therefor. At least two (2) Business Days prior to the Effective Date, DLBW
shall designate in writing the name(s) in which such shares of New WRT Common
Stock and Litigation Entity Interests should be registered. The Disbursing
Agent shall provide such information to the Transfer Agent and the Litigation
Agent and instruct the Transfer Agent and Litigation Agent to prepare and
register certificates representing appropriate numbers of shares of New WRT
Common Stock and appropriate number of Litigation Entity Interests,
respectively, to be issued to DLBW in accordance with such designation. The
Disbursing Agent shall direct that all certificates be delivered to the
Disbursing Agent. On the Effective Date the Disbursing Agent shall deliver
such certificates to DLBW, provided that the Transfer Agent has delivered such
certificates to the Disbursing Agent at least one (1) Business Day prior to
the Effective Date; if the Disbursing Agent does not receive such certificates
by such date, the Disbursing Agent shall deliver such certificates to DLBW as
soon as practicable, but in no event more than one (1) Business Day after, its
receipt of such certificates.
<PAGE> 10
8. Unclaimed Distributions. Any Cash, New WRT Common Stock,
Litigation Entity Interests or New WRT Warrants disbursed in respect of an
Allowed Claim or Equity Interest by the Disbursing Agent and returned as not
claimed by the addressee or which is otherwise undeliverable shall, in
accordance with Article 27.6 of the Plan, be held in the Disputed Claim
Reserve Account for the benefit of the holder of such Allowed Claim for a
period of six months following the Effective Date. During such six-month
period, the Disbursing Agent shall require the presentation of proper proof of
any person alleging to be the holder of such Allowed Claim and, if proper
proof is proffered, the Disbursing Agent shall cause the Cash, New WRT Common
Stock, Litigation Entity Interests or New WRT Warrants relating to such
Allowed Claim or Equity Interest to be disbursed in the manner provided for in
Section 5 hereof. After such six-month period, the Disbursing Agent shall (i)
transfer any such Cash to New WRT, (ii) return any such New WRT Warrants to
the Transfer Agent and instruct the Transfer Agent to cancel such New WRT
Warrants and (iii) instruct the Transfer Agent and the Litigation Agent to
register and issue any such New WRT Common Stock and Litigation Entity
Interests, respectively, in the name of, and shall distribute certificates
representing any such New WRT Common Stock and Litigation Entity Interests,
respectively, to, the holders of Claims in Class D-3 (or, in the case of
holders of Disputed Claims, such shares of New WRT Common Stock shall not be
registered and issued, but instead shall be deposited in the Disputed Claims
Reserve Account and such Litigation Entity Interests shall be reissued in the
name of the Disbursing Agent and deposited in the Disputed Claims Reserve
Account) in accordance with Article 27 of the Plan.
9. Consultation with Committee. While the Committee shall exist,
New WRT shall promptly notify the Committee of any calculation made or report
presented by the Disbursing Agent pursuant to this Agreement, consult with the
Committee and use best efforts to resolve any issues with the Committee. The
Disbursing Agent shall provide copies of each report and any other information
prepared pursuant to this Agreement to the Committee.
<PAGE> 11
10. Compliance with Tax Requirements. In connection with any
disbursement made by the Disbursing Agent hereunder, the Disbursing Agent
shall comply with all withholding and reporting requirements imposed by
federal, state, local, and foreign taxing authorities and all distributions
hereunder shall be subject to such withholding and reporting requirements.
Without limiting the generality of the foregoing, the Disbursing Agent shall
issue a Form 1099 (or a Form 1042S, if applicable) to each person receiving a
distribution under the Plan.
11. Additional Provisions Relating to Disbursements.
(a) Form of Distributions. Any Cash payment made pursuant to
the Plan greater than $100,000 to the holder of a Claim shall be made by wire
transfer, provided that the Disbursing Agent has received wire transfer
instructions for such holder; otherwise, Cash payments may be made by a check
or wire transfer or as otherwise required.
(b) Rounding. Whenever a payment of a fraction of a cent
would otherwise be called for, the actual payment shall reflect a rounding of
such fraction down to the nearest whole cent.
(c) Distributions of Fractional Shares. Fractional shares of
New WRT Common Stock and fractional Litigation Entity Interests shall not be
issued or distributed. Whenever the applicable provisions of the Plan would
otherwise result in a fractional share or interest, the actual Distribution of
shares of New WRT Common Stock or Litigation Entity Interests shall reflect a
rounding down to the nearest whole share or interest. The Disbursing Agent
shall direct New WRT and the Litigation Agent to cancel any fractional shares
of New WRT Common Stock or fractional Litigation Entity Interests not
otherwise provided for in the Plan.
(d) Disputed Payments. In the event that any dispute arises
as to the right of any holder of an Allowed Claim to receive any payment or
distribution to be made under the Plan, New WRT may instruct the Disbursing
Agent either to make such payment or distribution or, in lieu thereof, to make
such payment or distribution into an escrow account or to hold such payment or
<PAGE> 12
distribution until the disposition of such dispute shall be determined by
order of the Bankruptcy Court or by written agreement among the interested
parties to such dispute. In addition, in the event of any dispute or
uncertainty regarding any payment or distribution, the Disbursing Agent may
request instructions from New WRT and may make such payment or distribution
into an escrow account or hold such payment or distribution until such
instructions are received.
(e) Set-offs. The Disbursing Agent shall record a reduction
in the amount of any Disputed Claim by any amount which New WRT informs the
Disbursing Agent in writing is to be set off against payment of such Disputed
Claim.
(f) Surrender and Cancellation of Instruments. As a condition
to making any disbursement to a holder of a Senior Note, such holder shall
have surrendered the certificates evidencing such holder's ownership of such
Senior Note or delivered to the Disbursing Agent or the Debtor a completed
Affidavit for Lost Security and Form of Indemnity on Paying Lost Bond
substantially in the form annexed hereto as Exhibits A and B, which completed
forms are hereby deemed satisfactory proof of the destruction, loss or theft
of such certificate. On the Effective Date, the Disbursing Agent shall obtain
from the Debtor a list of all holders of Senior Notes that have surrendered
their respective certificates or delivered the above-described forms and
reconcile the information provided with that in its database and make
disbursements in respect of such claims as soon as practicable after the
Effective Date, but in no event later than ten (10) Business Days following
the Effective Date. With respect to any certificates or lost security forms
received after the Effective Date, the Disbursing Agent shall reconcile the
information therein with that in its database and make disbursements in
respect of such Senior Notes as soon as practicable but only after appropriate
reconciliation. As soon as practicable after the Effective Date, the
Disbursing Agent shall forward to New WRT all outstanding certificates, notes,
debentures and other instruments to be canceled on the books of the Debtor.
<PAGE> 13
(g) Releases of Liens.
(i) Statutory Liens. As a condition to making any
Distribution to a holder of an Allowed Claim in any of Classes C-1 through C-
10 or C-12 through C-16, such holder shall have delivered to the Disbursing
Agent a duly executed Release of Lien(s) in the form attached hereto as
Exhibit C, a certified copy of an order of the appropriate court dismissing
with prejudice all lawsuits filed by such holder against the Debtor with
respect to such Claim and a duly executed and recordable release or withdrawal
of any notice of lis pendens filed by such holder with respect to such Claim
(all such documents being referred to herein collectively as the "Termination
Documents"), in each case in form and substance satisfactory to New WRT.
Promptly upon receiving such Termination Documents and making such
Distribution to such holder, the Disbursing Agent shall deliver such
Termination Documents to New WRT.
(ii) Contractual Liens. As a condition to making any
Distribution to a holder of an Allowed Secured Claim in either Class B-4 or B-
6, such holder shall have delivered to the Disbursing Agent a duly executed
and recordable financing statement on Form UCC-3 and any other documents
necessary to release or withdraw all liens, notices of lis pendens or other
security interests filed with respect to such Claims, in each case in form and
substance satisfactory to New WRT. Promptly upon receiving such documents and
making such Distribution to such holder, the Disbursing Agent shall deliver
such documents to New WRT.
12. Reports to New WRT. In addition to the Initial Disbursement
Report, the Disbursing Agent shall prepare and deliver to New WRT and the
Committee, if applicable, all such reports relating to the subject matter of
this Agreement as New WRT or the Committee shall reasonably request.
13. Respond to Claimant's Inquiries. The Disbursing Agent shall
make its personnel available to respond to the inquiries of holders of Claims
or their representatives concerning distributions made or to be made under the
Plan.
<PAGE> 14
14. Compensation of the Disbursing Agent. New WRT agrees to pay
the Disbursing Agent, at the rates indicated on the Schedule of Fees and
Expenses attached hereto, for all services furnished by the Disbursing Agent
pursuant to this Agreement. The Disbursing Agent will bill New WRT monthly
for all fees and expenses hereunder. All invoices shall be due and payable in
full upon receipt. In addition to all charges, New WRT shall pay to the
Disbursing Agent all sales taxes, if subject thereto, applicable to the
services performed by the Disbursing Agent for New WRT under this Agreement.
15. Liability and Indemnification.
(a) Liability. No officer, director, stockholder or
representative of the Disbursing Agent shall be personally liable for any
obligation of the Disbursing Agent hereunder. The Disbursing Agent and New
WRT acknowledge that there are no third-party beneficiaries to this Agreement.
(b) Indemnification. New WRT shall indemnify and hold
harmless the Disbursing Agent and its directors, officers and employees from
and against any liability, loss, expenses or damages arising out of any claim
asserted or threatened to be asserted in connection with the Disbursing
Agent's serving or having served as the agent of New WRT pursuant to this
Agreement, other than any liability, loss, expenses or damages arising from
the gross negligence, willful misconduct by the Disbursing Agent, its
directors, officers or employees.
16. Miscellaneous
(a) Notices. Any notice or other communication required or
which may be given hereunder shall be in writing and shall be delivered
personally, telecopied, telegraphed or telexed, or sent by certified,
registered or express mail, postage prepaid, and shall be deemed given when so
delivered personally or otherwise transmitted (with proper answer back
received) or, if mailed, two days after the date of mailing, as follows:
<PAGE> 15
(i) if to New WRT, to:
WRT Energy Corporation
5718 Westheimer, Suite 1201
Houston, Texas 77057
Attention: Ray Landry
(fax no. (713) 706-4083)
(ii) if to DLBW, to:
DLB Oil & Gas, Inc.
1601 N.W. Expressway, Suite 700
Oklahoma City, Oklahoma 73118-1401
Attention: Mark Liddell
(fax no. (405) 848-9449)
-and-
Wexford Management LLC
411 West Putnam Avenue
Greenwich, Connecticut 06830
Attention: Arthur Amron, Esq.
(fax no. (203) 862-7132)
with a copy to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Attention: Jeffrey S. Sabin, Esq.
(fax no. (212) 593-5955)
<PAGE> 16
(iii) if to the Disbursing Agent, to:
IBJ Schroder Bank & Trust Company
1 State Street
New York, New York 10004
Attention: Corporate Finance Trust Services
(fax no. (212) 858-2952)
(iv) if to the Committee, to:
The Official Committee of Unsecured Creditors
c/o Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038-4982
Attention: Robert Raskin, Esq.
(fax no. (212) 806-6006)
(b) Entire Agreement. This Agreement contains the entire
agreement among the parties with respect to the subject matter hereof.
(c) Amendments; Waivers. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived only by a written instrument signed by all of
the parties hereto. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any right, power or privilege
hereunder, or any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, power or privilege hereunder.
(d) No Association. This Agreement is not intended to create
and shall not be interpreted as creating an association, partnership, trust or
joint venture of any kind.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
<PAGE> 17
(f) Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Disbursing Agent and its successors and assigns and New WRT and its successors
and assigns.
(g) Severability. In the event that any provision of this
Agreement shall be held illegal or invalid for any reason, such illegality or
invalidity shall not affect the remaining parts of this Agreement, and this
Agreement shall be construed and enforced as if the illegal or invalid
provision had not been included.
(h) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
WRT ENERGY CORPORATION
By: _______________________________
Name: _____________________________
Title: ____________________________
IBJ SCHRODER BANK & TRUST COMPANY
By: _______________________________
Name: _____________________________
Title: ____________________________
<PAGE> 18
SCHEDULE OF FEES AND EXPENSES
[TO BE ADDED]
<PAGE>
EXHIBIT A
FORM OF AFFIDAVIT FOR LOST SECURITY
State of )
) : ss
County of )
The undersigned, being first duly sworn, deposes and says:
1. My name is ___________________, I am _____________ years of
age, and I reside at _________________________________.
2. I am [TITLE] of [HOLDER] and I am familiar with [HOLDER]'s
books and records.
3. [I am] [Holder is] the lawful owner of a 13 7/8% Senior Note of
New WRT Energy Corporation, a Texas corporation, numbered ________, for
$________ ([dollar amount in words]) face value, which bond has been lost or
stolen.
4. The bond was wholly owned by [me] [Holder] on the date of the
loss or theft, and has not been sold, assigned or otherwise transferred by
[me] [Holder] or with [my] [Holder's] consent.
5. After a diligent search, I have determined that the bond was
lost or stolen on or about _____________, 19__. To the best of my knowledge,
the circumstances surrounding such loss or theft are as follows:
______________________________________.
6. I have made the following attempts to find and recover the
bond, namely: _____________________________________________________________.
_________________________________
[Name of Holder]
Subscribed and sworn to this ____ day of ___________, 1997.
_____________________________
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF INDEMNITY ON PAYING LOST NOTE
WHEREAS, New WRT Energy Corporation, a Texas corporation, did, by
its note or obligation dated _____________, 19__ (the "Original Note") became
bound to pay [name of holder (the "Holder") the sum of $_________ ([dollar
amount in words]), on or before ____________, 2002; and
WHEREAS, the Original Note is alleged to be lost, or so mislaid that
it cannot be found; and
WHEREAS, ____________________ (the "Disbursing Agent"), on the date
hereof, at the request of the Holder, and on the Holder's promise of indemnity
has made to the Holder full satisfaction for the Original Note.
NOW THEREFORE, the Holder hereby agrees that:
1. It shall at all times indemnify and save the Disbursing Agent,
its successors or assigns, harmless from and against all suits, actions,
damages, costs, charges, and expenses by reason of the Original Note, or any
of the money paid on account of such Original Note.
2. It shall retain a net worth equal to the face value of the
Original Note for a period of time not less than one year from the date hereof
and shall in the event the Holder's net worth falls below such amount,
immediately post a bond to secure the indemnity provided herein.
3. If the Holder, [its heirs, executors, or administrators, or any
or either of them], finds the Original Note, or the Original Note comes into
its [, their or any of their] hands, custody or power, or the hands, custody
or power of any other person for them, then it shall deliver, or cause to be
delivered, the Original Note to the Disbursing Agent, its successors or
assigns, in order to be canceled. Upon delivery to the Disbursing Agent of
the Original Note, the obligation under this indemnity shall be void.
<PAGE>
IN WITNESS WHEREOF, I have hereunto signed my name this _____ of
___________, 1997.
_____________________________________
Name:
Title:
<PAGE>
EXHIBIT C
RELEASE OF LIEN AND PRIVILEGE
STATE OF LOUISIANA
PARISH OF __________
KNOW ALL MEN BY THESE PRESENTS, THAT:
WHEREAS, by instrument dated __________, a Lien and Privilege was
executed on behalf of _________________________________, against WRT Energy
Corporation for services rendered and materials, supplies and equipment
furnished in connection with the drilling and completion of the
____________________ well located in the ________________ of ______________
Parish, Louisiana, which Lien and Privilege was recorded on ________________,
in Book __________________ under entry Number _________________ of the
Mortgage Records of __________________ Parish, Louisiana; and
WHEREAS, the account on which said Lien and Privilege was filed has
now been satisfied and paid in full.
NOW, THEREFORE, for and in consideration of the premises,
______________________, herein represented by its duly authorized agent and
attorney-in-fact does hereby release and relinquish the above described Lien
and Privilege dated ____________, and does further authorize, direct and
empower the Clerk of the Court for _______________ Parish, Louisiana, to
cancel and erase the inscription of said Lien and Privilege from the records
of his office.
<PAGE>
IN WITNESS WHEREOF this instrument has been executed in multiple
originals in the presence of the undersigned competent witnesses on this the
____ day of _______,1997.
WITNESSES:
_____________________
_____________________
_______________________________
By:____________________________
Title:
<PAGE>
STATE OF LOUISIANA
PARISH OF _________
BEFORE ME, the undersigned authority, a Notary Public in and for the
aforesaid Parish and State, on this day personally came and appeared
________________________, who, after being duly sworn, deposed and said that
he is the Agent and Attorney-in-Fact for ____________________ and that he
executed the above and foregoing instrument for and on behalf of said
corporation as the free act and deed of said corporation.
SWORN TO AND SUBSCRIBED before me on this ____ day of ____________,
1997.
_____________________________________
NOTARY PUBLIC
STATE OF ____________________
* Pursuant to Item 102(a) of Regulation S-T, such exhibits are not required to
be refiled with this filing.
Continued on next page
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