<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
COHO ENERGY, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.01 par value per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
192481208
---------------------------------------------------------------
(CUSIP Number)
Stuart J. Lissner, Managing Director, PPM America, Inc.
225 West Wacker Drive, Suite 1200, Chicago, IL 60606 (312) 634-2501
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
April 3, 2000
---------------------------------------------------------------
(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(e) or Rule 13d-1(g), check the
following box [_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) 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
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 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).
<PAGE>
SCHEDULE 13D
CUSIP NO. 192481208 Page 2 of 10 Pages
-----------------
- ------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PPM America Special Investments Fund, L.P.
36-408-6849
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware, USA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
None
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 2,374,163
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
None
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
2,374,163
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,374,163
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
12
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
14.84%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 192481208 Page 3 of 10 Pages
-----------------
- ------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PPM America Fund Management GP, Inc.
36-408-6845
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware, USA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
None
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 2,374,163/1/
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
None
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
2,374,163/1/
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,374,163/1/
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
12
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
14.84%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
- ----------------------------
/1/ All of the securities covered by this report are owned legally by PPM
America Special Investments Fund, L.P. ("SIF I"), and none are owned directly or
indirectly by PPM America Fund Management GP, Inc. ("SIF I GP"). SIF I GP is the
general partner of SIF I. As permitted by Rule 13d-4, the filing of this
statement shall not be construed as an admission that SIF I GP is the beneficial
owner of any of the securities covered by this statement.
<PAGE>
SCHEDULE 13D
CUSIP NO. 192481208 Page 4 of 10 Pages
-----------------
- ------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PPM America Special Investments CBO II, L.P.
98-017-9401
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware, USA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
None
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 2,880,190
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
None
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
2,880,190
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,880,190
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
12
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
18.00%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 192481208 Page 5 of 10 Pages
-----------------
- ------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PPM America CBO II Management Company
98-017-9391
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware, USA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
None
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 2,880,190/2/
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
None
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
2,880,190/2/
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,880,190/2/
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
12
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
18.00%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
- ----------------------------
/2/ All of the securities covered by this report are owned legally by PPM
America Special Investments CBO II, L.P. ("CBO II"), and none are owned directly
or indirectly by PPM America CBO II Management Company ("CBO II GP"). CBO II GP
is the general partner of CBO II. As permitted by Rule 13d-4, the filing of this
statement shall not be construed as an admission that CBO II GP is the
beneficial owner of any of the securities covered by this statement.
<PAGE>
SCHEDULE 13D
CUSIP NO. 192481208 Page 6 of 10 Pages
-----------------
- ------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PPM America, Inc.
36-371-4794
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware, USA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
None
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 5,254,353/3/
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
None
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
5,254,353/3/
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
5,254,353/3/
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
12
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
32.84%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IA
- ------------------------------------------------------------------------------
- ----------------------------
/3/ All of the securities covered by this report are owned legally by SIF I or
CBO II, and none are owned directly or indirectly by PPM America, Inc. PPM
America, Inc. is the investment manager/adviser of both SIF I and CBO II. As
permitted by Rule 13d-4, the filing of this statement shall not be construed as
an admission that PPM America, Inc. is the beneficial owner of any of the
securities covered by this statement.
<PAGE>
Item 1. Security and Issuer.
-------------------
The class of equity securities to which this statement relates is the
common stock, $0.01 par value (the "Common Stock"), of Coho Energy, Inc., a
Texas corporation (the "Company"). The principal executive offices of the
Company are located at 14785 Preston Road, Suite 860, Dallas, Texas 75240.
Item 2. Identity and Background.
-----------------------
(1) PPM America Special Investments Fund, L.P. ("SIF I")
(2) PPM America Fund Management GP, Inc. ("SIF I GP")
(3) PPM America Special Investments CBO II, L.P. ("CBO II")
(4) PPM America CBO II Management Company ("CBO II GP")
(5) PPM America, Inc. ("PPM America")
Collectively referred to hereinafter as "PPM"
Each of SIF I, SIF I GP, CBO II, CBO II GP, and PPM America is organized
under the laws of the State of Delaware. SIF I and CBO II are investment funds.
SIF I GP serves as the managing general partner of SIF I. CBO II GP serves as
the general partner of CBO II. PPM America serves as investment manager/adviser
to each of SIF I and CBO II. The principal business of PPM America is performing
investment advisory services for clients. The address for SIF I, SIF GP, CBO II,
and CBO II GP is:
225 West Wacker Drive
Suite 1100A
Chicago, Illinois 60606
The address for PPM America is:
225 West Wacker Drive
Suite 1200
Chicago, Illinois 60606
The directors and officers of SIF I GP are as follows:
Directors: Officers:
- --------- --------
Russell W. Swansen Russell W. Swansen (President)
F. John Stark, III F. John Stark, III (Secretary, General
Counsel and Executive V.P.)
Bruce Gorchow Mark B. Mandich (Treasurer and V.P.)
Michael E. Salvati Bruce Gorchow (Executive V.P.)
Willard R. Hildebrand Kenneth J. Schlemmel (Senior Managing
Director)
Stuart J. Lissner (Managing Director
and Asst. Secretary)
All of the directors and officers of SIF I GP are United States citizens.
The managing general partner of CBO II GP is PPM MGP (Bermuda), Ltd. ("PPM
MGP"). PPM MGP is a Bermuda corporation. The officers and directors of PPM MGP
are as follows:
Directors: Officers:
- --------- --------
Russell W. Swansen Russell W. Swansen (President)
F. John Stark, III F. John Stark, III (Assistant Secretary,
General Counsel and Executive V.P.)
James Macdonald Mark B. Mandich (Treasurer and Executive
V.P.)
<PAGE>
John Charles Ross Collis Stuart J. Lissner (V.P.)
Donald H. Malcolm Michael B. Ashford (Secretary)
Frank Miller
Charles Macaluso
All of the directors and officers of PPM MGP other than Messrs. Macdonald,
Collis, Malcolm and Ashford are United States citizens. Messrs. Macdonald,
Collis, Malcolm and Ashford are citizens of Bermuda.
The special general partner of CBO II GP is PPM America Executive Employee II,
L.L.C. ("PPM AEE"). The manager of PPM AEE is PPM Holdings, Inc.
The directors and officers of PPM America are as follows:
Directors: Officers:
- --------- --------
Russell W. Swansen Russell W. Swansen (President)
F. John Stark, III F. John Stark, III (Executive V.P.,
General Counsel-Special Investments Group
and Secretary)
Mark B. Mandich Leandra Knes (Executive V.P. and CIO)
Bruce Gorchow (Executive V.P.)
Richard S. Brody (Executive V.P.)
Mark B. Mandich (Executive V.P.
and Treasurer)
Stuart J. Lissner (Managing Director)
All of the directors and officers of PPM America are United States citizens.
No disclosure under Item 2(d) or 2(e) is required with respect to any of the
above-named persons.
Schedule I contains certain information concerning the parent companies of SIF I
GP, PPM MGP and PPM America.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The 5,254,353 shares of the Company's Common Stock referred to herein
were distributed to PPM by the Company pursuant to the consummation of its Plan
of Reorganization under Chapter 11 of the United States Bankruptcy Code on
account of the claims held by SIF I and CBO II against the Company in that
proceeding. Such claims arose from their prior ownership of $51,305,000
aggregate principal amount of the Company's 8 7/8% Senior Subordinated Notes,
due 2007 (the "Old Notes"), which were extinguished pursuant to the terms of the
Plan of Reorganization.
SIF I and CBO II did not pay additional consideration for the shares of
Common Stock which they received pursuant to the Company's Plan of
Reorganization. The source of funds which they used for their respective prior
purchases of the Company's Old Notes was funds previously invested in SIF I and
CBO II, respectively, by the limited partners of SIF I and CBO II and the
purchasers of debt of SIF I and CBO II.
Item 4. Purpose of Transaction.
----------------------
As described in the response to Item 3 above, the shares beneficially
owned by PPM were acquired pursuant to the terms of the Company's Plan of
Reorganization on account of claims in the Company's Chapter 11 proceeding. PPM
intends to hold the shares for investment purposes. PPM may acquire additional
shares, dispose of some or all of the shares from time to time, in each case in
open market transactions, block sales or purchases or otherwise, or may continue
to hold all of the shares. PPM may also dispose of some or all of the shares in
one or more registered public offerings pursuant to the terms of the
Registration Rights Agreement described in the response to Item 6 below.
<PAGE>
So long as PPM and its affiliates collectively are one of the largest
shareholders of the Company, PPM may seek to influence the control of the
Company.
Item 5. Interest in Securities of the Issuer.
------------------------------------
Based upon information acquired from the Company, there were a total of
16,002,195 shares of Common Stock outstanding as of April 10, 2000. Therefore,
PPM's beneficial ownership of shares constitutes approximately 32.84% of the
issued and outstanding Common Stock. As of the date of hereof:
SIF I beneficially owned 2,374,163 shares of Common Stock, constituting
approximately 14.84% of the issued and outstanding shares of the Company's
Common Stock. SIF I shares voting and dispositive power with respect to these
2,374,163 shares of Common Stock with SIF I GP, its managing general partner and
PPM America, which serves as its investment advisor/manager.
CBO II beneficially owned 2,880,190 shares of Common Stock, constituting
approximately 18.00% of the issued and outstanding shares of the Company's
Common Stock. CBO II shares voting and dispositive power with respect to these
2,880,190 shares of Common Stock with CBO II GP, its general partner and PPM
America, which serves as its investment advisor/manager.
Reference is made to the response to Item 6 below, which is hereby
incorporated herein, for a description of additional shares of Common Stock
which are to be issued to SIF I and CBO II in the future pursuant to the terms
of the Securities Purchase Agreement described therein.
(c) PPM has not effected any transactions in the Common Stock during the
sixty days preceding the date of this Schedule 13D.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Undertakings or Relationships with Respect to
----------------------------------------------------------------------
Securities of the Issuer.
- ------------------------
PPM is a party to two agreements which relate to Common Stock of the Company,
a Securities Purchase Agreement and a Registration Rights Agreement, which are
each described below. In addition, PPM was one of three bondholder members of
the Official Committee of Unsecured Creditors in the Company's Chapter 11
proceeding (the "Committee"). The Committee in turn was a co-proponent of the
Company's Plan of Reorganization which was consummated in that proceeding.
Pursuant to the terms of the Plan of Reorganization, which was confirmed by the
United States Bankruptcy Court for the Southern District of Texas pursuant to an
order entered on March 20, 2000, the Company's certificate of incorporation and
by-laws were amended and restated in their entirety and the three bondholder
members of the Committee collectively designated four members of the Company's
new seven member board of directors for the first year of its tenure. To date
the bondholder members of the Committee have designated three such directors:
Eugene Davis, James Bolin and John Graham. Pursuant to the terms of the Plan,
the Committee's existence terminated for all practical purposes at midnight on
March 31, 2000. A copy of the Plan of Reorganization is attached as Exhibit I.
SIF I and CBO II are also parties to a Securities Purchase Agreement dated as
of March 31, 2000 pursuant to which the Company issued $72 million principal
amount of its 15% Senior Subordinated Notes due March 31, 2007 ("New Senior
Notes") in connection with the consummation of the Company's Plan of
Reorganization. Pursuant to that agreement, the Company will issue, for no
further consideration, additional shares of its Common Stock equal to an
aggregate of 14.4% of the outstanding Common Stock of the Company, calculated on
a fully diluted basis, to the purchasers of its Senior Notes on the earlier to
occur of the closing of a pending rights offering by the Company, if the Company
is able to include such additional shares in its registration statement for the
rights offering, or six months after consummation of such rights offering.
Without giving effect to increases in the number of shares which may be issued
pursuant to antidilution adjustments which cannot be calculated at this time,
SIF I will receive 672,989 additional shares of Common Stock and CBO II will
receive 803,849 additional shares of Common Stock pursuant to the Securities
Purchase Agreement. Under the terms of the Plan of Reorganization, the
purchasers of the New Senior Notes collectively were also entitled to designate
two additional members of the new board of directors of the Company for the
first year of its tenure. The directors so designated were Ronald Goldstein and
Michael Salvati. A copy of the Securities Purchase Agreement is attached hereto
as Exhibit II.
SIF I and CBO II are also parties to a Registration Rights Agreement with the
Company pursuant to which the Company has granted the following registration
rights with respect to all of the shares of Common Stock which are the subject
of this filing as well as all of the shares of Common Stock to be issued
pursuant to the Securities Purchase Agreement referred to above:
<PAGE>
(i) The Company will use its best efforts to cause a shelf registration
statement for all such shares of Common Stock to be declared effective by March
31, 2001, and to remain effective until the earlier of March 31, 2004, the
disposition of all such shares or such time as all such shares can be sold by
the parties to such agreement without restriction under the Securities Act of
1933;
(ii) After March 31, 2001, the holder or holders of at least 10 percent
of the Common Stock which is subject to such agreement may require the Company
to file a registration statement with respect to such stock;
(iii) Each time the Company files a registration statement with respect
to any offering of shares of its Common Stock, the parties to such agreement
may, subject to certain limitations, require the inclusion of their shares of
Common Stock in the offering; and
(iv) At any time when the Company is entitled to use Form S-3 under the
Securities Act of 1933 or any successor form thereto to register shares of
Common Stock held by a party to such agreement, the parties to such agreement
have the right to request the Company to use commercially reasonable efforts to
register their shares of Common Stock on such form.
The responses set forth in Items 4 and 5 of this Schedule are also
incorporated herein by this reference in their entirety. A copy of the
Registration Rights Agreement is attached hereto as Exhibit III.
Item 7. Material to be Filed as Exhibits.
--------------------------------
1. Schedule I
2. Exhibit I - Plan of Reorganization
3. Exhibit II - Securities Purchase Agreement
4. Exhibit III - Registration Rights Agreement
<PAGE>
Signature
After reasonable inquiry and to the best of its knowledge and belief, each
of the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Date: April 10, 2000 PPM America, Inc.
By: /s/ Stuart J. Lissner
------------------------------------
Name: Stuart J. Lissner
Title: Managing Director
PPM America Special Investments Fund, L.P.
By: PPM America Fund Management GP, Inc.
its managing general partner
By: /s/ Stuart J. Lissner
----------------------------------
Name: Stuart J. Lissner
Title: Managing Director
PPM America Fund Management GP, Inc.
By: /s/ Stuart J. Lissner
---------------------------------
Name: Stuart J. Lissner
Title: Managing Director
<PAGE>
PPM America Special Investments CBO II, L.P.
By: PPM America CBO II Management Company, its
General Partner
By: PPM MGP (BERMUDA), LTD.
As Managing General Partner of the General Partner
By: /s/ Stuart J. Lissner
-------------------------------------
Name: Stuart J. Lissner
Title: Vice President
PPM America CBO II Management Company
By: PPM MGP (BERMUDA), LTD.
its Managing General Partner
By: /s/ Stuart J. Lissner
--------------------------------------
Name: Stuart J. Lissner
Title: Vice President
<PAGE>
SCHEDULE I
CERTAIN INFORMATION CONCERNING THE PARENT COMPANIES OF PPM
----------------------------------------------------------
SIF I GP, PPM MGP and PPM America are all 100% owned by PPM Holdings, Inc.,
a Delaware corporation ("Holdings"). The address of the principal executive
offices of Holdings is 225 West Wacker Drive, Suite 1200, Chicago, IL 60606.
Holding's directors and officers are as follows:
Directors: Officers:
Russell W. Swansen Russell W. Swansen (President)
F. John Stark, III F. John Stark, III (Secretary)
Mark B. Mandich Mark B. Mandich (Treasurer)
All of the directors and officers of Holdings are United States citizens.
To the knowledge of PPM, no disclosure under Item 2(d) or 2(e) is required with
respect to Holdings.
Holdings' sole stockholder is Brooke Holdings Inc., which is a wholly-owned
direct subsidiary of Holborn Delaware Partnership ("Holborn"). The partners of
Holborn are Prudential One Limited ("POL") (80% Partnership Interest),
Prudential Two Limited (10% Partnership Interest) and Prudential Three Limited
(10% Partnership Interest). The sole stockholder of POL is Prudential
Corporation Holdings Limited ("Prudential Holdings').
To the knowledge of PPM, no disclosure under Item 2(d) or 2(e) is required
with respect to POL or Prudential Holdings.
Prudential plc, a UK public limited company ("Prudential"), is the sole
shareholder of Prudential Holdings and the ultimate parent of PPM. The address
of the principal executive offices of Prudential is Laurence Pountney Hill,
London EC4R OEU. Prudential's directors and (officers) are as follows:
Sir Martin Jacomb (Chairman)
Sir Roger Hurn (Chairman Designate)
M. D. Abrahams (Deputy Chairman)
J. W. Bloomer (Chief Executive)
P. M. Maynard (Secretary)
Sir David Barnes
K. L. Bedell-Pearce
J. A. Burdus
D.A. Higgs
B. A. Macaskill
R. O. Rowley
A. D. Stewart
M. E. Tucker
To the knowledge of PPM, no disclosure under Item 2(d) or 2(e) is required with
respect to Prudential.
<PAGE>
Exhibit I
Michael W. Anglin
State Bar No. 01260800
Louis R. Strubeck, Jr.
State Bar No. 19425600
Fulbright & Jaworski L.L.P.
2200 Ross Avenue, Ste. 2800
Dallas, Texas 75201
(214) 855-8000 (214) 855-8200 Facsimile
COUNSEL FOR THE DEBTORS
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
In re: ss. Case No. 399-35929-HCA-11
COHO ENERGY, INC., ss. Case No. 399-35930-HCA-11
COHO RESOURCES, INC., ss. Case No. 399-35934-HCA-11
COHO OIL & GAS, INC., ss. Case No. 399-35932-HCA-11
INTERSTATE NATURAL GAS COMPANY ss. Case No. 399-35933-HCA-11
COHO LOUISIANA PRODUCTION COMPANY ss. Case No. 399-35935-HCA-11
COHO EXPLORATION, INC.,
ss.Jointly Administered Under
Debtors In Possession ss.Case No. 399-35929-HCA-1I
DEBTORS' FIRST AMENDED AND RESTATED
CHAPTER 11 PLAN OF REORGANIZATION
<PAGE>
DEBTORS' FIRST AMENDED AND RESTATED
PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE
UNITED STATES BANKRUPTCY CODE
TABLE OF CONTENTS
<TABLE>
Page
----
<S> <C>
ARTICLE I SUMMARY OF THIS PLAN ................................................................... 1
ARTICLE II DEFINITIONS, CONSTRUCTION AND INTERPRETATION ........................................... 2
ARTICLE III CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS .......................................... 10
ARTICLE IV IDENTIFICATION OF CLAIMS AND EQUITY INTERESTS IMPAIRED BY THE PLAN ..................... 11
ARTICLE V PROVISIONS FOR TREATMENT OF ALLOWED ADMINISTRATIVE EXPENSE CLAIMS (CLASS 1) ............ 11
ARTICLE VI PROVISIONS FOR TREATMENT OF ALLOWED PRIORITY TAX CLAIMS (CLASS 2) ...................... 11
ARTICLE VII PROVISIONS FOR TREATMENT OF THE ALLOWED BANK GROUP CLAIM (CLASS 3) ..................... 12
ARTICLE VIII PROVISIONS FOR TREATMENT OF MISCELLANEOUS SECURED CLAIMS (CLASS 4) ..................... 12
ARTICLE IX PROVISIONS FOR TREATMENT OF ALLOWED BOND CLAIMS (CLASS 5) .............................. 13
ARTICLE X PROVISIONS FOR TREATMENT OF ALLOWED GENERAL UNSECURED CLAIMS (CLASS 6) ................. 13
ARTICLE XI PROVISIONS FOR TREATMENT OF ALLOWED ADMINISTRATIVE CONVENIENCE CLAIMS (CLASS 7) ........ 13
ARTICLE XII PROVISIONS FOR TREATMENT OF INTERESTS OF EQUITY SECURITY HOLDERS OF COHO
ENERGY, INC. (CLASS 8) ................................................................ 14
ARTICLE XIII MEANS FOR EXECUTION OF THE PLAN ........................................................ 14
ARTICLE XIV EXECUTORY CONTRACTS AND UNEXPIRED LEASES ............................................... 20
ARTICLE XV EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS ................................... 22
ARTICLE XVI PROVISIONS FOR RESOLUTION AND TREATMENT OF PREFERENCES, FRAUDULENT
CONVEYANCES, AND DISPUTED CLAIMS ...................................................... 22
ARTICLE XVII PROVISIONS FOR RETENTION, ENFORCEMENT, SETTLEMENT, OR ADJUSTMENT
OF CLAIMS BELONGING TO THE ESTATE ..................................................... 23
ARTICLE XVIII CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN ...................... 23
ARTICLE XIX RETENTION OF JURISDICTION .............................................................. 25
ARTICLE XX DEFAULT UNDER PLAN ..................................................................... 26
ARTICLE XXI MISCELLANEOUS PROVISIONS ............................................................... 27
</TABLE>
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COHO ENERGY, INC.; COHO RESOURCES, INC.; COHO OIL & GAS, INC.; COHO
EXPLORATION, INC.; COHO LOUISIANA PRODUCTION COMPANY; and INTERSTATE NATURAL GAS
COMPANY (the "Debtors"), and the Official Committee of Unsecured Creditors
propose this Plan of Reorganization (the "Plan"), pursuant to section 1121 (a),
title 11, United States Code, for the resolution of the Debtors' outstanding
Creditor Claims and Equity Interests.
ARTICLE I
SUMMARY OF THIS PLAN
Capitalized terms used in the following summary are as defined in Article
II, the Definitions, Construction and Interpretation portion of this Plan.
This Plan provides for the treatment of all Claims in a manner that is in
the best interests of Creditors and is fair and equitable. This Plan also
provides for fair and equitable treatment of holders of Equity Interests in the
Parent Company. This summary deals with certain major elements of this Plan.
This Plan provides for the treatment of the Allowed Bank Group Claim of
approximately $240 million of principal (plus accrued interest and reasonable
fees and expenses) as a Fully Secured Claim. On the Effective Date the Allowed
Bank Group Claim will be paid in full in Cash. The Parent Company will obtain
the funds necessary for the payment of the Allowed Bank Group Claim through the
combination of (i) the Credit Facility, (ii) either the Rights Offering or the
Private Placement, (iii) cash on hand from the Debtor's operations and (iv) the
Standby Loan, if necessary.
Under this Plan, approximately $162 million of Allowed Bond Claims will be
paid in full by issuing the holders of Existing Bonds 96% of the New Common
Stock of the Reorganized Parent Company on the Effective Date of the Plan. The
ownership percentage of the holders of Allowed Bond Claims may be diluted by (i)
the Rights Offering or the Private Placement and (ii) the Standby Loan, if
necessary.
Holders of Existing Common Stock in the Parent Company as of the Voting
Record Date will be issued 4% of the shares of the New Common Stock on the
Effective Date and holders of Existing Common Stock as of the Rights Offering
Record Date will receive rights to purchase additional shares of New Common
Stock under the Rights Offering, which will be made in a separate prospectus
sent to such holders of Existing Common Stock. The ownership percentage of the
holders of Existing Common Stock may be diluted by (i) either the Rights
Offering or the Private Placement and (ii) the Standby Loan, if necessary.
To implement this Plan, the Reorganized Debtors will raise up to $90
million of new investment in the Reorganized Parent Company by (i) either the
Rights Offering or the Private Placement, and (ii) if applicable, the Standby
Loan. Under the Rights Offering, which will be made pursuant to a separate
prospectus, holders of Existing Common Stock as of the Rights Offering Record
Date will have the exclusive first opportunity to buy additional shares of the
New Common Stock for a price of $0.26 per current share, up to an aggregate of
$90 million. Holders of Existing Common Stock as of the Rights Offering Record
Date who wish to purchase more than their allocable portion of the shares
offered to them in the Rights Offering may do so, to the extent that other
shareholders do not elect to participate in the Rights Offering. If the Rights
Offering is not fully subscribed up to $90 million by holders of Existing Common
Stock as of the Rights Offering Record Date, then the Parent Company may offer
the remaining shares of the New Common Stock to third parties pursuant to the
Rights Offering. In connection with the Rights Offering, the Parent Company
filed a registration statement with the SEC to register the Rights and to
register shares of New Common Stock under the Rights Offering. If the lithe
registration statement filed with the SEC is not declared effective by a date
sufficiently early to give the Parent Company adequate time to arrange and
complete the Rights Offering the Parent Company will, in its sole discretion,
discontinue the Rights Offering and proceed with the Private Placement. The
Rights Offering or Private Placement will be arranged by Jefferies & Company,
Inc., or another investment banker, subject to the approval of the Bankruptcy
Court. Jefferies & Company, Inc., or another investment banker, will be retained
by the Parent Company for the limited purpose of arranging the Rights Offering
or Private Placement and not as a general financial advisor to the Debtors.
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To the extent that the proceeds of the Rights Offering or the Private
Placement are less than $90 million, the Debtors will issue, and the Standby
Lenders will purchase, an amount of senior subordinated notes to be determined
by the Reorganized Parent Company. This amount will be a maximum of $70 million
given the current level of commitment under the Standby Loan and a maximum of
$90 million if more Standby Loan commitments are obtained and made available
before the conclusion of the Confirmation Hearing, or the Effective Date if the
Debtors choose to extend the Rights Offering to that date. Payment of the
Standby Loan Notes will be expressly subordinate to the full and final payment
in cash of all obligations arising in connection with the Credit Facility and
payments made under the Standby Loan will be subject to the consent of Chase.
The Standby Loan is not conditioned on any minimal Rights Offering subscription
or Private Placement sale.
If the Reorganized Parent Company draws on the Standby Loan, the Standby
Lenders will receive the Standby Shares. If $70 million in principal amount of
the Standby Loan Notes are issued, the Standby Lenders will receive 14% of the
fully diluted New Common Stock. The amount of Standby Shares issued will be
adjusted ratably according to the actual amount of Standby Loan Notes issued.
The Standby Shares issued to the Standby Lenders will be in addition to the
shares of New Common Stock issued to holders of Existing Bonds, holders of
Existing Common Stock and to persons participating in the Rights Offering or
Private Placement. The manner in which shares of New Common Stock are subject to
dilution is illustrated in the Disclosure Statement.
ARTICLE II
DEFINITIONS, CONSTRUCTION AND INTERPRETATION
As used in the Plan, the following terms shall have the meanings specified
below.
2.1 Actual Price: The weighted average of the price received by the
Reorganized Debtors for all of their oil and gas production, including hedged
and unhedged production (net of hedging costs) in dollars per barrel of oil
equivalent using a 6:1 conversion ratio for natural gas.
2.2 Administrative Convenience Claim: Any Claim in the amount of
$1,000 or less.
2.3 Administrative Expense: Any cost or expense of administration of
the Chapter 11 Case incurred on or before the Confirmation Date entitled to
priority under section 507(a)(1) and allowed under section 503(b) of the
Bankruptcy Code, including (i) any actual and necessary expenses of preserving
the Debtors' estate, including wages, salaries or commissions for services
rendered after the commencement of the Chapter 11 Case, certain taxes, fines and
penalties any actual and necessary expenses of operating the business of the
Debtors, any indebtedness or obligations incurred by or assessed against the
Debtors in connection with the conduct of its business, or for the acquisition
or lease of property or for provision of services to the Debtors, including all
allowances of compensation or reimbursement of expenses to the extent allowed by
the Bankruptcy Court under the Bankruptcy Code, and any fees or charges assessed
against the Debtors' estate under chapter 123, title 28, United States Code and
(ii) the reasonable fees and expenses of the Indenture Trustee under the
Existing Bond Indenture, including the reasonable fees and expenses of its
professionals to be paid under the terms of the Existing Bond Indenture, upon
application to the Bankruptcy Court.
2.4 Allowed: When used in connection with a Claim, any Claim against or
Equity Interest in the Debtors, proof of which was filed on or before the last
date designated by the Bankruptcy Court as the last date for filing proofs of
Claim or Equity Interest or such other applicable date as ordered by the
Bankruptcy Court or permitted by the Bankruptcy Rules; or, if no proof of Claim
or Equity Interest is filed, any Claim against or Equity Interest in the Debtors
which has been or in the future is listed by the Debtors as liquidated in amount
and not disputed or contingent and a Claim or Equity Interest as to which no
objection to the allowance thereof has been interposed; or, in the case of
Administrative Expense Claim recognized as such by the Debtors, such Claim or
Equity Interest has been allowed in whole or in part by a Final Order. Unless
otherwise specified in the Plan, "Allowed Claim" shall not, for the purposes of
computation or Distributions under the Plan, include postposition interest on
the amount of the Claim.
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2.5 Amended Employment Agreement: An amended and restated form of an
existing employee's employment agreement in a form acceptable to the Debtors,
the Creditors Committee and the employee which is executed by the employee and
the Debtors and filed with the Bankruptcy Court by March 1, 2000.
2.6 Amended and Restated Articles of Incorporation: The amended and
restated articles of incorporation of Coho Energy, Inc. that are approved
pursuant to this Plan and that shall go into effect on the Effective Date.
2.7 Appaloosa: Appaloosa Management, L.P.
2.8 Bank Group: MeesPierson Capital Corp.; Paribas, Houston Agency;
Christiania Bank OG Kreditkasse, ASA; Den Norske Bank ASA; Bank of Scotland;
Bank One, Texas, N.A.; Credit Lyonnais New York Branch; and Toronto Dominion
(Texas), Inc.
2.9 Bank Group Claim: The aggregate of all Claims asserted in connection
with the Existing Bank Group Loan Agreement, including, but not limited to,
approximate amount of $240 million of principal, plus accrued interest,
reasonable attorney's fees and reasonable expenses.
2.10 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as amended, title
11, United States Code, as applicable to this Chapter 11 case.
2.11 Bankruptcy Court: The United States District Court for the Northern
District of Texas, Dallas Division, having jurisdiction over the Chapter 11
Case, or in the event such Court ceases to exercise jurisdiction over the
Chapter 11 Case, such court or adjunct thereof that exercises jurisdiction over
the Chapter 11 Case in lieu of the United States Bankruptcy Court for the
Northern District of Texas, Dallas Division.
2.12 Bankruptcy Rules: The Federal Rules of Bankruptcy Procedure, as
amended, and the local rules of the Bankruptcy Court, as applicable to this
Chapter 11 Case.
2.13 Base Rate: The floating annual interest rate established by Chase
from time to time as its base rate of interest and which may not be the lowest
or best interest rate charged by Chase on loans similar to the Credit Facility.
2.14 Bond Claims: Claims asserted by the holders of Existing Bonds issued
in connection with the Existing Bond Indenture.
2.15 Cash: Cash, cash equivalents and other readily marketable
securities or instruments issued by a Person other than a Debtor, including
readily marketable direct obligations of the United States of America,
certificates of deposit issued by banks and commercial paper of any entity,
including interest accrued or earned thereon.
2.16 Chapter 11 Case: The case under Chapter 11 of the Bankruptcy Code in
which the Debtors are the Debtors-in-Possession.
2.17 Chase: The Chase Manhattan Bank, as agent for the Lenders under the
Credit Facility.
2.18 Chase Commitment Letter: Letter dated December 9, 1999 from Chase to
the Debtors containing the Lenders' fees for arranging the Credit Facility and
the terms of the Lenders' commitment.
2.19 Claim: Any right to payment from any of the Debtors arising at any
time before the Effective Date, whether or not the right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured; or any right to any
equitable remedy for future performance if the applicable breach gives rise to a
right of payment from any of the Debtors, whether or not the right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.
2.20 Collateral: The following property of the Debtors: (i) the issued and
outstanding capital stock and other equity interests of all existing or
hereafter created or acquired direct and indirect subsidiaries of the Parent
Company, (ii) certain proved mineral interests selected by Chase having a
present value, as
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determined by Chase, of not less than eighty-five percent (85%) of the present
value of all proved mineral interests of the Debtors evaluated by the Lenders
for purposes of determining the borrowing base, and (iii) other tangible and
intangible assets of the Debtors.
2.21 Confirmation Date: The date on which the Bankruptcy Court enters the
Confirmation Order.
2.22 Confirmation Hearing: The Bankruptcy Court hearing to confirm the
Plan, scheduled for March 15, 2000.
2.23 Confirmation Order: A Final Order of the Bankruptcy Court confirming
the Plan in accordance with the provisions of Chapter II of the Bankruptcy Code.
2.24 Credit Agreement: The Senior Revolving Credit Agreement to be
entered into by the Parent Company, the Lenders and Chase in connection with the
Credit Facility.
2.25 Credit Facility: A Senior Revolving Credit Facility of up to $250
million from the Lenders with Chase as agent.
2.26 Creditor: Any person that holds a Claim against a Debtor that arose
on or before the Effective Date, or a Claim against a Debtor of any kind
specified in sections 502(f), 502(g), 502(h) or 502(i) of the Bankruptcy Code.
2.27 Creditors Committee: The Official Committee of Unsecured Creditors in
Chapter 11 Case.
2.28 Debtors: Coho Energy, Inc., a Texas corporation; Coho Resources,
Inc., a Nevada corporation; Coho Oil & Gas, Inc., a Delaware corporation; Coho
Exploration, Inc., a Delaware corporation; Coho Louisiana Production Company, a
Delaware corporation; and Interstate Natural Gas Company, a Delaware
corporation.
2.29 Debtors' Schedules: The Schedules of Assets and Liabilities,
Statement of Financial Affairs and Statement of Executory Contracts, as each may
be amended, filed by the Debtors with the Bankruptcy Court in accordance with
section 521 (1) of the Bankruptcy Code.
2.30 Disclosure Statement: The Disclosure Statement under 11 U.S.C. ss.
1125, filed by the Debtor in connection with this Plan on December 21, 1999, as
amended.
2.31 Disputed Claim: A Claim against a Debtor (a) as to which an objection
has been filed on or before the deadline for objecting to a Claim by the Debtors
or any party in interest and which objection has not been withdrawn or resolved
by entry of a Final Order, (b) a Claim that has been asserted in an amount
greater than that listed in the Debtors' Schedules as liquidated in an amount
and not disputed or contingent, or (c) that the Debtors' Schedules list as
contingent, unliquidated or disputed.
2.32 Disputed Claims Reserve: A segregated account to be held in trust by
the Debtors for the benefit of holders of Disputed Claims in accordance with the
provisions of Article XV of the Plan.
2.33 Distribution: The property required by the Plan to be distributed to
the holders of Allowed Claims.
2.34 Effective Date: A date eleven or more days after entry of the
Confirmation Order on which the Plan is consummated by the occurrence of the
following: (i) the Existing Common Stock is extinguished and shares of the New
Common Stock have been issued to the holders of the Existing Common Stock; (ii)
the Existing Bonds are extinguished and shares of the New Common Stock are
issued to the holders of the Existing Bonds; (iii) the Bank Group Claim is paid
in full; (iv) the Credit Agreement is executed and delivered; (v) funds are
received from the Rights Offering or Private Placement and New Common Stock is
issued to such subscribers; and (vi) the Standby Loan is funded, if necessary,
in each case, in accordance with the terms of this Plan.
2.35 Employee Benefit Plan: An employee benefit plan as defined in section
3(3) of the Employee Retirement Income Security Act of 1974, as amended from
time to time, together with all regulations issued pursuant thereto, (and
including any plan established pursuant to section 401 (k) of the Internal
Revenue Code of 1986, as amended) that is now or was previously maintained,
sponsored or contributed to by a Debtor.
2.36 Equity Interest: Any equity interest in the Parent Company by
ownership of Existing Common Stock, including any warrants or options to acquire
any Existing Common Stock and any rights pertaining to
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the Existing Common Stock, including voting rights, rights to receive dividends
or other distributions, rights to request or demand any shares to be registered
under securities laws, rights to nominate directors or to otherwise determine
membership on a board of directors or any committee of a board of directors,
rights to approve or to withhold approval of any matters pertaining to the
Parent Company, rights to acquire any additional securities of the Parent
Company or to acquire any rights with respect to those securities, and any
rights to receive proceeds from any liquidation or dissolution of the Parent
Company.
2.37 Eurodollar Rate: The annual interest rate equal to the London
interbank offered rate for deposits in United States dollars that are offered to
Chase.
2.38 Existing Bank Group Loan Agreement: The Fourth Amended and Restated
Credit Agreement dated December 18, 1997, among Coho Resources, Inc.; Coho
Louisiana Production Company; Coho Exploration, Inc.; Coho Oil & Gas, Inc.; Coho
Energy, Inc., Interstate Natural Gas, a Delaware corporation; and the members of
the Bank Group; the Fourth Amended and Restated Credit Agreement dated December
18, 1997, as supplemented and amended and all related documents, by and between
the Debtors and the Bank Group.
2.39 Existing Bond Indenture: The Indenture dated October 1, 1997, as
amended by the First Supplemental Indenture dated September 2, 1998, among Coho
Energy, Inc., the subsidiary guarantors named therein and HSBC Bank USA,
formerly known as Marine Midland Bank.
2.40 Existing Bonds: The Bonds issued before the Petition Date under the
Existing Bond Indenture.
2.41 Existing Common Stock: The common stock of the Parent Company, $0.01
par value, existing before the Effective Date.
2.42 Final Order: An order that is no longer subject to appeal, certiorari
proceeding or other proceeding for review or rehearing, and as to which no
appeal, certiorari proceeding, or other proceeding for review or rehearing shall
then be pending.
2.43 Fully Secured Claim: A Claim secured by a lien on property whose
value exceeds the Allowed amount of that Claim pursuant to section 506(a) of the
Bankruptcy Code.
2.44 General Unsecured Claims: A Claim other than a Bond Claim not secured
by a charge against or interest in property in which the Debtors' estate has an
interest.
2.45 Lenders: A syndicate of lenders under the Credit Facility.
2.46 Miscellaneous Secured Claim: A secured claim under section 506 of the
Bankruptcy Code other than the Bank Group Claim, including properly perfected
mechanic's and materialman's lien claims.
2.47 New Common Stock: The common stock, $0.01 par value, of the
Reorganized Parent Company from and after the Effective Date.
2.48 Pacholder: Pacholder Associates, Inc.
2.49 Parent Company: Coho Energy. Inc., a Texas corporation.
2.50 Oaktree: Oaktree Capital Management, LLC.
2.51 Person: An individual, a corporation, a limited liability company. a
partnership, an association, a joint stock company, a joint venture, an estate,
a trust, an unincorporated association or organization, a government or any
agency or subdivision thereof or any other entity.
2.52 Petition Date: August 23. 1999, the date on which the Debtors filed
their voluntary Chapter 11 petition.
2.53 Plan: This Plan of Reorganization under Chapter 11 of the United
States Bankruptcy Code. either in its present form or as it may be altered,
amended, or modified from time to time.
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2.54 Plan Participants: Debtors, Reorganized Debtors, the Creditors
Committee and members thereof, the Indenture Trustee under the Existing Bond
Indenture, and directors, officers, employees and advising professionals of all
of the preceding.
2.55 PPM America: PPM America, Inc.
2.56 Private Placement: The private placement of New Common Stock with
third party investors pursuant to Rule 144A of the Securities Act of 1933.
2.57 Priority Tax Claim: Any Claim entitled to priority in payment under
section 507(a) (7) of the Bankruptcy Code,
2.58 Rejected Agreements: All executory contracts and unexpired leases
of the Debtors listed or otherwise described on Schedule A to the Disclosure
Statement.
2.59 Reorganized Debtors: The Debtors, as reorganized pursuant to this
Plan.
2.60 Reorganized Parent Company: The Parent Company, as reorganized
pursuant to this Plan.
2.61 Representatives: Any officer, director, financial advisor, attorney
or other professional who participated in the formulation or confirmation of the
Plan for the Debtor or the Plan Participants.
2.62 Rights: Rights to purchase shares of New Common Stock that will be
offered to the holders of Existing Common Stock pursuant to the Rights Offering.
2.63 Rights Offering: The rights offering to be made pursuant to a
prospectus distributed to the holders of Existing Common Stock of the Parent
Company as of the Rights Offering Record Date, which will give holders of
Existing Common Stock as of the exclusive first right to purchase additional
shares of the New Common Stock, and, at the Parent Company's discretion, allow
third parties the opportunity to purchase any unsubscribed shares of New Common
Stock.
2.64 Rights Offering Record Date: The date, to be set by the board of
directors of the Parent Company in accordance with applicable law, for
determination of holders of Existing Common Stock eligible to participate in the
Rights Offering.
2.65 SEC: Securities and Exchange Commission.
2.66 Secured Claim: A Claim to the extent of the value, as determined by
the Bankruptcy Court pursuant to section 506(a) of the Bankruptcy Code, of any
interest in property of the Debtor's estate securing such Claim. To the extent
that the value of such interest is less than the amount of the Claim which has
the benefit of such security, such Claim is an Unsecured Deficiency Claim
unless, in any such case, the class of which such Claim is a part makes a valid
and timely election under section 1111(b) of the Bankruptcy Code to have such
Claim treated as a Secured Claim to the extent allowed.
2.67 Standby Lenders: PPM America, Pacholder, Oaktree and Appaloosa and
their assignees, holders of Existing Bonds who participate in the Standby Loan,
and others who may participate in the Standby Loan.
2.68 Standby Lender Fee Letter: Letter dated January 24, 2000 from the
Standby Lenders to the Debtors containing the Standby Lenders' fees for
arranging the Standby Loan and the terms of their commitment.
2.69 Standby Loan: A loan currently committed of up to $70 million from
PPM America, Pacholder. Oaktree and Appaloosa and others wishing to participate
in the Standby Loan, which may increase to a total commitment of $90 million.
2.70 Standby Loan Agreement: The note purchase agreement to be entered
into by the Debtors, PPM America, Pacholder, Oaktree, Appaloosa and holders of
Existing Bonds wishing to participate in the Standby Loan in connection with the
Standby Loan.
2.71 Standby Loan Notes: Notes issued by the Debtors to evidence loans
made pursuant to the Standby Loan Agreement.
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2.72 Standby Shares: The fully diluted New Common Stock of the Reorganized
Company to be issued to the Standby Lenders if the Debtors draw on the Standby
Loan.
2.73 Treasury Rate: The yield of U.S. Treasury securities, with a term
equal to the then remaining term of the Standby Loan Notes, which has become
publicly available on the third business day before the date fixed for
repayment.
2.74 Unsecured Deficiency Claim: A Claim by a Creditor arising out of the
same transaction as a Secured Claim to the extent that the value, as determined
by the Bankruptcy Court pursuant to section 506(a) of the Bankruptcy Code, of
such Creditor's interest in property of the Debtor's estate securing such Claim
is less than the amount of the Claim which has the benefit of such security as
provided by section 506(a) of the Bankruptcy Code, unless, in any such case, the
class of which such Claim is a part makes a valid and timely election under
section 1111(b) of the Bankruptcy Code to have such Claim treated as a secured
claim to the extent allowed.
2.75 Voting Record Date: The date the Bankruptcy Court enters the order
approving the Disclosure Statement.
The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Plan as a whole and not to any particular section,
subsection or clause contained in this Plan, unless the context requires
otherwise. Whenever from the context it appears appropriate, each term stated in
either the singular or the plural includes both the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender include each of the
masculine, feminine and the neuter genders. The section headings contained in
the Plan are for reference purposes only and shall not affect in any way the
meaning or interpretation of the Plan. In this Plan, "including" means
"including without limitation".
A term used in this Plan, not defined in this Plan and defined in the
Bankruptcy Code has the meaning assigned to it in the Bankruptcy Code. A term
used in this Plan, not defined in this Plan, not defined in the Bankruptcy Code
and defined in the Bankruptcy Rules has the meaning assigned to it in the
Bankruptcy Rules.
ARTICLE III
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
Claims and Equity Interests of Coho Energy, Inc. are classified as follows:
3.1 Class 1: Allowed Administrative Expense Claims
3.2 Class 2: Allowed Priority Tax Claims
3.3 Class 3: Allowed Bank Group Claim
3.4 Class 4: Allowed Miscellaneous Secured Claims
3.5 Class 5: Allowed Bond Claims
3.6 Class 6: Allowed General Unsecured Claims
3.7 Class 7: Allowed Administrative Convenience Claims
3.8 Class 8: Allowed interests of Equity Security Holders of Coho Energy, Inc.
ARTICLE IV
IDENTIFICATION OF CLAIMS AND EQUITY INTERESTS IMPAIRED BY THE PLAN
4.1 Unimpaired Classes: Classes 1, 4 and 7 Claims are not impaired under
the Plan and are not entitled to vote to accept or reject the Plan.
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4.2 Impaired Classes to Vote on Plan. The Claims and Equity Interests
specified in Classes 2, 3, 5, 6 and 8 of the Plan are impaired and are
entitled to vote to accept or reject the Plan.
4.3 Controversy Concerning Impairment: In the event of a controversy as to
whether any Claim or Equity Interest or class of Claims or Equity Interests is
impaired under the Plan, the Bankruptcy Court will, after notice and a hearing,
determine the controversy.
ARTICLE V
PROVISIONS FOR TREATMENT OF ALLOWED ADMINISTRATIVE EXPENSE CLAIMS (CLASS 1)
5.1 Full Payment: On the Effective Date, each Allowed Administrative
Expense Claim will be paid in full in Cash or from any retainers on hand, or
upon such other terms as may be agreed by and between the holder of such Claim
and the Debtor.
5.2 Impairment: Administrative Expense Claims are not impaired under the
Plan.
ARTICLE VI
PROVISIONS FOR TREATMENT OF ALLOWED PRIORITY TAX CLAIMS (CLASS 2)
6.1 Treatment: Except to the extent that a holder of an Allowed Priority
Tax Claim agrees to a different treatment, each holder of an Allowed Priority
Tax Claim will receive on account of such Claim a promissory note, dated as of
the Effective Date, in the principal amount of the Allowed Claim of each such
Creditor calculated as of the Effective Date. Each promissory note will provide
for payment of monthly installments of principal and interest as if such note
was being amortized over a period of sixty (60) months, with payments commencing
on the first day of the second month after the Effective Date. Each note will
become due and payable in full five (5) years after the date of assessment of
such claim. Each note will bear interest at the rate of 6% per annum unless a
different rate is chosen by the Bankruptcy Court pursuant to sections
1129(a)(9)(c) and l129(b)(2)(A)(i).
6.2 Impairment: Allowed Priority Tax Claims are impaired under the Plan.
6.3 Provision for Disputed Priority Tax Claims: The Debtors will litigate
Disputed Priority Tax Claims to determine the extent to which the Disputed
Priority Tax Claim should be allowed. During the pendency of such litigation,
the Debtor will place into the Disputed Claims Reserve such amounts as may be
fixed by agreement. provisional allowance in the Confirmation Order, or by
other order of the Bankruptcy Court, unless other depository arrangements or
terms are directed by order of the Bankruptcy Court.
ARTICLE VII
PROVISIONS FOR TREATMENT OF THE ALLOWED BANK GROUP CLAIM (CLASS 3)
7.1 Treatment: On the Effective Date, the Allowed Bank Group Claim will be
treated as a fully secured claim and will be paid in full in cash. At such time
as the Allowed amount of the Bank Groups Claim is fixed and paid in full, the
Claim will be extinguished and all liens discharged. The entry of the
Confirmation Order will be a final and binding adjudication on the allowance of
the Bank Group Claim (in an amount agreed to by the Debtors, the Creditors
Committee and the Bank Group or as allowed by Bankruptcy Court order after
objection) and will operate as a final and conclusive compromise and settlement
of any and all claims which have or may be asserted by or through the Debtors
against the Bank Group, its constituent members, their successors, assigns,
officers, directors, employees, attorneys, agents and representatives thereof.
The Parent Company will obtain the funds necessary for the payment of the
Allowed Bank Group Claim through the combination of (i) the Credit Facility,
(ii) the Rights Offering and the Private Placement, (iii) cash on hand from the
Debtors' operations, and (iv) the Standby Loan, if necessary.
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7.2 Impairment: The Allowed Bank Group Claim is impaired under the Plan,
Payment in cash of a claim such as the Allowed Bank Group Claim is no longer
listed in section 1124 of the Bankruptcy Code as a form of unimpairment.
ARTICLE VIII
PROVISIONS FOR TREATMENT OF MISCELLANEOUS SECURED CLAIMS (CLASS 4)
8.1 Treatment: Allowed Miscellaneous Secured Claims will receive cash
payment in an amount equal to one hundred percent (100%) of such Allowed
Miscellaneous Secured Claims on the later of the Effective Date or the date upon
which the Miscellaneous Secured Claims is Allowed, or within 10 days thereafter.
8.2 Impairment: The Allowed Miscellaneous Secured Claims are unimpaired
under the Plan.
ARTICLE IX
PROVISIONS FOR TREATMENT OF ALLOWED BOND CLAIMS (CLASS 5)
9.1 Treatment: On the Effective Date, the Existing Bond Indenture and
Existing Bonds will be extinguished. Holders of Allowed Bond Claims will receive
on the Effective Date their pro rata share of 96% of the New Common Stock,
without giving effect to the shares issuable under the Rights Offering or the
Private Placement and, the Standby Loan, as necessary.
9.2 Impairment: The Allowed Bond Claims are impaired under the Plan.
ARTICLE X
PROVISIONS FOR TREATMENT OF ALLOWED GENERAL UNSECURED CLAIMS (CLASS 6)
10.1 Treatment: In full satisfaction of all Allowed General Unsecured
Claims, each holder thereof will receive cash payment of 100% of its Allowed
Claim in four equal quarterly installments, without interest, the first of which
will be paid on the Effective Date and the remainder of which will be paid on
the first day of each subsequent calendar quarter. When a Disputed General
Unsecured Claim becomes an Allowed General Unsecured Claim, that date will be
treated as the Effective Date for such Claim and the remainder of such Claim
will be paid on the first day of each of the next three calendar quarters.
10.2 Impairment: Allowed General Unsecured Claims are impaired under the
Plan.
ARTICLE XI
Provisions FOR TREATMENT OF ALLOWED ADMINISTRATIVE CONVENIENCE CLAIMS (CLASS 7)
11.1 Treatment: Except to the extent that an Allowed Administrative
Convenience Claim has been paid by the Debtors before the Effective Date or a
holder of the Claim agrees to a different treatment, each holder of an Allowed
Administrative Convenience Claim will be paid in full in Cash on the later of
the Effective Date or the date such Allowed Administrative Convenience Claim
becomes an Allowed Administrative Convenience Claim, or within 10 days
thereafter.
11.2 Impairment: Allowed Administrative Convenience Claims are unimpaired
under the Plan.
ARTICLE XII
PROVISIONS FOR TREATMENT OF INTERESTS
OF EQUITY SECURITY HOLDERS OF COHO ENERGY, INC. (CLASS 8)
12.1 Treatment: The holders of Existing Common Stock will receive fair and
equitable treatment under the Plan. On the Effective Date the Existing Common
Stock will be extinguished and holders of the
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Existing Common Stock as of the Voting Record Date will receive their pro rata
share of 4% of the New Common Stock, without giving effect to the shares
issuable under either the Rights Offering or the Private Placement or any shares
of New Common Stock issued under the Standby Loan, as necessary. The holders of
Existing Common Stock as of the Rights Offering Record Date will also receive
exclusive first priority rights to purchase in the Rights Offering, to be made
pursuant to a separate prospectus, additional shares of the New Common Stock for
a purchase price of $0.26 per share, up to a total of $90 million. However, as
described in Section 13.4(b) below, if the registration statement filed with the
SEC in connection with the Rights Offering is not declared effective by a date
sufficiently early to give the Parent Company adequate time to arrange and
complete the Rights Offering, the Parent Company may, in its sole discretion,
discontinue the Rights Offering and proceed with the Private Placement.
12.2 Impairment: The holders of Existing Common Stock are impaired under
the Plan.
ARTICLE XIII
MEANS FOR EXECUTION OF THE PLAN
13.1 Substantive Consolidation: For purposes of this Plan, all the Debtors
will be treated as substantively consolidated with the Parent Company.
13.2 Reorganized Debtors: From and after the Effective Date, each of the
Reorganized Debtors will continue in existence as a separate corporate entity,
in accordance with the law applicable in the jurisdiction under which it was
incorporated and pursuant to its charter and bylaws in effect on the Effective
Date. Each of the Reorganized Debtors will not be liquidated, and will continue
to engage in the businesses permitted by its charter and bylaws. The stock in
each Reorganized Debtor other than the Reorganized Parent Company will not be
affected by this Plan.
13.3 Payment of Allowed Bank Group Claim: The Reorganized Parent Company
will obtain the funds necessary for the payment of the Allowed Bank Group Claim
through the combination of (i) the Credit Facility, (ii) the Rights Offering or
the Private Placement, (iii) cash on hand from the Debtors' operations, and (iv)
the Standby Loan, if necessary.
(a) The Credit Facility. On the Effective Date, the Reorganized
Parent Company will establish the Credit Facility with Chase, as agent for
the Lenders, for a principal amount of up to $250 million. The Credit
Facility will limit advances to the amount of the borrowing base, which is
anticipated to be set initially at $210 million, $10 million of which must
remain undrawn and available on the Effective Date. The borrowing base
will be the loan value to be assigned to the proved reserves attributable
to the Reorganized Parent Company's oil and gas properties. The initial
borrowing base will be subject to Chase's review of the January 1, 2000
reserve report to be prepared by the Parent Company and audited by an
independent petroleum engineering firm acceptable to the Lenders. The
initial borrowing base will be determined before the Confirmation Hearing.
The Credit Facility will be subject to semiannual borrowing base
redeterminations, each May 1 and November 1, and such redeterminations
will be made in the sole discretion of the Lenders. The Reorganized Parent
Company will deliver to the Lenders by April 1 and October 1 of each year
a reserve report prepared as of the immediately preceding January 1 and
July 1, respectively. The January 1 reserve report will be prepared by the
Reorganized Parent Company and audited by an independent petroleum
engineering firm, acceptable to Chase and the July 1 reserve report will
be prepared internally by the Reorganized Parent Company, in a form
acceptable to Chase. Based in part on the reserve report, the Lenders will
redetermine the borrowing base in their sole discretion. For an increase
in the borrowing base, consent of 100% of the Lenders will be required. To
maintain the borrowing base, or to reduce the borrowing base, consent of
75% of the Lenders of outstanding loans or, in the event that no loans are
outstanding'. the Lenders holding 75% of the current commitments under the
Credit Facility, will be required. The Reorganized Parent Company or Chase
may request one additional borrowing base determination during any
calendar year.
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(b) Credit Facility Interest Payments and Term. Interest on advances
under the Credit Facility will be payable on the earlier of (i) the
expiration of any interest period under the Credit Facility or (ii)
quarterly, beginning with the first quarter after the Effective Date.
Amounts outstanding under the Credit Facility will accrue interest at the
option of the Reorganized Parent Company at (i) the Eurodollar Rate, plus
an applicable margin, or (ii) the Base Rate, plus an applicable margin.
All outstanding advances under the Credit Facility are due and payable in
full three years from the Effective Date.
(c) Security. The Credit Facility will be secured by granting first
and prior security interests and mortgage liens in the Collateral to Chase
for the benefit of the Lenders. The rights and responsibilities of Chase,
the Lenders and the Debtors will be governed by the Credit Agreement and
related documents, which will permit the Lenders to enforce their rights
to the Collateral upon the occurrence of an "event of default" (as defined
in the Credit Agreement).
(d) Fees Paid in Connection with the Credit Facility. Certain fees
for the Lenders contained in the Chase Commitment Letter were approved by
the Bankruptcy Court at a hearing on the fees held on January 27, 2000.
These fees include an initial due diligence fee of $200,000. If the
Lenders fund under the Credit Facility on the Effective Date, they will be
entitled to an additional aggregate $6.5 million of closing fees. All fees
paid by the Parent Company in connection with the Credit Facility are
non-refundable and are in addition to reimbursements to be paid for
expenses incurred by Chase in connection with the preparation of the
Credit Agreement.
The Chase Commitment Letter provides that there are a number of
conditions that must be met before the Lenders will be committed to fund
the Credit Facility on the Effective Date, including: (a) agreement
concerning definitive documents, (b) completion of economic due diligence
and (c) approval by Chase of the Reorganized Parent Company's management
team and capital structure. Chase and the Debtors will come to agreement
on definitive documents in keeping with the terms of the Plan by March 1.
2000. When Chase indicates to the Debtors by the later of March 14, 2000
or the last business day immediately preceding the Confirmation Hearing,
that all conditions have been met, the Lenders will be committed to fund
on the Effective Date. If the Lenders fund on the Effective Date, they
will be entitled to $6.5 million in closing fees.
(e) Payment of Allowed Bank Group Claim. The Allowed Bank Group
Claim consists of approximately $240 million of principal (plus accrued
interest and reasonable fees and expenses). The Reorganized Parent Company
will use approximately $200 million in advances under the Credit Facility
toward the payment of the Allowed Bank Group Claim. The remaining amount
of the Allowed Bank Group Claim will be paid with the proceeds of the
Rights Offering, the Private Placement, and if necessary, the Standby
Loan. The Allowed amount of the Bank Group Claim will be fixed and
determined before the conclusion of the Confirmation Hearing, either by
agreement between the Bank Group, the Debtors and the Creditors Committee,
or as allowed by Bankruptcy Court order after objection.
13.4 New Investment: To implement this Plan, the Reorganized Debtors wil1
raise up to $90 million of new investment in the Reorganized Parent Company by
the Rights Offering or the Private Placement, and, if applicable, the Standby
Loan. A portion of the proceeds from the Rights Offering, the Private Placement
and the Standby Loan, if applicable, will be used to pay the balance of the Bank
Group Claim.
(a) The Rights offering or Private Placement. Under the Rights
Offering, holders of Existing Common Stock as of the Rights Offering
Record Date will have the right to buy additional shares of the New Common
Stock based on the number of shares of Existing Common Stock owned as of
the Rights Offering Record Date, for a price of $0.26 per share, up to an
aggregate of $90 million. Holders of Existing Common Stock as of the
Rights Offering Record Date who wish to purchase more than their allocable
portion of the shares offered to them in the Rights Offering may do so, to
the extent that other shareholders do not elect to participate in the
Rights Offering. If the Rights Offering is not fully subscribed up to $90
million by the holders of Existing Common Stock as of the Rights Offering
Record
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Date, then the Parent Company may offer the remaining shares of New Common
Stock to third parties pursuant to the Rights Offering.
(b) Registration and Termination of Rights Offering; Private
Placement. In connection with the Rights Offering, the Parent Company
filed a registration statement with the SEC to register the Rights and to
register the shares of New Common Stock under the Rights Offering. If the
registration statement filed with the SEC is not declared effective by a
date sufficiently early to give the Parent Company adequate time to
arrange and complete the Rights Offering, the Parent Company may, in its
sole discretion, discontinue the Rights Offering and proceed with the
Private Placement. The Parent Company paid a filing fee of $23,760 to the
SEC in conjunction with the filing of the registration statement and other
associated expenses in conjunction with the printing and mailing of the
related prospectus. If the Rights Offering is not fully subscribed up to
$90 million by holders of Existing Common Stock as of the Rights Offering
Record Date, then the Parent Company may offer any of the remaining shares
to third-party investors. The Rights Offering or the Private Placement
would be arranged by Jefferies & Company, Inc., or another investment
banker, subject to the approval of the Bankruptcy Court. Jefferies &
Company, Inc., or another investment banker, will be retained for the
limited purpose of arranging the Rights Offering or the Private Placement
and not as a general financial advisor to the Debtors.
This Plan refers to and briefly describes, as an integral part of
the Plan, a "Rights Offering" and a "Private Placement". This Plan does
not and the Disclosure Statement will not constitute a solicitation of
acceptance of rights to be distributed pursuant to the Rights Offering, an
offer to sell (or a solicitation of an offer to buy) the rights or the
shares of New Common Stock to be offered pursuant to the Rights Offering,
or, if applicable, an offer to sell (or the solicitation of an offer to
buy) the shares of New Common Stock to be offered pursuant to the Private
Placement. The issuance of the rights pursuant to the Rights Offering and
the offer of shares of New Common Stock pursuant to the Rights Offering
may only be made by means of a prospectus included within a registration
statement that has been filed with, and that has been declared effective
by, the SEC and after compliance with any applicable state or other
securities laws, The Parent Company has filed a registration statement
with the SEC. Any offer of shares of New Common Stock pursuant to the
Private Placement may only be made by means of, and on the conditions
contained in, an offering memorandum provided by the Parent Company.
Information about the Rights Offering and the Private Placement is
included in the Disclosure Statement and in this Plan solely for the
purpose of satisfying requirements of the Bankruptcy Code to provide
information adequate to enable the holders of claims and interests to make
an informed decision about the Plan.
(c) The Standby Loan. The Standby Loan is to be made pursuant to a
senior subordinated note facility under which the Reorganized Debtors will
issue, and the Standby Lenders will purchase, an amount of senior
subordinated notes to be determined by the Reorganized Debtors. This
amount will be a maximum of $70 million given the current level of
commitment under the Standby Loan and a maximum of $90 million if more
Standby Loan commitments are obtained and made available before the
conclusion of the Confirmation Hearing, or the Effective Date, if the
Debtors choose to extend the Rights Offering to that date. The rights and
responsibilities of the Standby Lenders and the Debtors will be governed
by the Standby Loan Agreement.
(d) Terms of the Standby Loan. Debt under the Standby Loan Agreement
will be evidenced by the Standby Loan Notes, maturing seven years after
the Effective Date and bearing interest at a minimum annual rate of 15%
and payable in cash semiannually. After the first anniversary of the
Effective Date, additional semiannual interest will be payable in an
amount equal to 1/2% for every $0.25 that the Actual Price exceeds $15 per
barrel of oil equivalent during the applicable semiannual interest period,
up to a maximum of 10% additional interest per year. Additionally, upon an
event of default occurring under the Standby Loan, interest will be
payable in cash, unless otherwise required to be paid-in-kind, at a rate
equal to 2% per year over the applicable interest rate. The Actual Price
will be calculated over a six-month measurement period ending on the date
two months before the applicable
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interest payment date. Interest on the Standby Loan may be paid-in-kind
subject to the requirements of the Credit Agreement.
(e)Payment of Indebtedness under the Standby Loan. Payment of the
Standby Loan Notes will be subordinate to payments in full in cash of all
obligations arising in connection with the Credit Facility. Subject to a
final agreement between the Standby Lenders and Chase, after the initial
12-month period, cash interest payments may be made only to the extent by
which earnings before income tax, depreciation and amortization expense
("EBITDAX") on a trailing four-quarter basis exceed $65 million. The
Credit Agreement may also prohibit the Reorganized Parent Company from
making any cash interest payments on the Standby Loan indebtedness if the
outstanding indebtedness under both the Credit Facility and the Standby
Loan, exceeds 3.75 times the EBITDAX for the trailing four quarters. The
Reorganized Parent Company may prepay the Standby Loan Notes at the face
amount, in whole or in part, in minimum denominations of $1,000,000, plus
either (i) a standard make-whole payment with a discount rate of 300 basis
points over the Treasury Rate for the first four years, or (ii) beginning
in the fifth year, a premium equal to one-half the 15% base interest rate,
declining annually and ratably to par. The Standby Loan Notes may only be
paid if either (i) all obligations under the Credit Facility have been
paid in full in cash or (ii) if the Lenders of 75% of the outstanding
loans or, if none are outstanding, the Lenders holding 75% of the current
loan commitments under the Credit Facility consent to the payment.
(f) Standby Shares. If the Standby Loan Notes are issued, the
Standby Lenders will receive the Standby Shares. If $70 million in Standby
Loan Notes are issued, the Standby Lenders will receive 14% of the fully
diluted New Common Stock. The amount of Standby Shares issued will be
adjusted ratably according to the actual principal amount of Standby Loan
Notes issued. The Standby Shares issued to the Standby Lenders will be in
addition to the shares of New Common Stock issued to holders of the
Existing Bonds, holders of Existing Common Stock and persons participating
in the Rights Offering or Private Placement. See the Disclosure Statement
for an illustration of the dilution of the New Common Stock.
(g) Fees Paid in Connection with the Standby Loan. Certain fees for
the Standby Lenders contained in the Standby Lender Fee Letter were
approved by the Bankruptcy Court in a hearing on the fees held on January
27, 2000. This includes (I) a due diligence fee of $200,000 payable
immediately and (2) break up a fee of $1.0 million (the "Break Up Fee"),
to be paid if the Standby Lenders give the Debtors written notice that all
conditions to closing have been met and if a plan of reorganization is
subsequently confirmed and consummated that does not use the Standby Loan.
If, after receiving a letter from the Standby Lenders that all conditions
have been met, the Debtors subsequently obtain confirmation of a plan of
reorganization without an alternative financing proposal, the Debtors will
owe the Standby Lenders a closing fee in an amount equal to the greater of
$1.0 million or 3 1/2% of the aggregate principal amount of the Standby
Loan Notes purchased (the "Closing Fee"). The obligation of the
Reorganized Debtors to pay the Break Up Fee or Closing Fee, will be an
administrative expense claim having priority over all administrative
expenses in accordance with section 364(c)(l) of the Bankruptcy Code. The
Debtors will pay either the Closing Fee or the Break Up Fee, but not both.
The Standby Lender Fee Letter provides that there are only two essential
kinds of conditions which must be met before the Standby Lenders will be
committed to fund the Standby Loan on the Effective Date: (1) agreement to
definitive documents and (2) completion of economic due diligence. The Standby
Lenders and the Debtors will come to agreement on definitive documents in
keeping with the terms of the Plan and satisfactory to both of them. When the
Standby Lenders indicate by letter to the Debtors on the later of March 14,
2000, or the last business day immediately prior to the Confirmation Hearing,
that they have completed their due diligence and that all conditions to closing
have been met except entry of an order confirming the Plan, then (1) the Standby
Lenders will be committed to fund on the Effective Date and (2) the Standby
Lenders will be entitled to a minimum fee of $1.0 million, either as a Closing
Fee or a Break Up Fee. If the Standby Lenders do not notify the Debtors in
writing by the later of March 14, 2000, or the last business day immediately
preceding the Confirmation Hearing, that all conditions have been met, then they
will be entitled to their reasonable fees and expenses in
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connection with the Standby Loan, but they will not be entitled to the
Break Up Fee. If the Standby Lenders fund the Standby Loan on the
Effective Date, they will be entitled to the Closing Fee, and will not be
entitled to the Break Up Fee.
~ (h) Other Sources of Financing. Contemporaneous with the filing of
this Plan, the Debtors have supported Bankruptcy Court approval of
procedures whereby other parties interested in providing the Standby Loan
on more favorable terms to the Reorganized Debtors may offer binding
commitments by the end of the Disclosure Statement hearing.
13.5 Revesting of Assets: Except as otherwise provided in this Plan, the
property and assets of the Debtors' bankruptcy estate under section 541 of the
Bankruptcy Code, including all Claims listed in Articles XVI and XVII hereof
will revest in the Reorganized Debtors on the Effective Date free and clear of
all Claims and Equity Interests, but subject to the obligations of the
Reorganized Debtors as set forth in this Plan. Commencing on the Effective Date,
the Reorganized Debtors may deal with their assets and property and conduct
their businesses, without any supervision by, or permission from, the Bankruptcy
Court or the office of the United States Trustee and free of any restriction
imposed on the Debtors by the Bankruptcy Code or by the Bankruptcy Court during
the Chapter 11 Case.
13.6 New Common Stock: The provisions of the New Common Stock to be issued
pursuant to the Plan are summarized as follows:
(a) Authorization. The Reorganized Parent Company will be authorized
to issue the number of shares of New Common Stock set forth in the
Disclosure Statement.
(b) Par Value. The New Common Stock has a par value of $0.01 per
share.
(c) Rights. The New Common Stock has such rights with respect to
dividends, liquidation, voting and other matters as set forth in the
amended and restated articles of incorporation of the Reorganized Parent
Company and as provided under applicable law.
(d) Dilution. The New Common Stock issued to holders of Existing
Common Stock as of the Voting Record Date and holders of Existing Bonds is
subject to dilution by the Rights Offering, the Private Placement and the
Standby Shares, if necessary. The New Common Stock issued to persons
participating in the Rights Offering or the Private Placement will not be
subject to dilution by the Standby Shares. See the Disclosure Statement
for an illustration of the dilution of the New Common Stock.
13.7 Directors and Officers: Debtor's current directors and officers are
listed in the Disclosure Statement. In accordance with section 1125(a) of the
Bankruptcy Code, these will be the officers and directors on the Effective Date
and immediately thereafter, however, in keeping with the provisions of this
paragraph, as soon as practicable after the Effective Date the new board of
directors of the Reorganized Debtors will convene a meeting. Four members of the
post-Effective Date board of directors will be selected by the Principal
Bondholders. One member of the board of directors will be selected by the
post-Effective Date board of directors from the Debtors' post-Effective Date
management. Two members of the board of directors will be selected by the
entities whose new investment funding is used on the Effective Date (whether
under the Standby Loan or some alternative source of funding) based upon their
relative contributions of capital. Accordingly, certain parties have rights
under the Plan to designate new directors. Those parties have not yet made those
designations. Any such designations will be made before the commencement of the
Confirmation Hearing and will be disclosed at the Confirmation Hearing. Any
changes in officers made before the completion of the Confirmation Hearing will
be disclosed during the Confirmation Hearing. Any further changes in officers
will be made after the Effective Date by the board of directors of the
Reorganized Parent Company. Upon approval of the Plan, a retention bonus plan,
under which certain key employees are provided with additional incentives to
continue their employment with the Parent Company as it pursues a
reorganization, will be implemented as described in the Disclosure Statement.
13.8 Amended and Restated Articles of Incorporation: The amended and
restated articles of incorporation of the Reorganized Parent Company and the
charters of the other Reorganized Debtors, as amended
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pursuant to this Plan, will go into effect on the Effective Date and will
satisfy the provisions of this Plan and section 1123(a) (6) of the Bankruptcy
Code.
13.9 Implementing Documents. To implement this Plan, several documents
will be signed and delivered or otherwise made effective, including the
following documents:
o Promissory Note to be issued to holders of Allowed Priority Tax
Claims
o Credit Agreement
o Standby Loan Agreement
o Amended Employment Agreements
o Amended and restated articles of incorporation of Coho Energy, Inc.
o Amended and restated bylaws of Coho Energy, Inc.
o Registration rights agreement
o Shareholders' agreement
Forms of these documents will be filed with the Bankruptcy Court by March 1,
2000. Thereafter, the Debtors will provide a copy of the form of any of these
documents to any party in interest who requests it in writing. Written requests
should be sent to the Parent Company at 14785 Preston Road, Suite 860, Dallas,
Texas 75240, Attention: Ms. Anne Marie O'Gorman.
ARTICLE XIV
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
14.1 Assumption of Executory Contracts and Unexpired Leases: As of the
Effective Date, all executory contracts and unexpired leases of the Debtors (as
set forth in the Debtors' Schedules filed by the Debtors and as specifically
referenced in the Disclosure Statement) other than the Rejected Agreements are
assumed by the Debtors in accordance with section 365 of the Bankruptcy Code.
The Debtors and the Creditors Committee will agree by March 1, 2000 on an
amended schedule of executory contracts and unexpired leases which will be
assumed pursuant to this Plan. The Debtors believe they are current with their
obligations under all executory contracts and unexpired leases and, therefore,
the assumption of same will not result in the payment of any cure amounts which
might otherwise be due and payable. Any rights of non-Debtor parties to
executory contracts and unexpired leases to pursue claims for payment of cure
amounts are preserved. In the event of a dispute regarding the amount or timing
of any cure payments, the ability of the Reorganized Debtors to provide adequate
assurance of future performance or any other matter pertaining to assumption,
the dispute will be resolved by the Bankruptcy Court in connection with the
Confirmation Hearing and the Reorganized Debtors will make such cure payments,
if any, or provide such assurance as may be required by the order resolving such
dispute on the terms and conditions of such order. Employment agreements for
certain key employees will be amended and the Amended Employment Agreements will
be filed with the Bankruptcy Court by March 1, 2000. The Amended Employment
Agreements will provide, among other things, that confirmation and consummation
of this Plan and related events do not constitute a change of control under
these contracts. These Amended Employment Agreements will be assumed under the
Plan. If an employee is requested to execute and deliver an Amended Employment
Agreement by the Creditors Committee, and refused to do so, that employee's
existing employment agreement will he added to the list of contracts to be
rejected and rejected pursuant to the Plan on the Effective Date.
14.2 Indemnification Obligations and Insurance Policies: The obligations
of the Debtors pursuant to their certificates of incorporation, bylaws or
applicable state law to indemnify the directors and officers who served as
directors and officers of the Debtors before and after the Petition Date against
any obligations based on conduct or transactions that occurred while they were
officers and directors before or after the Petition Date will continue after the
Confirmation Date. On the Effective Date the Reorganized Parent Company will
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purchase (i) a new directors and officers insurance policy covering the new
post-Effective Date directors and officers and (ii) a three-year tail insurance
policy on existing director and officer policies, if it can be purchased for no
more than $300,000, or take such other action concerning the purchase of tail
insurance as the board of directors of the Reorganized Parent Company believes
is reasonable.
14.3 Rejection of Certain Executory Contracts and Unexpired Leases: The
Plan Confirmation Order will operate as an order of rejection under section 365
of the Bankruptcy Code with respect to each of the Rejected Agreements.
14.4 Treatment of the Existing Bond Indenture: As of the Effective Date,
except to the extent provided otherwise in the Plan, all notes held by holders
of Bond Claims, and all agreements, instruments and other documents evidencing
the Existing Bonds and the rights of the holders of Bond Claims, will be
automatically canceled, extinguished and are void (all without further action by
any person); all obligations of any person under these instruments and
agreements will be fully and finally satisfied and released; and the obligations
of the Debtors under these instruments and agreements will be discharged. On the
Effective Date, except to the extent provided otherwise in the Plan, any
indenture relating to any of the foregoing, including, without limitation, the
Existing Indenture, will be canceled, and the obligations of the Debtors
thereunder, except for the obligation to indemnify the Indenture Trustee will be
discharged; however, the Existing Indenture and other agreements that govern the
rights of a holder of a claim that is administered by the Indenture Trustee, an
agent or servicer will continue in effect solely for the purposes of (i)
allowing the Indenture Trustee, agent or servicer to take any action necessary
to effect the Plan, including making distributions on account of the holders of
Bond Claims under the Plan and (ii) permitting the Indenture Trustee, agent or
servicer to maintain any rights or liens it may have for reasonable fees, costs
and expenses under the Exiting Indenture. Upon payment in full of the reasonable
fees and expenses of the Indenture Trustee, the rights of the Indenture Trustee
will terminate.
14.5 Claims Based on Rejection of Executory Contracts and Unexpired
Leases: All proofs of claim with respect to Claims arising from the rejection of
an executory contract or unexpired lease will be filed with the Bankruptcy Court
within 30 days after the earlier of (a) the date of entry of an order of the
Bankruptcy Court approving the rejection, or (b) the Effective Date. Any Claims
not filed within such times will be forever barred from assertion against the
Debtors, their estate or their property.
ARTICLE XV
EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS
15.1 Impaired Classes to Vote: Each impaired class of Claims and Equity
Interests will be entitled to vote separately to accept or reject the Plan. A
holder of a Disputed Claim that has not been temporarily allowed for purposes of
voting on the Plan may vote the Disputed Claim in an amount equal to the
portion, if any, of the Claim shown as fixed, liquidated and undisputed in the
Debtors' Schedules.
15.2 Acceptance by Class of Creditors: A class will have accepted the Plan
if the Plan is accepted by at least two-thirds in amount and more than one-half
in number of the Allowed Claims or Equity Interests of the class actually voting
that have accepted or rejected the Plan.
15.3 Cramdown: If any impaired class will fail to accept this Plan in
accordance with section 1129(a) of the Bankruptcy Code, the Debtors reserve the
right to request the Bankruptcy Court to confirm the Plan in accordance with the
provisions of section 1129(b) of the Bankruptcy Code.
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ARTICLE XVI
PROVISIONS FOR RESOLUTION AND TREATMENT OF PREFERENCES,
FRAUDULENT CONVEYANCES, AND DISPUTED CLAIMS
16.1 Preferences and Fraudulent Conveyances: The Reorganized Debtors will
be the only parties authorized to object to Claims and to pursue actions to
recover preferences and fraudulent conveyances or any other transaction voidable
under Chapter 5 of the Bankruptcy Code. Unless the Reorganized Debtors consent,
or unless otherwise ordered by the Bankruptcy Court, no other party will have
the right or obligation to pursue such actions.
16.2 Objections to Claims: The Debtors will have the sole authority to
object and contest the allowance of any Claims filed with the Bankruptcy Court
within 90 days after the Effective Date. Claims listed as disputed, contingent
or unliquidated on the Debtors' Schedules are considered contested Claims,
except Claims otherwise treated by the Plan or previously allowed or disallowed
by Final Order of the Bankruptcy Court.
16.3 Disputed Claims Reserve: Debtors will hold in trust the Distributions
for Disputed Claims (pending a determination of the Disputed Claims) for the
benefit of holders of Disputed Claims. At such time as a Disputed Claim becomes
an Allowed Claim, that will be deemed the Effective Date for purposes of such
Claim and the Distributions allowed for such Allowed Claims will be released
from the Disputed Claims Reserve and delivered to the holder of such Allowed
Claim. If a Disputed Claim is disallowed, the Distributions provided for the
Claim will be released to the Reorganized Debtors for use in their business
operations.
16.4 Unclaimed Distributions: On the second, third and fourth
anniversaries of the Effective Date, the Reorganized Debtors will publish the
names of holders of unclaimed Claims and Equity Interests. In the event any
Distributions under the Plan remain unclaimed as of five (5) years after the
Effective Date such Distributions will be released for the Reorganized Debtors
use in their ordinary business operations.
ARTICLE XVII
PROVISIONS FOR RETENTION, ENFORCEMENT, SETTLEMENT, OR
ADJUSTMENT OF CLAIMS BELONGING TO THE ESTATE
17.1 Causes of Action: All claims recoverable under Chapter 5 of the
Bankruptcy Code, including, but not limited to, all claims assertable under
sections 544, 546, 547, 548 and 550 of the Bankruptcy Code, and all claims owned
by the Debtors pursuant to section 541 of the Bankruptcy Code or similar state
law, including all claims against third parties on account of any indebtedness,
and all other claims owed to or in favor of the Debtors to the extent not
specifically compromised and released pursuant to this Plan or an agreement
referred to or incorporated herein, will be preserved and retained for
enforcement by the Reorganized Debtors after the Effective Date.
17.2 Legally Binding Effect; Discharge of Claims and Equity Interests: The
provisions of this Plan will (a) bind all Creditors and Equity Interest holders,
whether or not they accept this Plan, and (b) discharge the Debtors from all
debts that arose before the Petition Date. In addition, the distributions of
Cash and securities provided for under this Plan will be in exchange for and in
complete satisfaction, discharge and release of all Claims against and Equity
Interests in the Debtors or any of their assets or properties, including any
Claim or Equity Interest accruing after the Petition Date and before the
Effective Date. On and after the Effective Date, all holders of impaired Claims
and Equity Interests will be precluded from asserting any Claim against the
Reorganized Debtors or their assets or properties based on any transaction or
other activity of any kind that occurred before the Petition Date. The
Distributions provided for Creditors and Equity Interest holders will not be
subject to any Claim by another Creditor or Equity Interest holder by reason of
an assertion of a contractual right of subordination.
17
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ARTICLE XVIII
CONDITIONS PRECEDENT TO CONFIRMATION AND
CONSUMMATION OF THE PLAN
18.1 Conditions to Confirmation: The Bankruptcy Court will not enter the
Confirmation Order unless and until each of the following conditions has been
satisfied or duly waived (if waivable) pursuant to Section 18.3 below.
(a) The documents implementing the Plan listed in Section 13.9 above
and the terms and conditions embodied therein will be acceptable in form
and substance to the Debtors, the Creditors Committee, Chase, the Standby
Lenders and Bank Group; provided that no Creditor or committee will have
standing to object to the form of a document that has no material impact
on them.
(b) Entry of a Confirmation Order, acceptable in form and substance
to the Debtors and the Creditors Committee, which will, among other
things, make findings that particular sections of 1129 have been met,
including, without limitation, (i) that the Debtors, the Plan Participants
and each of their Representatives have proposed and obtained confirmation
of the Plan in good faith; (ii) that the Plan is in the best interest of
Creditors and (iii) that the Plan is fair and equitable to holders of
Claims and Equity Interests.
18.2 Conditions to Effective Date: The Plan will not be consummated and
the Effective Date will not occur unless and until each of the following
conditions has been satisfied or duly waived (if waivable) pursuant to Section
18.3 below:
(a) The Confirmation Order shall have been entered by the Bankruptcy
Court in a form satisfactory to the Debtors, the Creditors Committee,
Chase, the Standby Lenders and the Bank Group.
(b) The Confirmation Order will authorize and direct the Debtors,
the Reorganized Debtors and their subsidiaries to take all actions
necessary or appropriate to enter into, implement and consummate the
contracts, instruments, releases, leases, indentures and other agreements
or documents created in connection with the Plan, including those actions
contemplated by the provisions of the Plan set forth in Section 18.1
above.
(c) The Credit Facility, the Rights Offering, the Private Placement
and, if applicable, the Standby Loan, shall all close prior to or on the
Effective Date so that funds are available to pay the Allowed Bank Group
Claim in full on or prior to the Effective Date.
(d) The Effective Date will have occurred on or before March 31,
2000.
18.3 Waiver of Conditions: The conditions to Confirmation and the
Effective Date may be waived in whole or in part by the Debtors, with the
consent of the Creditors Committee, at any time, without notice.
18.4 Effect of Non-occurrence of Conditions to Effective Date: Each of the
conditions to consummation and the Effective Date must be satisfied or duly
waived, as provided above, within 90 days after the Confirmation Date. If each
condition to the Effective Date has not been satisfied or duly waived, pursuant
to Section 18.3 above, within 90 days after the Confirmation Date, then upon
motion by any party in interest made before the time that each condition has
been satisfied or duly waived and upon notice to such parties in interest as the
Bankruptcy Court may direct, the Confirmation Order will be vacated by the
Bankruptcy Court; provided, however, that, notwithstanding the filing of such
motion, the Confirmation Order may not be vacated if each of the conditions to
the Effective Date is either satisfied or duly waived before the Bankruptcy
Court enters an order granting the motion. If the Confirmation Order is vacated
pursuant to this Section 18.4, the Plan will be deemed null and void, including
the discharge of Claims and termination of Equity Interests pursuant to section
1141 of the Bankruptcy Code; and the assumptions, assumptions and assignments or
rejections of executory contracts and unexpired leases pursuant to Section 14.1
above, and nothing contained in the Plan will (1) constitute a waiver or release
of any Claims by or against, or any Equity Interests in the Debtors or (2)
prejudice in any manner the rights of the Debtors.
18
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ARTICLE XIX
RETENTION OF JURISDICTION
19.1 Jurisdiction: Until this Chapter 11 Case is closed, the Bankruptcy
Court will retain such ~ jurisdiction as is legally permissible, including that
necessary to ensure that the purpose and intent of this Plan are carried out and
to hear and determine all Claims set forth in Articles V through XI above that
could have been brought before the entry of the Confirmation Order. The
Bankruptcy Court will retain jurisdiction to hear and determine all Claims
against the Debtors and to enforce all causes of action that may exist on behalf
of the Debtors. Nothing contained in this Plan will prevent the Reorganized
Debtors from taking such action as may be necessary in the enforcement of any
cause of action that may exist on behalf of the Debtors and that may not have
been enforced or prosecuted by the Debtors.
19.2 Examination of Claims: Following the Confirmation Date, the
Bankruptcy Court will further retain jurisdiction to decide disputes concerning
the classification and allowance of the Claim of any Creditor and the
re-examination of Claims that have been allowed for the purposes of voting, and
the determination of such objections as may be filed to Creditors' Claims. The
failure by the Debtors to object to, or to examine, any Claims for the purposes
of voting will not be deemed a waiver of their right to object to, or to
re-examine, the Claim in whole or in part.
19.3 Determination of Disputes: The Bankruptcy Court will retain
jurisdiction after the Confirmation Date to determine all questions and disputes
regarding title to the assets of the Debtors' estate, disputes concerning the
allowance of Claims, and determination of all causes of action, controversies,
disputes, or conflicts, whether or not subject to any pending action, as of the
Confirmation Date, for the Debtors to recover assets pursuant to the provisions
of the Bankruptcy Code.
19.4 Additional Purposes: The Bankruptcy Court will retain jurisdiction
for the following additional purposes after the Effective Date:
(a) to modify this Plan after confirmation pursuant to the
Bankruptcy Rules and the Bankruptcy Code;
(b) to assure the performance by the Reorganized Debtors of their
obligations to make Distributions under this Plan and with respect to the
New Common Stock to be issued;
(c) to enforce and interpret the terms and conditions of this Plan;
(d) to adjudicate matters arising in these bankruptcy cases,
including matters relating to the formulation and consummation of this
Plan;
(e) to enter such orders, including injunctions, as are necessary to
enforce the title, rights, and powers of the Reorganized Debtor and to
impose such limitations, restrictions, terms and conditions on such title,
rights, and powers as this Bankruptcy Court may deem necessary;
(f) to enter an order terminating this Chapter 11 Case;
(g) to correct any defect, cure any omission, or reconcile any
inconsistency in this Plan or the order of confirmation as may be
necessary to carry out the purposes and intent of this Plan;
(h) to allow applications for fees and expenses pursuant to section
503(b) of the Bankruptcy Codes: and
(i) to decide issues concerning federal tax reporting and
withholding which arise in connection with the confirmation or
consummation of this Plan.
19
<PAGE>
ARTICLE XX
DEFAULT UNDER PLAN
20.1 Asserting Default: If the Debtors default under the provisions of
this Plan (as opposed to default under the documentation executed in
implementing the terms of the Plan, which documents will provide independent
bases for relief), any Creditor or party in interest desiring to assert a
default will provide the Debtors with written notice of the alleged default.
20.2 Curing Default: The Debtors will have 20 days from receipt of the
written notice in which to cure an alleged default under this Plan, including
any default under any Related Document. The notice should be delivered by United
States certified mail, postage prepaid, return receipt requested addressed to
the president of the Debtors at the following address:
Coho Energy, Inc.
Attention: President
14785 Preston Road, Suite 860
Dallas, Texas 75240
and to counsel for the Debtors at the following address:
Fulbright & Jaworski LLP
Attention: Michael W. Anglin
2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
and to counsel for the Creditors Committee at the following address:
Munger, Tolles & Olson
Attention: Thomas B. Walper
355 S. Grand Avenue
35th Floor
Los Angeles, California 90071
If the default is not cured, any Creditor or party in interest may thereafter
file with the Bankruptcy Court and serve upon counsel for the Debtor a motion to
compel compliance with the applicable provision of the Plan. The Bankruptcy
Court, upon finding a material default, will issue such orders compelling
compliance with the pertinent provisions of the Plan.
ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 Termination of Committees: On the Effective Date, all committees in
the Debtor's Chapter 11 Case will be terminated except to the extent necessary
to participate in any appeals.
21.2 Compliance with Tax Requirements: In connection with this Plan, the
Debtors will comply with all withholding and reporting requirements imposed by
federal, state, and local taxing authorities, and Distributions will be subject
to such withholding and reporting requirements.
21.3 Amendment of the Plan: This Plan may be amended by the Debtors before
or after the Effective Date as provided in section 1127 of the Bankruptcy Code.
21.4 Revocation of Plan: The Debtors reserve the right to revoke and
withdraw this Plan at any time before the Confirmation Date.
21.5 Effect of Withdrawal or Revocation: If both the Debtors and the
Creditors Committee revoke or withdraw this Plan before the Confirmation Date,
or if the Confirmation Date or the Effective Date does not
20
<PAGE>
occur, then this Plan will be null and void. In such event, nothing contained
herein will be deemed to constitute a waiver or release of any Claims by or
against the Debtors or any other person, or to prejudice in any manner the
rights of the Debtors or any person in any further proceedings involving the
Debtors. The withdrawal of either the Debtors or the Creditors Committee as a
proponent of this Plan will not result in the withdrawal or revocation of this
Plan and, in such event, the non-withdrawing party may proceed with its efforts
to confirm this Plan.
21.6 Due Authorization By Creditors: Each and every Creditor who elects to
participate in the Distributions provided for herein warrants that it is
authorized to accept in consideration of the Claim against the Debtors the
Distributions provided for in this Plan and that there are no outstanding
commitments, agreements, or understandings, express or implied, that may or can
in any way defeat or modify the rights conveyed or obligations undertaken by it
under this Plan.
21.7 Implementation: The Debtors will be authorized to take all necessary
steps, and perform all necessary acts, to consummate the terms and conditions of
the Plan.
21.8 Ratification: The Confirmation Order will ratify all transactions
effected by the Debtors during the pendency of this Chapter 11 Case.
21.9 Limitation of Liability in Connection with the Plan, Disclosure
Statement and Related Documents and Related Indemnity:
(a) The Plan Participants will neither have nor incur any liability
to any entity for any act taken or omitted to be taken in connection with
or related to the formulation, preparation, dissemination, implementation,
confirmation or consummation of the Plan, the Disclosure Statement, the
Confirmation Order or any contract, instrument, release or other agreement
or document created or entered into, or any other act taken or omitted to
be taken in connection with the Plan, the Disclosure Statement or the
Confirmation Order, including solicitation of acceptances of the Plan;
provided, however, that the provisions of this Section 21.9(a) shall have
no effect on the liability of any Plan Participant that would otherwise
result from any such act or omission to the extent that such act or
omission is determined in a Final Order to have constituted gross
negligence or willful misconduct.
(b) On and after the Effective Date, the Reorganized Parent Company
will indemnify each Plan Participant, hold each Plan Participant harmless
from, and reimburse each Plan Participant for, any and all losses, costs,
expenses (including attorneys' fees and expenses), liabilities and damages
sustained by a Plan Participant arising from any liability described in
this Section 21.9.
21
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21.10 Section Headings: The section headings used in this Plan are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Plan.
DATED: February 14, 2000, Dallas, Texas
COHO ENERGY, INC.
By: /s/ JEFFREY CLARKE
-------------------------------
Jeffrey Clarke
President and Chief Executive Officer
OFFICIAL COMMITTEE OF
UNSECURED CREDITORS
By: /s/ STUART J. LISSNER
-------------------------------
Authorized representative
COUNSEL FOR THE DEBTORS
/s/ MICHAEL W. ANGLIN
----------------------------------
OF COUNSEL: Michael W. Anglin
State Bar No. 01260800
Zack A. Clement Louis R. Strubeck, Jr.
FULBRIGHT & JAWORSKI L.L.P. State Bar No. 19425600
1301 McKinney Street FULBRIGHT & JAWORSKI L.L.P.
Suite 4100 2200 Ross Avenue, Ste. 2800
Houston, Texas 770 10-3095 Dallas, Texas 75201
(713) 651-5434 (214) 855-8000
(713) 651-5246 (Facsimile) (214) 855-8200 (Facsimile)
COUNSEL FOR THE
OFFICIAL COMMITTEE OF
UNSECURED CREDITORS
/s/ THOMAS B. WALPER
---------------------------------
OF COUNSEL: Thomas B. Walper, Esq.
MUNGER, TOLLES & OLSON LLP
Susan B. Hersh 355 South Grand Avenue. 35th Floor
LAW OFFICE OF SUSAN B. HERSH. PC Los Angeles, California 90071
12900 Preston Road, Ste. 900 (213) 683-9193
Dallas, Texas 75230 (213) 687-3702 (Facsimile)
(972) 503-7070
(972) 503-7077 (Facsimile)
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Exhibit II
COHO ENERGY, INC.
COHO RESOURCES, INC.
COHO LOUISIANA PRODUCTION COMPANY
COHO EXPLORATION, INC.
COHO OIL & GAS, INC.
INTERSTATE NATURAL GAS COMPANY
------------------------------
SECURITIES PURCHASE AGREEMENT
------------------------------
Dated as of March 31, 2000
------------------------------
$72,000,000 15.0% Senior Subordinated Notes Due March 31, 2007
Shares of New Common Stock of Coho Energy, Inc.
<PAGE>
COHO ENERGY, INC.
COHO RESOURCES, INC.
COHO LOUISIANA PRODUCTION COMPANY
COHO EXPLORATION, INC.
COHO OIL & GAS, INC.
INTERSTATE NATURAL GAS COMPANY
------------------------------
SECURITIES PURCHASE AGREEMENT
------------------------------
$72,000,000 15.0% Senior Subordinated Notes Due March 31, 2007
Shares of New Common Stock of Coho Energy, Inc.
Dated as of March 31, 2000
PPM America Special Investments Fund, L.P.
PPM America Special Investments CBO II, L.P.
225 West Wacker Drive
Suite 1200
Chicago, Illinois 60606
Appaloosa Investment Limited Partnership I
Palomino Fund Ltd.
Tersk LLC
26 Main Street
Chatham, New Jersey 07928
Pacholder Value Opportunity Fund, L.P.
Pacholder High Yield Fund, Inc.
One Group High Yield Bond Fund
Evangelical Lutheran Church in America Board of Pensions
c/o Pacholder Associates, Inc.
8044 Montgomery Road
Suite 480
Cincinnati, Ohio 45236
AAFES Supplemental Deferred Compensation Plan
AAFES Retiree Medical Dental & Life Insurance Plan
AAFES Retirement Annuity Basis Plan
California State Automobile Association Inter-Insurance Bureau
<PAGE>
California State Automobile Association
The California Endowment
Canada Life Insurance Company of America
Canada Life Assurance Company - CDN
Canada Life Assurance Company - USA
Howard Hughes Medical Institute
Hughes Aircraft Company Master Retirement Trust
IBM Retirement Plan - High Yield
International Paper Company
General Board of Pension and Health Benefits of the United Methodist Church
OCM High Yield Fund II, L.P.
OCM High Yield Limited Partnership
OCM High Yield Trust
Pacific Gas & Electric Retirement Plan Master Trust
Pacific Gas & Electric Company Bargained VEBA
RK Mellon FOundation
c/o Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, California 90071
Ladies and Gentlemen:
COHO ENERGY, INC., a Texas corporation, as debtor-in-possession (together
with any successors and assigns that become such in accordance herewith, the
"Company"); COHO RESOURCES, INC., a Nevada corporation (together with any
successors and assigns that become such in accordance herewith, "CRI"); COHO
LOUISIANA PRODUCTION COMPANY, a Delaware corporation (together with its
successors and assigns who become such in accordance herewith, "CLP"); COHO
EXPLORATION, INC., a Delaware corporation (together with any successors and
assigns that become such in accordance herewith, "CEX"); COHO OIL & GAS, INC., a
Delaware corporation (together with any successors and assigns that become such
in accordance herewith, "COG"); and INTERSTATE NATURAL GAS COMPANY, a Delaware
corporation (together with any successors and assigns that become such in
accordance herewith, "INGC") (the Company, CR1, CLP, CEX, COG and INGC,
collectively, the "Issuers" or the "Obligors," and, each individually, an
"Issuer" or "Obligor"), hereby agree with you as set forth below.
1. PURCHASE AND SALE OF SECURITIES.
1.1 Issuance of Securities.
(a) Issuance of Notes. The Issuers will authorize the issuance of
Seventy-Two Million Dollars ($72,000,000) in aggregate principal amount of their
15.0% Senior Subordinated Notes due March 31, 2007 (all such notes, whether
initially issued, or issued in exchange or substitution for, any such note, in
each case in accordance with the Note Agreement, are referred to collectively
herein as the "Notes" and individually as a "Note"). The Notes shall be issued
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<PAGE>
pursuant to a Note Agreement (as may be amended, restated or otherwise modified
from time to time, the "Note Agreement") in the form of Exhibit 1.1(a).
(b) Issuance of Additional Shares. The Company will authorize the
issuance of shares of New Common Stock, as defined in the Plan of Reorganization
pursuant to the Bankruptcy Case (such shares of New Common Stock, the
"Additional Shares") representing fourteen and four-tenths percent (14.4%) of
such New Common Stock on a fully diluted basis after giving effect to the
issuance of the Additional Shares and the Rights Offering (as defined in the
Plan of Reorganization), as such numbers may be adjusted from time to time. The
certificates representing the Additional Shares (the "Additional Share
Certificates") shall be in the form of Exhibit 1.1(b) hereto, and the Additional
Shares shall have the terms provided in the Additional Share Certificates.
(c) Post-Closing Delivery of Additional Shares. The Company agrees
to issue the Additional Shares in accordance with the Plan of Reorganization on
the earlier to occur of:
(i) the closing of the Rights Offering pursuant to the
Company's Registration Statement on Form S-1 filed with the Securities and
Exchange Commission, if the Company is able to include within that
Registration Statement the Additional Shares, if such registration of the
Additional Shares can comply with all applicable laws (including blue sky
laws), and if such Registration Statement is declared effective by the
Securities and Exchange Commission; or
(ii) the first business day that is six months after the
consummation of the Rights Offering made pursuant to the Registration
Statement described above.,
the Company will deliver to the Purchasers or their successors and assigns, pro
rata as their respective interests may appear, certificates representing the
Additional Shares in accordance with Annex 1 and Annex 1(A) attached hereto and
such number of Additional Shares, if any, as shall be necessary to make the
aggregate number of Additional Shares delivered pursuant to this Agreement equal
to fourteen and four-tenths percent (14.4%) of all shares of New Common Stock
then outstanding after giving effect to the issuance of all shares of New Common
Stock pursuant to the Rights Offering. All certificates representing the
Additional Shares, when issued in accordance with the provisions of this
Agreement shall be affixed with the required legends giving notice of the
restrictions imposed pursuant to the Registration Rights Agreement and any other
applicable agreements related to the Plan of Reorganization, and you shall have
received copies of all such certificates.
1.2 The Closing.
(a) Purchase and Sale of Purchased Securities.
(i) The Issuers hereby agree to sell to you and you hereby
agree to purchase from the Issuers, in accordance with the provisions
hereof, the aggregate principal amount of Notes set forth below your name
on Annex 1 and Annex 1A; and
(ii) the Company hereby agrees to sell to you and you hereby
agree to purchase from the Company, in accordance with the provisions
hereof, the aggregate
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<PAGE>
number and series of Additional Shares in accordance with Annex 1 and
Annex 1(A) attached hereto,
for an aggregate purchase price for such Notes and such Additional Shares
(collectively the "Purchased Securities") equal to one hundred percent
(100%) of the principal amount of the Notes to be purchased.
(b) The Closing. The closing (the "Closing") of the sale of the
Notes will be held at 10:00 a.m., local time, on March 31, 2000, or such other
time and date as the Company and you shall agree (the "Closing Date"), at the
offices of Anderson Kill & Olick, P.C., in Chicago, Illinois, or at such other
location in Chicago, Illinois, as the Company and you shall agree. At the
Closing the Issuers will deliver to you one or more Notes (as set forth below
your name on Annex 1 and Annex 1A), in the denominations and series indicated on
Annex 1 and Annex 1A, in the aggregate principal amount of your purchase, dated
the Closing Date and registered in the name of the holder indicated on Annex 1
and Annex 1A against payment by federal funds wire transfer in immediately
available funds of the purchase price therefor to the account described in Annex
2.
2. REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.
To induce you to enter into this Agreement and to purchase and pay for the
Purchased Securities to be delivered to you at the Closing, the Obligors
represent and warrant as set forth below (except for Section 2.8, which the
Company alone represents and warrants).
2.1 Nature of Business. The representations and warranties of the Company
set forth in the Credit Facility are true and correct in all material respects
as if they were made by the Company to the Purchasers hereunder as of the
Closing Date.
2.2 Sale is Legal and Authorized; Obligations are Enforceable.
(a) Sale of Purchased Securities is Legal and Authorized. Based in
part on the representations and warranties in Section 3 hereof, each of the
issuance, sale and delivery of the Notes by the Issuers, the execution and
delivery by each Obligor and each Subsidiary of such Obligor of the Standby Debt
Documents to which it is a party, and compliance by each Obligor and each
Subsidiary of such Obligor with all of the provisions of the Standby Debt
Documents to which it is a party:
(i) is within the powers of such Obligor and each of such
Subsidiaries; and
(ii) is legal and does not conflict with, result in any breach
of any of the provisions of, constitute a default under, or result in the
creation of any Lien upon any Property of any Obligor or any such
Subsidiary under the provisions of:
(A)any Organic Document of, or any agreement or instrument to
which, such Obligor or such Subsidiary is a party or by which such
Obligor or such Subsidiary or any of its respective Property may be
bound;
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<PAGE>
(B) any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to such Obligor or
such Subsidiary or any of its respective Property; or
(C) any statute or other rule or regulation of any
Governmental Authority applicable to such Obligor or such Subsidiary
or any of its respective Property;
except for such conflicts, breaches, defaults or Liens which in the
aggregate could not be reasonably expected to have a Material Adverse
Effect.
(b) Obligations are Enforceable. Each Obligor and each Subsidiary of
each Obligor has duly authorized by all necessary action on its part including
the execution and delivery of each of the Standby Debt Documents to which it is
a party. Each of the Standby Debt Documents to which such Obligor or any such
Subsidiary is a party has been executed and delivered by one or more duly
authorized officers of such Obligor or such Subsidiary, and constitutes a legal,
valid and binding obligation of such Obligor or such Subsidiary, enforceable in
accordance with its terms, except that, in each case, the enforceability thereof
may be:
(i) limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium, or other similar laws affecting the
enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
2.3 Governmental Consent to Sale of Purchased Securities.
(a) Neither the nature of the Obligors and any Subsidiary of their
Subsidiaries nor of any of their respective businesses or Properties, nor any
relationship between any Obligor or any such Subsidiary and any other Person,
nor any circumstance in connection with the offer, issuance, sale or delivery of
the Notes, the execution and delivery of any Standby Debt Document, nor the
performance of the obligations of any Obligor or any Subsidiary thereunder, is
such as to require a consent, approval or authorization of, or pre-filing,
registration or qualification with, any Governmental Authority on the part of
any Obligor or such Subsidiary as a condition thereto, except for confirmation
of the Plan of Reorganization by the Bankruptcy Court.
(b) Each of the issuance and sale of the Notes, the incurrence of
the Indebtedness evidenced by the Standby Debt Documents and the other
obligations represented thereby, the execution and delivery of the Standby Debt
Documents and the performance of the obligations of each Obligor and the
Subsidiaries of each Obligor hereunder and thereunder, by each Obligor and its
Subsidiaries:
(i) is not subject to regulation under the Investment Company
Act of 1940, as amended, the Public Utility Holding Company Act of 1935,
as amended, the Transportation Acts of the United States of America (49
U.S.C.), as amended, or the Federal Power Act, as amended; and
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<PAGE>
(ii) does not violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable to any Obligor
or any of its Subsidiaries.
2.4 No Defaults under Notes and Additional Shares.
No event has occurred and no condition exists that, upon the execution and
delivery of the Standby Debt Documents and the issuance and sale of the Notes in
connection therewith, would constitute a Default or an Event of Default.
2.5 Private Offering of Purchased Securities.
No Obligor nor any Person acting on behalf of any Obligor has offered any
of the Notes or the Additional Shares for sale to, or solicited offers to buy
any thereof from, or otherwise approached or negotiated with respect thereto
with, any prospective purchaser, other than twenty-nine or fewer institutional
"accredited investors" (as defined in Regulation D under the Securities Act)
(including you), each of whom was offered all or a portion of the Notes and the
Additional Shares at private sale for investment.
2.6 Use of Proceeds.
(a) Use of Proceeds. The Obligors shall apply the proceeds from the
sale of the Purchased Securities as contemplated by the Plan of Reorganization
and the Note Agreement.
(b) Margin Regulations. None of the transactions contemplated in any
of the Standby Debt Documents (including, without limitation, the use of the
proceeds from the sale of the Purchased Securities) violates or will result in a
violation of Section 7 of the Exchange Act, or any regulation issued pursuant
thereto, including, without limitation, Regulation T, Regulation U or Regulation
X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter
11.
(c) Absence of Foreign or Enemy Status. Neither the sale of the
Purchased Securities nor the use of proceeds from the sale thereof will result
in a violation of any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended), or any
ruling issued thereunder or any enabling legislation or Presidential Executive
Order in connection therewith.
2.7 Credit Facility.
Upon consummation of the transactions contemplated by this Agreement, the
Obligors will have duly performed all of their obligations in connection with
the Credit Facility to be performed at or prior to the closing thereunder, the
Loan Documents (as such term is defined in the Credit Facility) thereunder have
all been duly executed and delivered and are in full force and effect, and no
Default or Event of Default (as such terms are defined in the Credit Facility)
has occurred thereunder. The Company has provided to you or your agents true,
correct and complete copies of each of the agreements and instruments executed
and delivered in connection with the Credit Facility, and there is no other
material agreement or understanding between or among any Obligor and any of the
holders of any Senior Indebtedness that has not been so provided to you.
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2.8 Capitalization.
(a) Capitalization. All equity interests in the Company (including
Capital Stock), Rights and other Securities (including all shares of the New
Common Stock) have been duly authorized and validly issued and are fully paid,
non-assessable, free and clear of any Lien.
(b) Restrictive Agreements. Other than the Registration Rights
Agreement, to the best knowledge of the Responsible Officers of the Obligors,
there is no agreement or understanding between or among the holders of equity
interests in the Company or any Rights in respect of the foregoing, in each case
regarding any of the equity interests, Rights or the holders thereof.
2.9 No Placement Fees.
No investment banker, placement agent, broker or other intermediary was
employed by any Obligor or its Affiliates in connection with the issuance of the
Purchased Securities or the incurrence or placement of the Indebtedness under
the Credit Facility, and, therefore, no fees or other consideration have been
paid or are payable to any such Persons in connection with such transaction.
2.10 Confirmation Order.
A Confirmation Order has been duly entered by the Bankruptcy Court, is in
full force and effect and has not been vacated or otherwise modified since its
original entry.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser represents and warrants to each of the Issuers that:
3.1 Purchase for Investment.
(a) It is an "accredited investor" within the meaning of Rule 501(a)
of the Securities Act and it is purchasing the Purchased Securities listed on
Annex 1 and Annex 1A below its name for its own account, or for the account of
one or more separate accounts maintained by it, for investment and with no
present intention of, or view to, distributing such Purchased Securities or any
part thereof except in compliance with the Securities Act, but without prejudice
to its right at all times to:
(i) sell or otherwise dispose of all or any part of the
Purchased Securities under a registration statement filed under the
Securities Act, or in a transaction exempt from the registration
requirements of such act, including a transaction pursuant to Rule 144A:
and
(ii) have control over the disposition of all of its assets to
the fullest extent required by any applicable law;
(b) the execution, delivery and performance by it of the Standby
Debt Documents to which it is a party, including the purchase of the Notes and
the Additional Shares pursuant
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hereto, are within such Purchaser's corporate powers and have been duly and
validly authorized by all requisite action;
(c) the Standby Debt Documents to which it is a party have been duly
executed and delivered by each such Purchaser; and
(d) each Standby Debt Document to which it is a party constitutes a
valid and binding agreement of such Purchaser, enforceable in accordance with
its terms.
It is understood and acknowledged that, in making the representations
contained in Section 2.3(a) and Section 2.5, each Obligor is relying, to the
extent applicable, upon each Purchaser's representation as set forth in Section
3.1(a) above.
4. CLOSING CONDITIONS.
Your obligations under this Agreement, including, without limitation, the
obligation to purchase and pay for the Purchased Securities to be delivered to
you at the Closing, are subject to the following conditions precedent, and the
failure by the Obligors to satisfy all such conditions shall relieve you, at
your election, of all such obligations.
4.1 Opinions of Counsel.
You shall have received from Fulbright & Jaworski, L.L.P., counsel to the
Obligors, a closing opinion, dated as of the Closing Date, and substantially in
the form set forth in Exhibit 4.1 and as to such other matters as you may
reasonably request. This Section 4.1 shall constitute direction by the Obligors
to such counsel named in this Section 4.1 to deliver such closing opinion to
you.
4.2 Representations and Warranties True; Compliance.
(a) Representations and Warranties True. The representations and
warranties contained in Section 2 shall be true in all material respects on the
Closing Date with the same effect as though made on and as of that date.
(b) Compliance with this Agreement and Standby Debt Documents. Each
Obligor shall have performed and complied with all agreements and conditions
contained herein and in the other Standby Debt Documents that are required to be
performed or complied with by such Obligor on or prior to the Closing Date, and
such performance and compliance shall remain in effect on the Closing Date,
unless such performance or compliance has been waived by you in accordance with
the terms hereof.
4.3 Officers' Certificates.
You shall have received a certificate dated the Closing Date and signed
(on behalf of each Issuer) by the Secretary of each Issuer, substantially in the
form of Exhibit 4.3.
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4.4 Organic Documents.
You shall have received:
(a) Good Standing Certificates - for each Obligor, a copy of its
certificate of incorporation certified by the Texas, Nevada or Delaware
Secretary of State, as the case may be, and a short-form certificate of good
standing from the Texas, Nevada or Delaware Secretary of State, as the case may
be, certifying the due organization and good standing of such Obligor; and
(b) Organic Documents - for each Obligor, a copy of its Organic
Documents attached to one of the Certificates provided pursuant to Section 4.3
above, including such of its Organic Documents as may be certified by the Texas,
Nevada or Delaware Secretary of State, as the case may be.
4.5 Legality.
The Notes shall on the Closing Date qualify as a legal investment for you
(if you are an insurance company) under applicable insurance law (without regard
to any "basket" or "leeway" provisions), and in any case, the acquisition
thereof shall not subject you to any penalty or other onerous condition pursuant
to any such law or regulation. and you shall have received such evidence as you
may reasonably request to establish compliance with this condition.
4.6 Standby Debt Documents.
The Issuers shall have executed and delivered to you the Note Agreement,
in the form of Exhibit 1.1(a), and such Note Agreement shall be in full force
and effect. The Issuers shall have executed, delivered and issued to you the
Notes in the respective amounts set forth below your name on Annex 1 and Annex
1A.
4.7 [Reserved]
4.8 Credit Facility.
The Obligors shall have delivered to you or your agent a copy of the fully
executed Credit Facility, which shall be in form and substance satisfactory to
you and your special counsel, certified as true and correct by an officer of the
Company. On the Effective Date, after Closing, the Company will have at least
Fifteen Million Dollars ($15,000,000) in cash and borrowing availability under
the Credit Facility.
4.9 Plan of Reorganization.
A Confirmation Order shall have been entered by the Bankruptcy Court and
shall be in full force and effect. The Issuers and all other parties to the Plan
of Reorganization shall have performed all of their obligations thereunder as of
the date of this Agreement.
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4.10 Certain Consents and Agreements.
Each holder of any Indebtedness, equity interests, Rights or other
Securities of any Obligor, and each party to any other contract or other
agreement with any Obligor, the consent of which is, in the reasonable judgment
of you and your special counsel, necessary to permit such Obligor to enter into
the transactions contemplated by this Agreement and to perform its obligations
in respect of the Standby Debt Documents and the Credit Facility, shall have
executed and delivered to you a consent, in form and substance reasonably
acceptable to you and your special counsel, to the transactions contemplated by
the Standby Debt Documents.
4.11 Private Placement Numbers.
Private placement numbers for each of the Notes from the CUSIP Service
Bureau of Standard & Poor's, a division of the McGraw-Hill Companies, shall have
been obtained by you.
4.12 [Reserved]
4.13 Fees and Expenses.
Subject to Bankruptcy Court approval, the Issuers shall have paid in full
the following fees to and expenses of the Purchasers:
(a) Two Hundred Thousand Dollars ($200,000), payable to PPM America,
Inc., as agent, on behalf of itself and the other Purchasers as an initial
deposit (the "Initial Deposit") to be applied against out-of-pocket costs and
expenses of the Purchasers in connection with their due diligence review and the
preparation and negotiation of the commitment letter and loan documentation; and
(b) a fee equal to the greater of One Million Dollars ($1,000,000)
or three and one-half percent (3.50%) of the aggregate principal amount of the
Notes purchased; and
(c) all fees and disbursements required to be paid pursuant to
Section 6.6 (to the extent not already paid by application of the $200,000
above).
4.14 Proceedings Satisfactory.
All proceedings taken in connection with the issuance and sale of the
Notes and all documents and papers relating thereto shall be reasonably
satisfactory to you and your special counsel. You and your special counsel shall
have received copies of such documents and papers as you or they may reasonably
request in connection therewith or in connection with your special counsel's
closing opinion, all in form and substance reasonably satisfactory to you and
your special counsel.
4.15 Registration Rights Agreement.
The Company shall have caused to be executed and delivered a Registration
Rights Agreement, the Registration Rights Agreement to be in the form attached
hereto as Exhibit 4.15.
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The Registration Rights Agreement shall be in full force and effect, and an
executed copy of such Registration Rights Agreement shall have been delivered to
each Purchaser.
5. INTERPRETATION OF THIS AGREEMENT.
5.1 Terms Defined.
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
Additional Share Certificates - Section 1.1(b).
Additional Shares - Section 1.1(b).
Agreement - means this Securities Purchase Agreement, as it may be
amended, restated or otherwise modified from time to time.
Bankruptcy Case - means, as consolidated for administrative purposes
pursuant to order of the Bankruptcy Court, the cases commenced by each Obligor
under Chapter 11 of the United States Bankruptcy Code on August 23, 1999.
Bankruptcy Court - means the United States Bankruptcy Court for the
Northern District of Texas.
Capital Stock - means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
Closing - Section 1.2(b).
Closing Date - Section 1.2(b).
Code - means the Internal Revenue Code of 1986, together with all rules
and regulations promulgated pursuant thereto, as amended from time to time.
Company - the introductory sentence of this Agreement.
Confirmation Order - means a final, non-appealable order of the Bankruptcy
Court confirming the Plan of Reorganization.
Credit Facility - means the Credit Agreement together with the documents
related thereto (including, without limitation, any guaranty agreements and
security documents), in each case as such agreements may be amended (including
any amendment and restatement thereof), supplemented or otherwise modified from
time to time, including any Refinancing Indebtedness.
Environmental Laws - means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or
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reclamation of natural resources, the management, release or threatened release
of any Hazardous Material or to health and safety matters.
ERISA - means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations and interpretations by the
Internal Revenue Service or the Department of Labor thereunder.
Exchange Act - means the Securities Exchange Act of 1934, as amended,
together with the rules and regulations of the SEC thereunder.
Governmental Authority - means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
Governmental Rule - means any statute, law, regulation, ordinance, rule,
judgment, order, decree, permit, concession, grant, franchise, license,
agreement, directive, requirement of, or other governmental restriction or any
similar binding form of decision of or determination by, or any binding
interpretation or administration of any of the foregoing by, any Governmental
Authority, whether now or hereafter in effect.
Issuers - the introductory sentence of this Agreement.
Material Adverse Effect - means a material adverse effect on (a) the
business, assets, operations or condition (financial or otherwise) of the
Company, or of the Company and its Subsidiaries taken as a whole, (b) the
ability of the Company or of any its Subsidiaries to perform any of their
respective obligations under any Standby Debt Document to which it is a party or
(c) the rights of or benefits available to the Purchasers under any Standby Debt
Document.
New Common Stock - See Section 2.47 of the Plan of Reorganization.
Note Agreement - Section 1.1(a).
Notes - Section 1.1(a).
Obligors - the introductory sentence of this Agreement.
Organic Documents - means, relative to any Person, its articles of
organization, formation or incorporation (or comparable document), its by-laws
or operating agreement and all shareholder agreements, partnership agreements,
limited liability company or operating agreements, voting trusts and similar
arrangements applicable to ownership.
Plan of Reorganization - has the meaning set forth in the recitals of the
Credit Agreement.
Person - means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
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Property - means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
Purchased Securities - means the Notes and the Additional Shares to be
purchased by each Purchaser pursuant to Section 1.2 of this Agreement.
Registration Rights Agreement - Section 4.15.
Responsible Officer - means the president or chief financial officer of
the Company and any senior management officer of any Subsidiary thereof.
Right - means and includes:
(a) any warrant or any option (including, without limitation,
employee stock options) to acquire Capital Stock;
(b) any right issued to holders of the Capital Stock of the Company,
or any class thereof, permitting the holders thereof to subscribe to additional
Capital Stock (pursuant to a rights offering or otherwise);
(c) any right to acquire Capital Stock pursuant to the provisions of
any Security convertible or exchangeable into Capital Stock; and
(d) any similar right permitting the holder thereof to subscribe for
or purchase Capital Stock.
Rights Offering - see section 2.63 of the Plan of Reorganization.
Rule 144A - means Rule 144A promulgated under the Securities Act, 17
C.F.R. ss.230.144A, as such rule may be amended from time to time.
Securities Act - means the Securities Act of 1933, as amended from time to
time.
Security - means "security" as defined by Section 2(1) of the Securities
Act.
Standby Debt Documents - means and includes this Agreement, the Note
Agreement, the Notes, the Additional Share Certificates and any other
agreements, certificates and instruments to be executed pursuant to the terms of
any of the foregoing, as each may be amended, restated or otherwise modified
from time to time.
Subsidiary - means any subsidiary of any of the Issuers. For purposes of
the representations and warranties made herein on the Effective Date, the term
"Subsidiary" includes each of the Issuers and their subsidiaries.
5.2 Other Definitions.
Except as otherwise provided herein, all capitalized terms as used herein
shall have the respective meanings ascribed to them in the form of Note
Agreement attached hereto.
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5.3 Directly or Indirectly.
Where any provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, including
actions taken by or on behalf of any partnership in which such Person is a
general partner.
5.4 Section Headings and Table of Contents and Construction.
(a) Section Headings and Table of Contents, etc. The titles of the
Sections of this Agreement and the Table of Contents of this Agreement appear as
a matter of convenience only, do not constitute a part hereof and shall not
affect the construction hereof. The words "herein," "hereof," "hereunder" and
"hereto" refer to this Agreement as a whole and not to any particular Section or
other subdivision. References to Sections are, unless otherwise specified,
references to Sections of this Agreement. References to Annexes and Exhibits
are, unless otherwise specified, references to Annexes and Exhibits attached to
this Agreement.
(b) Independent Construction. Each covenant contained herein shall
be construed (absent an express contrary provision herein) as being independent
of each other covenant contained herein, and compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
5.5 Governing Law.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS. IN
ADDITION, THE PARTIES HERETO SELECT, TO THE EXTENT THEY MAY LAWFULLY DO SO, THE
INTERNAL LAWS OF THE STATE OF ILLINOIS AS THE APPLICABLE INTEREST LAW (AS
DEFINED IN THE NOTE AGREEMENT).
6. MISCELLANEOUS.
6.1 Notices.
(a) Method; Address. All notices to be provided hereunder or under
the Notes shall be in writing and shall be delivered either by nationwide
overnight courier or by facsimile transmission (receipt acknowledged by
electronic transmission). Notices to any Issuers shall be addressed as set forth
on Annex 2, or at such other address of which such Issuer shall have notified
each holder of Notes. Notices to the holders of the Notes shall be addressed as
set forth on Annex 1 and Annex 1A by such holder, or at such other address of
which such holder shall have notified the Issuers (and the Issuers shall record
such address in the register for the registration and transfer of Notes
maintained pursuant to Section 2.1 of the Note Agreement).
(b) When Given. Any notice addressed and delivered as herein
provided shall be deemed to be received when actually delivered to the address
of the addressee (whether or not delivery is accepted except for the negligence
of the delivering party) or received by the telecopy
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machine of the recipient (assuming evidence of electronic confirmation of
transmission). Any notice not so addressed and delivered shall be ineffective.
(c) Service of Process. Notwithstanding the foregoing provisions of
this Section 6.1, service of process in any suit, action or proceeding arising
out of or relating to this Agreement or any document, agreement or transaction
contemplated hereby, or any action or proceeding to execute or otherwise enforce
any judgment in respect of any breach hereunder or under any document or
agreement contemplated hereby, shall be delivered in the manner provided in
Section 6.7(c).
6.2 Reproduction of Documents.
This Agreement and all documents relating hereto, including, without
limitation, consents, waivers and modifications that may hereafter be executed,
documents received by any holder of Notes on the Closing Date (except the Notes
themselves), and financial statements, certificates and other information
previously or hereafter furnished to any holder of Notes, may be reproduced by
any Issuers or any holder of Notes by any photographic, photostatic, microfilm,
micro-card, miniature photographic, digital or other similar process and each
holder of Notes may destroy any original document so reproduced. Any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by any Issuer or such
holder of Notes in the regular course of business) and any enlargement.
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence. Nothing in this Section 6.2 shall prohibit any Issuers
or any holder of Notes from contesting the accuracy or validity of any such
reproduction.
6.3 Survival.
All warranties, representations, certifications and covenants made by the
Issuers herein, in the Note Agreement or in any certificate or other instrument
delivered hereunder shall be ordered to have been relied upon by each holder of
Notes and shall survive the delivery of the Notes and the Additional Shares
regardless of any investigation made by or on behalf of any party hereto. All
statements in any certificate or other instrument delivered pursuant to the
terms hereof or of the Note Agreement shall constitute representations and
warranties of the Issuers hereunder. All obligations hereunder (other than
payment of the Notes, but including, without limitation, reimbursement
obligations in respect of costs, expenses and fees) shall survive the payment of
the Notes and the termination hereof.
6.4 Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of the Notes,
and shall be enforceable by any such holder whether or not an express assignment
to such holder of rights hereunder shall have been made by any such holder or
its successor or assign. Anything contained in this Section 6.4 notwithstanding,
the Issuers may not assign any of their respective rights, duties or obligations
hereunder or under any of the other Standby Debt Documents without the prior
written consent of all holders of Notes.
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For purposes of the avoidance of doubt, any holder of a Note shall be permitted
to pledge or otherwise grant a Lien in and to such Note (including, without
limitation, pledging such Note to a trustee for the benefit of certain secured
noteholders pursuant to documents relating to the financing of such holder or to
one or more banks or other institutions providing financing in connection with
the purchase by such holder of such Note); provided, however, that any such
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pledgee or holder of a Lien shall not be considered a holder hereunder until it
shall have foreclosed upon such Note in accordance with applicable law and
informed the Issuers, in writing, of the same.
6.5 Amendment and Waiver.
Subject to further limitations set forth in the Note Agreement, this
Agreement may be amended, and the observance of any term hereof may be waived,
with (and only with) the written consent of the Issuers and the Required
Holders.
6.6 Expenses.
(a) Amendments and Waivers. The Issuers shall pay when billed the
reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees) incurred by the holders of the Notes in connection with the consideration,
negotiation, preparation or execution of any amendments, waivers, consents,
standstill agreements and other similar agreements with respect to this
Agreement or any other Standby Debt Document (whether or not any such
amendments, waivers, consents, standstill agreements or other similar agreements
are executed).
(b) Restructuring and Workout; Inspections. At any time when any
Issuers and the holders of Notes are conducting restructuring or workout
negotiations in respect hereof, or an Event of Default exists, the Issuers shall
pay when billed the reasonable out-of-pocket costs and expenses (including
reasonable attorneys' fees and the fees of professional advisors) incurred by
the holders of the Notes in connection with the assessment, analysis or
enforcement of any rights or remedies that are or may be available to the
holders of Notes; provided, however, that at all other times inspections will be
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at the expense of the inspecting holder of Notes.
(c) Collection. If the Issuers shall fail to pay when due any
principal of, or Prepayment Fee (as defined in the Note Agreement) or interest
on, any Note, the Issuers shall pay to each holder of Notes, to the extent
permitted by law, such amounts as shall be sufficient to cover the out-of-pocket
costs and expenses, including but not limited to reasonable attorneys' fees,
incurred by such holder in collecting any sums due on such Note.
6.7 Waiver of Jury Trial; Consent to Jurisdiction; Etc.
(a) Waiver of Jury Trial. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY.
(b) Consent to Jurisdiction. ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OF THE
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DOCUMENTS, AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR ANY ACTION OR
PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH
UNDER THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, MAY BE BROUGHT BY SUCH PARTY IN ANY
FEDERAL DISTRICT COURT LOCATED IN CHICAGO, ILLINOIS, OR ANY ILLINOIS STATE COURT
LOCATED IN CHICAGO, ILLINOIS, AS SUCH PARTY MAY IN ITS SOLE DISCRETION ELECT,
AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE NONEXCLUSIVE IN PERSONAM
JURISDICTION OF EACH SUCH COURT, AND EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES AND AGREES NOT TO ASSERT IN ANY PROCEEDING BEFORE ANY TRIBUNAL, BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT IT IS NOT SUBJECT TO THE IN
PERSONAM JURISDICTION OF ANY SUCH COURT. IN ADDITION, EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT,
AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY BROUGHT IN ANY SUCH COURT, AND
HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) Service of Process. EACH PARTY HERETO IRREVOCABLY AGREES THAT
PROCESS PERSONALLY SERVED OR SERVED BY U.S. REGISTERED MAIL AT THE ADDRESSES
PROVIDED HEREIN FOR NOTICES SHALL CONSTITUTE, TO THE FULLEST EXTENT PERMITTED BY
LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT, AGREEMENT OR TRANSACTION
CONTEMPLATED HEREBY, OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE
ANY JUDGMENT IN RESPECT OF ANY BREACH HEREUNDER OR UNDER ANY DOCUMENT OR
AGREEMENT CONTEMPLATED HEREBY. RECEIPT OF PROCESS SO SERVED SHALL BE
CONCLUSIVELY PRESUMED AS EVIDENCED BY A DELIVERY RECEIPT FURNISHED BY THE UNITED
STATES POSTAL SERVICE OR ANY COMMERCIAL DELIVERY SERVICE.
(d) Other Forums. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
THE ABILITY OF ANY HOLDER OF NOTES TO SERVE ANY WRITS, PROCESSES OR SUMMONSES IN
ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER THE ISSUER
IN SUCH OTHER JURISDICTION, AND IN SUCH OTHER MANNER, AS MAY BE PERMITTED BY
APPLICABLE LAW.
6.8 Indemnification of Each Holder.
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From and at all times after the date of this Agreement, and in addition to
all of the holders' other rights and remedies against the Issuers, the Issuers
agree jointly and severally to indemnify and hold harmless each holder of the
Notes and each director, officer, employee, agent, investment advisor and
affiliate of each such holder ("Indemnified Parties") against any and all claims
(whether valid or not), losses, damages, liabilities, costs and expenses of any
kind or nature whatsoever (including, without limitation, reasonable attorneys'
fees, costs and expenses), incurred by or asserted against such Indemnified
Party, from and after the date hereof, as a result of, arising from, or in any
way relating to, whether directly or indirectly, the execution, delivery,
performance or enforcement of this Agreement or the other Standby Debt Documents
or any transactions contemplated herein or therein, or arising out of any breach
of any representation or warranty, covenant or agreement of the Issuers or any
of the Subsidiaries under any Standby Debt Document, including, without
limitation any of the foregoing relating to the violation of any Environmental
Law applicable to the Properties of the Issuers and their Subsidiaries;
provided, however, that no Indemnified Party shall have the right to be
- -------- -------
indemnified hereunder for any liability resulting from the willful misconduct or
gross negligence of such Indemnified Party or with respect to liabilities
arising from legal proceedings commenced against such Indemnified Party by a
security holder or creditor of such Indemnified Party based upon alleged rights
afforded to such security holder or creditor solely in its capacity as such. All
of the foregoing losses, damages, costs and expenses of any Indemnified Party
shall be payable as and when incurred upon demand and shall be additional
obligations hereunder, except in the event any such Indemnified Party shall have
been added to such legal proceeding by the Issuer in order to establish the
liability of such Indemnified Party arising from its gross negligence or willful
misconduct. Without limiting the generality of the foregoing, but subject to the
foregoing, each Indemnified Party shall be entitled to collect, and the Issuers
shall be obligated jointly and severally to advance to each Indemnified Party,
to the fullest extent permitted by applicable law, all expenses (including,
without limitations reasonable fees and disbursements of counsel) attendant to
defending against any such claims (whether valid or not), when and as incurred,
regardless of whether any judicial determination of the Indemnified Party's
entitlement to such indemnity has been made, unless a final judicial
determination is made that such Indemnified Party is not entitled to such
indemnity, in which case such Indemnified Party shall promptly repay to the
Issuers, with interest at the applicable statutory rate applicable to judgments
in the relevant jurisdiction, all amounts so advanced by the Issuers. The
obligations of the Issuers and the rights of the Indemnified Parties under this
Section 6.8 shall survive the termination of this Agreement.
6.9 Entire Agreement.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
6.10 Execution in Counterpart.
This Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
hereto, and each set of counterparts that, collectively, show execution by each
party hereto shall constitute one duplicate original.
[Remainder of page intentionally left blank; next page is the signature page.]
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<PAGE>
Exhibit III
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This AGREEMENT made as of the 31st day of March, 2000, by and among
Coho Energy, Inc., a Texas corporation (the "Company"), PPM America Special
Investments Fund, L.P., a Delaware limited partnership ("PPM SIF"), PPM America
Special Investments CBO II, L.P., a Delaware limited partnership ("PPM CBO", and
collectively with PPM SIF, "PPM"), Appaloosa Management L.P., a Delaware limited
partnership ("Appaloosa Management") as agent and on behalf of certain funds
including Appaloosa Investment Limited Partnership I, a Delaware limited
partnership ("AILP"), Palomino Fund Ltd., a British Virgin Islands company
("Palomino") and Tersk LLC, a Delaware limited liability company ("Tersk" and,
collectively with Palomino, AILP and Appaloosa Management, "Appaloosa"),
Pacholder Associates, Inc., an Ohio corporation ("Pacholder Associates") as
agent and on behalf of certain funds including Pacholder Value Opportunity Fund,
L.P. ("Pacholder Value"), High Yield Fund, Inc. ("Pacholder Fund"), One Group
High Yield Bond ("One Group") and Evangelical Lutheran Church In America Board
of Pensions ("ELC," and together with One Group, Pacholder Fund, Pacholder Value
and Pacholder Associates, "Pacholder") and Oaktree Capital Management, LLC, a
California limited liability company ("Oaktree Capital") as general partner of
and investment manager for the entities set forth on Schedule I (Oaktree Capital
and such entities, collectively, "Oaktree"). PPM, Appaloosa, Oaktree, and
Pacholder are collectively referred to herein as the "Investors". PPM, Appaloosa
and Oaktree are collectively referred to herein as the "Old Noteholder
Investors".
WHEREAS, pursuant to the Company's First Amended Joint Plan of
Reorganization dated March 20, 2000 under Chapter 11 of the United States
Bankruptcy Code (Case No. 399-35929-HCA-11 in the United States Bankruptcy Court
for the Northern District of Texas, Dallas Division) (the "Plan"), each of the
Old Noteholder Investors has agreed to convert on the effective date of the Plan
all of the Company's 8-7/8% Senior Subordinated Notes due 2007 (the "Old Notes")
owned by such Old Noteholder Investor into shares of the reorganized Company's
common stock, par value $.0l per share ("Common Stock"); and
WHEREAS. it is a condition precedent to the obligation of each of
the Old Noteholder Investors to convert the Old Notes owned by such Old
Noteholder Investors into shares of Common Stock pursuant to the terms of the
Plan that the Company and the Old Noteholder Investors enter into a Registration
Rights Agreement with respect to the shares of Common Stock to be acquired by
the Old Noteholder Investors either as a result of the conversion of their Old
Notes in accordance with the terms of the Plan or otherwise; and
WHEREAS, pursuant to a Note Agreement dated as of the date hereof
(the "Note Agreement") by and among the Company, certain affiliates of the
Company and the Investors, the Investors have agreed, among other things, to
purchase from the Company $72,000,000 aggregate principal amount of the
Company's 15% Senior Subordinated Notes due March 31, 2007 (the "New Notes");
and
WHEREAS, in connection with the Investors' purchase of the New
Notes, the Company has agreed pursuant to the terms of a Securities Purchase
Agreement dated as of the
<PAGE>
date hereof by and among the Company, certain affiliates of the Company and the
Investors (the "Securities Purchase Agreement") to issue to each of the
Investors shares of Common Stock; and
WHEREAS, it is a condition precedent to the obligation of the
Investors to purchase the New Notes pursuant to the Note Agreement that the
Company and the Investors enter into a Registration Rights Agreement with
respect to the shares of Common Stock to be acquired by the Investors, pursuant
to the terms of the Securities Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. The following terms shall be used in this Agreement
with the following respective meanings:
"Affiliate" means (i) any Person directly or indirectly controlling,
controlled by or under common control with another Person; (ii) any Person
owning or controlling ten (10%) percent or more of the outstanding voting
securities of such other Person; (iii) any officer, director or partner of such
Person; and (iv) if such Person is an officer, director or partner, any such
company for which such Person acts in such capacity.
"Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Common Stock" means and includes (a) the Company's Common Stock,
$.01 par value per share and (b) any other securities into which or for which
the securities described in (a) above may be converted or exchanged pursuant to
a plan of recapitalization, reorganization, merger, sale of assets or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, or any
successor Federal statute, and the rules and regulations of the Commission (or
of any other Federal agency then administering the Exchange Act) thereunder,
all as the same shall be in effect at the time.
"Holder" means any holder of Registrable Stock.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any natural person. partnership, corporation or other
legal entity.
"Registrable Stock" means (a) the Common Stock issued or issuable to
any Investor in accordance with the terms of the Securities Purchase Agreement,
(b) all Common Stock issued or issuable to any Old Noteholder Investor in
accordance with the Plan, (c) all Common Stock now or hereafter owned by any
Investor which is acquired otherwise than pursuant to the terms of the
Securities Purchase Agreement or pursuant to the terms of the Plan so long as it
is held by any Investor or an Affiliate of any Investor and (d) any other shares
of Common Stock or other securities issued in respect of such shares by way of a
stock dividend, or stock split or in connection with a combination of shares,
recapitalization, merger or consolidation or reorganization; provided, however,
that such shares of Common Stock shall
-2-
<PAGE>
cease to be Registrable Stock when (i) a registration statement with respect to
the sale of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of in accordance with the plan of
distribution set forth in such registration statement, (ii) such securities
shall have been distributed in accordance with Rule 144 (or any successor
provision) under the Securities Act, or (iii) such securities shall have been
otherwise transferred, new certificates therefor not bearing a legend
restricting further transfer shall have been delivered in exchange therefor by
the Company and the subsequent disposition of such shares shall not require
registration or qualification under the Securities Act or any similar state law
then in force.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8, Form S-4, or successor
forms, or any registration statement covering only securities proposed to be
issued in exchange for securities or assets of another corporation).
"Securities Act" means the Securities Act of 1933, or any successor
Federal statute, and the rules and regulations of the Commission (or of any
other Federal agency then administering the Securities Act) thereunder, all as
the same shall be in effect at the time.
2. Shelf Registration.
(a) The Company shall use its best efforts to cause to be
filed pursuant to Rule 415 (or any successor provision) of the
Securities Act not later than January 31, 2001 a Shelf Registration
Statement relating to the offer and sale of the Registrable Stock by
the Holders from time to time (the "Shelf Registration Statement")
in accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement. The
Company shall use its best efforts to cause the Shelf Registration
Statement to be declared effective on or before March 31, 2001 and
to cause the Shelf Registration Statement to remain effective until
the earliest of (i) such time as all shares of Registrable Stock
have been sold thereunder, (ii) three years after its effective date
and (iii) such time as all of the Registrable Stock can be sold by
the Holders thereof without restriction under the Securities Act. In
connection with the Shelf Registration Statement, (i) the Company
shall furnish to the Holders, prior to the filing with the
Commission, a copy of the Shelf Registration Statement and shall use
its best efforts to reflect in such document when filed with the
Commission, such comments as the Holders may reasonably propose,
(ii) the Company shall make available all material customary for
reasonable due diligence examinations in connection with the Shelf
Registration Statement, (iii) the Company shall enter into such
agreements as are appropriate, customary and reasonably necessary in
connection with the Shelf Registration Statement, and (iv) the
Company shall make such representations and warranties to the
Holders of Registrable Stock (and any underwriters participating in
any offering and sale to be made pursuant to the Shelf Registration
Statement) as are customary in connection with the Shelf
Registration Statement.
-3-
<PAGE>
(b) During any consecutive 365-day period, the Company shall
be entitled to suspend the availability of the Shelf Registration
Statement for up to two 30 consecutive-day periods if the Company's
Board of Directors determines in its reasonable good faith judgment
that there is a valid business purpose for such suspension and
provides notice to the Holders that such determination was made by
the Company's Board; provided, however, that notwithstanding the
-------- -------
foregoing, if the Company shall furnish to the Holders a certificate
signed by the President of the Company stating that in the good
faith reasonable judgment of the Board of Directors of the Company
after consultation with outside counsel, the Company would be
required in order to comply with the Securities Act and the rules
and regulations promulgated thereunder to disclose in the Shelf
Registration Statement or in an amendment or supplement thereto
material non-public information relating to the Company which the
Company has a bona fide business purpose for preserving as
confidential or to make any disclosure in the Shelf Registration
Statement or in an amendment or supplement thereto that would
interfere with an existing or anticipated acquisition or financing
with respect to the Company, then the Company shall have the right
to suspend the availability of the Shelf Registration Statement
until the earliest of (i) the date upon which such material
information is disclosed to the public or ceases to be material,
(ii) the date upon which such acquisition or financing is
consummated or, if earlier, the date upon which any such
interference with such existing or anticipated acquisition or
financing would no longer exist, or (iii) forty-five (45) days after
the date of such written notice to the Holders; provided, however,
-------- -------
that the Company may not utilize this suspension right more than
once in any twelve-month period.
3. Demand Registration.
-------------------
(a) At any time after March 31, 2001, the Holder or Holders of
at least ten (10%) percent of all Registrable Stock then outstanding
(the "Initiating Holders") may, subject to the provisions of Section
3(b) hereof, by notice in writing to the Company request the Company
to register under the Securities Act all or any portion of shares of
Registrable Stock held by such Initiating Holder or Holders for sale
in the manner specified in such notice. Notwithstanding anything to
the contrary contained herein, the Company shall not be required to
seek to cause a Registration Statement to become effective pursuant
to this Section 3: (A) within a period of 90 days after the
effective date of a Registration Statement filed by the Company,
provided that the Company shall use commercially reasonably efforts
-------------
to cause a registration requested hereunder to be declared effective
promptly following such period if such request is made during such
period; or (B) if the Company shall furnish to the Initiating Holder
or Holders a certificate signed by the President of the Company
stating that in the good faith reasonable judgment of the Board of
Directors of the Company after consultation with outside counsel,
the filing of a Registration Statement would, at such time require
the disclosure of material non-public information relating to the
Company which, the Company has a bona fide business purpose for
preserving as confidential or interfere with an existing or
anticipated acquisition or financing with respect to the Company,
then
-4-
<PAGE>
the Company's obligations under this Section 3 shall be deferred
until the earliest of (i) the date upon which such material
information is disclosed to the public or ceases to be material,
(ii) the date upon which such acquisition or financing is
consummated or, if earlier, the date upon which any such
interference with such existing or anticipated acquisition or
financing would no longer exist, or (iii) forty-five (45) days after
the date of receipt of written request from such Initiating Holder
or Holders; provided, however, that the Company may not utilize this
-------- -------
deferral right more than once in any twelve-month period.
(b) Following receipt of any notice given under this Section 3
by the Initiating Holders, the Company shall immediately notify in
writing all Holders that such registration is to be effected and
shall use commercially reasonable efforts to register under the
Securities Act for public sale in accordance with the method of
disposition specified in such notice from requesting Holders, the
number of shares of Registrable Stock specified in such notice (and
in all notices received by the Company pursuant hereto). Holders,
other than the Initiating Holders, shall notify the Company of their
desire to participate in the registration within twenty (20) days
of the Company's notice to them. The Company shall use commercially
reasonable efforts to cause a Registration Statement with respect to
the Registrable Stock which Holders have requested be registered
pursuant to this Section 3 no later than forty-five (45) days after
receiving the notice pursuant to Section 3(a) of the Initiating
Holders. The Company shall designate the managing underwriter of
such offering, subject to the approval of the Holders of a majority
of the shares of Registrable Stock to be sold in such offering,
which approval shall not be unreasonably withheld or delayed. Each
Investor shall have the right to request the registration of
Registrable Stock pursuant to this Section 3 on three occasions
only, provided, however, that the Company's obligation to register
-------- -------
the Registrable Stock pursuant to this Section 3 in response to a
particular request shall be deemed satisfied only when a
Registration Statement or Registration Statements covering all
shares of Registrable Stock, specified in notices received as
aforesaid and which have not been withdrawn by the Holders thereof,
for sale in accordance with the method of disposition specified by
the Initiating Holders, shall have become effective. A registration
which does not become effective after the Company has filed a
Registration Statement with respect thereto solely by reason of the
refusal of the Initiating Holders to proceed shall be deemed to have
been effected by the Company at the request of such Initiating
Holders unless the registration was withdrawn at the request of the
Holders of a majority of the Registrable Stock to be sold in such
offering upon learning of a material adverse change in the
condition, business or prospects of the Company from that known to
such Holders at the time of their request that makes the proposed
offering unreasonable in the good faith judgment of a majority in
interest of such Holders.
(c) If the Registration Statement is to cover an underwritten
distribution and in the good faith judgment of the managing
underwriter of such public offering the inclusion of all of the
Registrable Stock requested for inclusion pursuant to this Section 3
would interfere with the successful marketing of a
-5-
<PAGE>
smaller number of shares to be offered, then the number of shares of
Registrable Stock to be included in the offering shall be reduced to
the required level with the participation in such offering to be
reduced pro rata among the Holders requesting such registration,
based upon the number of shares of Registrable Stock requested to be
included in such registration owned by such Holders. Except for
registration statements on Form S-4, S-8 or any successors thereto,
the Company will not file with the Commission any other registration
statement with respect to its Common Stock, whether for its own
account or that of other stockholders, from the date of receipt of a
notice from the Initiating Holders pursuant to this Section 3 until
the completion of the period of distribution of the registration
contemplated thereby.
4. Piggyback Registration. Each time the Company shall determine to
----------------------
file a Registration Statement in connection with the proposed offer and sale for
money of any of its securities by it or any of its security holders, the Company
will give written notice thereof to all Holders. Upon the written request of one
or more Holder(s) given within twenty (20) days after the giving of any such
notice by the Company, the Company will use commercially reasonable efforts to
cause all shares of Registrable Stock, the Holders of which have so requested
registration thereof, to be included in such Registration Statement, all to the
extent requisite to permit the sale or other disposition by the prospective
seller or sellers of the Registrable Stock to be so registered, provided that
--------
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 each such holder of
Registrable Stock and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable Stock
in connection with such registration (but not from its obligation to pay any and
all expenses in connection therewith as specified in Section 7 hereof), and (ii)
in the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Stock, for the same period as the delay in
registering such other securities. If the Registration Statement is to cover an
underwritten distribution, the Company shall cause the Registrable Stock
requested for inclusion pursuant to this Section 4 to be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters. If, in the good faith judgment of the managing
underwriter of such public offering, the inclusion of all of the Registrable
Stock requested for inclusion pursuant to this Section 4 would interfere with
the successful marketing of a smaller number of shares to be offered, then the
number of shares of Registrable Stock and other securities to be included in the
offering shall be reduced to the required level by first excluding securities of
any securityholder (other than the Company and the Holders) who proposes to
offer or sell securities in the registered offering, and then excluding on a pro
---
rata basis among the Company, and each Holder of Registrable Stock requesting
- ----
such registration based on the number of shares of Registrable Stock or other
securities the Company and each such Holder proposes to offer or sell in the
registered offering.
5. Registration on Form S-3.
------------------------
If at any time after the date hereof, (i) a Holder or Holders
request that the Company file a registration statement on Form S-3 or any
successor thereto for a public offering of all or any portion of the shares of
Registrable Stock held by such requesting Holder or
-6-
<PAGE>
Holders, and (ii) the Company is a registrant entitled to use Form S-3 or any
successor thereto to register such shares, then the Company shall use
commercially reasonably efforts to register under the Securities Act on Form S-3
or any successor thereto, for public sale in accordance with the method of
disposition specified in such notice, the number of shares of Registrable Stock
specified in such notice. Whenever the Company is required by this Section 5 to
use commercially reasonable efforts to effect the registration of Registrable
Stock, each of the procedures, requirements and limitations of Section 3 not
otherwise addressed in this Section 5 (including but not limited to the
requirement that the Company notify all Holders from whom notice has not been
received and provide them with the opportunity to participate in the offering
and the requirements of subparagraph (b) of Section 3 but not including the
limitations on the number of registrations the Company is obligated to make
under subparagraph (b) of Section 3) shall apply to such registration. There
shall be no limit on the number of registrations of Registrable Stock which the
Company shall be obligated to effect pursuant to this Section 5.
6. Registration Procedures. If and whenever the Company is required
-----------------------
by the provisions of Section 2, 3, 4 or 5 hereof to effect the registration of
shares of Registrable Stock under the Securities Act, the Company will, at its
expense, as expeditiously as possible:
(a) In accordance with the Securities Act and the rules and
regulations of the Commission, prepare and file with the Commission
a Registration Statement with respect to the Registrable Stock and
use its best efforts to cause such Registration Statement to become
effective as promptly as possible and to remain effective until the
Registrable Stock covered by such Registration Statement has been
sold, but (other than in the case of the Shelf Registration
Statement) for no longer than twelve (12) months subsequent to the
effective date of such Registration Statement, and prepare and file
with the Commission such amendments to such Registration Statement
and supplements to the prospectus contained therein as may be
necessary to keep such Registration Statement effective and such
Registration Statement and prospectus accurate and complete until
the Registrable Stock covered by such Registration Statement has
been sold, but (other than in the case of the Shelf Registration
Statement) for no longer than twelve (12) months subsequent to the
effective date of such Registration Statement;
(b) If the offering is to be underwritten in whole or in part,
enter into a written underwriting agreement in form and substance
reasonably satisfactory to the managing underwriter, if any, of the
public offering and the Holders participating in such offering;
(c) Furnish to the participating Holders and to the
underwriters such reasonable number of copies of the Registration
Statement, preliminary prospectus, final prospectus and such other
documents as such underwriters and participating Holders may
reasonably request in order to facilitate the public offering of
such securities;
(d) Use commercially reasonable efforts to register or qualify
the Registrable Stock covered by such Registration Statement under
such state
-7-
<PAGE>
securities or blue sky laws of such jurisdictions (i) as shall be
reasonably appropriate for the distribution of the Registrable Stock
covered by such Registration Statement or (ii) as such participating
Holders and underwriters may reasonably request within ten (10) days
following the original filing of such Registration Statement, except
that the Company shall not for any purpose be required to execute a
general consent to service of process, to subject itself to
taxation, or to qualify to do business as a foreign corporation in
any jurisdiction where it is not so qualified;
(e) Notify the Holders participating in such registration,
promptly after it shall receive notice thereof, of the date and time
when such Registration Statement and each post-effective amendment
thereto has become effective or a supplement to any prospectus
forming a part of such Registration Statement has been filed with
the Commission;
(f) Notify the Holders participating in such registration
promptly of any request by the Commission or any state securities
commission or agency for the amending or supplementing of such
Registration Statement or prospectus or for additional information;
(g) Prepare and file with the Commission, promptly upon the
request of any such participating Holders, any amendments or
supplements to such Registration Statement or prospectus which, in
the opinion of counsel representing the Company in such Registration
(and which counsel is reasonably acceptable to such participating
Holders), is required under the Securities Act or the rules and
regulations thereunder in connection with the distribution of the
Registrable Stock by such participating Holders, but (other than in
the case of the Shelf Registration Statement) for no longer than
twelve (12) months subsequent to the effective date of such
registration:
(h) Prepare and promptly file with the Commission, and
promptly notify such participating Holders of the filing of, such
amendments or supplements to such Registration Statement or
prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such
Registrable Stock is required to be delivered under the Securities
Act, any event has occurred as the result of which any such
prospectus or any other prospectus as then in effect would include
an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading;
(i) In case any of such participating Holders or any
underwriter for any such Holders is required to deliver a prospectus
at a time when the prospectus then in circulation is not in
compliance with the Securities Act or the rules and regulations of
the Commission, prepare promptly upon request of any such
participating Holders such amendments or supplements to such
Registration Statement and such prospectus as may be necessary in
order for such prospectus
-8-
<PAGE>
to comply with the requirements of the Securities Act and such rules
and regulations;
(j) Advise such participating Holders promptly after it shall
receive notice or obtain knowledge of the issuance of any stop order
by the Commission or any state securities commission or agency
suspending the effectiveness of such Registration Statement or the
initiation or threatening of any proceeding for that purpose and
promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such stop order should be
issued;
(k) At the request of any such participating Holder (i)
furnish to such Holder, if such registration includes an
underwritten public offering, at the closing provided for in the
underwriting agreement, copies of any opinion, dated such date, of
the counsel representing the Company for the purposes of such
registration, addressed to the underwriters, if any, covering such
matters with respect to the Registration Statement, the prospectus
and each amendment or supplement thereto, proceedings under state
and Federal securities laws, other matters relating to the Company,
the securities being registered and the offer and sale of such
securities as are customarily the subject of opinions of issuer's
counsel provided to underwriters in underwritten public offerings
or, if the offering is not underwritten, obtain such opinions of
counsel to the Company addressed to and reasonably satisfactory to
the Holders covering such matters as are customary in connection
with such offering and (ii) use commercially reasonable efforts to
furnish to such Holder letters dated each such effective date and
such closing date, from the independent certified public accountants
of the Company, addressed to the underwriters, if any, and to the
Holder or Holders making such request, stating that they are
independent certified public accountants within the meaning of the
Securities Act and dealing with such matters as the underwriters may
request, or, if the offering is not underwritten, that in the
opinion of such accountants the financial statements and other
financial data of the Company included in the Registration Statement
or the prospectus or any amendment or supplement thereto comply in
all material respects with the applicable accounting requirements of
the Securities Act, and additionally covering such other financial
matters, including information as to the period ending not more than
five (5) business day's prior to the date of such letter with
respect to the Registration Statement and prospectus, as such
requesting Holder or Holders may reasonably request;
(1) Apply for listing and use commercially reasonable efforts
to list the Registrable Stock being registered on any national
securities exchange on which a class of the Company's equity
securities is listed or, if the Company does not have a class of
equity securities listed on a national securities exchange, apply
for qualification and use its best efforts to qualify the
Registrable Stock being registered for inclusion on the automated
quotation system of the National Association of Securities Dealers,
Inc.
7. Expenses.
--------
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<PAGE>
(a) With respect to each registration effected pursuant to
Section 2, 3, 4 or 5 hereof, all fees, costs and expenses of and
incidental to such registration and the public offering in
connection therewith shall be borne by the Company; provided,
--------
however, that Holders and other holders of the Company's stock
-------
participating in any such registration shall bear their pro rata
share of any underwriting discounts and selling commissions, and;
provided, further, however, that notwithstanding the foregoing, the
-------- ------- -------
Company shall not be liable for expenses incurred in connection with
any registration that shall not have become effective due to a
revocation by the Holders of Registrable Stock except if such
registration was revoked or withdrawn by the Holders upon learning
of a material adverse change in the condition, business or
prospectus of the Company from that known to such Holders at the
time of their request for or to be included in such registration
that makes the proposed offering unreasonable in the good faith
judgment of such Holders.
(b) The fees, costs and expenses of registration to be borne
as provided in paragraph (a) above shall include, without
limitation, all registration, filing and NASD fees, printing
expenses, fees and disbursements of counsel and accountants for the
Company, fees and disbursements of counsel for the underwriter or
underwriters of such securities (if the Company and/or selling
security holders are otherwise required to bear such fees and
disbursements), all legal fees and disbursements and other expenses
of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be
registered or qualified, reasonable fees and disbursements of one
counsel for the selling Holders and the other holders of the
Company's stock participating in such registration and the premiums
and other costs of policies of insurance insuring the Company
against liability arising out of such public offering.
8. Indemnification and Contribution.
--------------------------------
(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each Holder whose shares of Registrable
Stock are included in a Registration Statement pursuant to the
provisions of this Agreement, each director, officer, partner,
employee and agent of such Holder, and any underwriter (as defined
in the Securities Act) for such Holder, and any Person who controls
such Holder or such underwriter within the meaning of the Securities
Act, and each of their successors, from and against, and will
reimburse such Holder, each director, officer, partner, employee and
agent of such Holder and each such underwriter, controlling Person
and successor with respect to, any and all claims, actions, demands,
losses, damages, liabilities, costs and expenses to which such
Holder, such director, officer, partner, employee or agent of such
Holder or any such underwriter, controlling Person or successor may
become subject under the Securities Act or otherwise, insofar as
such claims, actions, demands, losses, damages, liabilities, costs
or expenses arise out of or are based upon any untrue statement or
allegedly untrue statement of any material fact contained in such
Registration Statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon
the omission or alleged
-10-
<PAGE>
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading
or arise out of any violation by the Company of any rule or
regulation under the Securities Act applicable to the Company and
relating to action or inaction required of the Company in connection
with such registration; provided, however, that the Company will not
-------- -------
be liable in any such case to the extent that any such claim,
action, demand, loss, damage, liability, cost or expense arises out
of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in reliance upon and in
conformity with information furnished by or on behalf of any such
Holder, such director, officer, partner, employee or agent of such
Holder, such underwriter, controlling Person or successor in writing
specifically for use in the preparation thereof, and provided,
--------
further, that this indemnity shall not be deemed to relieve any
-------
underwriter of any of its due diligence obligations; and provided
--------
further, that if any claim, action, demand, loss, damage, liability,
-------
cost or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission
contained in any preliminary prospectus which did not appear in the
final prospectus and if the Holder delivered a copy of the
preliminary prospectus to the person alleging damage and failed to
deliver a copy of the final prospectus to such persons, the Company
shall not be liable with respect to the claims of such person.
(b) Each Holder of shares of Registrable Stock which are
included in a registration pursuant to the provisions of this
Agreement will, severally and not jointly, indemnify and hold
harmless the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such
registration, each person who controls the Company or such
underwriter within the meaning of the Securities Act, and each other
Holder of shares of Registrable Stock which are included in the
registration, each of the officers, directors, partners, employees
and agents of each such other Holder and each person controlling
such other Holder, from and against, and will reimburse such parties
with respect to, any and all losses, damages, liabilities, costs or
expenses to which such parties may become subject under the
Securities Act or otherwise, to the extent that any such loss,
damage, liability, cost or expense arises out of or is based upon
any untrue or alleged untrue statement of any material fact
contained therein or any amendment or supplement thereto, or arises
out of or is based upon 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, in each case to the
extent, but only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in
reliance upon and in conformity with written information furnished
by or on behalf of such Holder for use in the preparation thereof,
provided that the liability of each Holder hereunder shall be
limited to the proportion of any such loss, claim, damage, liability
or expense which is equal to the proportion that the public offering
price of the shares sold by such Holder under such Registration
Statement bears to the total public offering price of all securities
sold thereunder, but not in any event to exceed the net proceeds
received by such Holder from the sale of shares of Registrable Stock
covered by a Registration Statement; and provided, further, that
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<PAGE>
this indemnity shall not be deemed to relieve any underwriter of any
of its due diligence obligations.
(c) Promptly after receipt by a party to be indemnified
pursuant to the provisions of paragraph (a) or (b) of this Section 8
(an "indemnified party") of actual knowledge or notice of the
commencement of any action involving the subject matter of the
foregoing indemnity provisions, such indemnified party will, if a
claim thereof is to be made against the indemnifying party pursuant
to the provisions of paragraph (a) or (b), notify the indemnifying
party of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 8
and shall not relieve the indemnifying party from liability under
this Section 8 unless such indemnifying party is prejudiced by such
omission. In case such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall have the right to participate
in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
pursuant to the provisions of such paragraphs (a) and (b) for any
legal or other expense subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding the foregoing, an
indemnified party shall have the right to retain its own counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or
potential differing interests, as reasonably determined by either
party, between such indemnified party and any other party
represented by such counsel in such proceeding. No indemnifying
party shall be liable to an indemnified party for any settlement of
any action or claim without the consent of the indemnifying party;
no indemnifying party may unreasonably withhold its consent to any
such settlement. No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect
to such claim or litigation.
(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either
(i) any Holder exercising rights under this Agreement, or any
controlling Person of any such Holder, makes a claim for
indemnification pursuant to this Section 8 but it is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this
Section 8 provides for the indemnification in such case or (ii)
contribution under the Securities Act may be required on the part of
any such selling Holder or any such controlling Person in
circumstances for
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<PAGE>
which indemnification was provided under this Section 8; then, and
in each case, the Company and each such Holder, will contribute to
the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion
so that such Holder is responsible for the portion represented by
the percentage that the public offering price of its Registrable
Stock offered by the Registration Statement bears to the public
price of all securities offered by such Registration Statement, and
the Company is responsible for the remaining portion; provided,
--------
however, that, in any such case, (A) no Person or entity guilty of
-------
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any Person
or entity was not guilty of such fraudulent misrepresentation and
(B) no Holder will be required to contribute any amount in excess of
the net proceeds of such holder of such Registrable Stock offered by
it pursuant to such Registration Statement.
9. Reporting Requirements Under Securities Exchange Act of 1934. The
------------------------------------------------------------
Company shall keep effective the registration of its Common Stock under Section
12 of the Exchange Act and shall timely file such information, documents and
reports as the Commission may require or prescribe under Section 13 or 15(d) of
the Exchange Act. The Company shall forthwith upon request furnish any Holder
(i) a written statement by the Company that it has complied with such reporting
requirements, (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents filed by the Company with
the Commission as such Holder may reasonably request in availing itself of an
exemption for the sale of Registrable Stock without registration under the
Securities Act. The Company acknowledges and agrees that the purposes of the
requirements contained in this Section 9 are (a) to enable any such Holder to
comply with the current public information requirement contained in Paragraph
(c) of Rule 144 under the Securities Act should such Holder ever wish to dispose
of any of the securities of the Company acquired by it without registration
under the Securities Act in reliance upon Rule 144 (or any other similar or
successor exemptive provision), and (b) to qualify the Company for the use of
Registration Statements on Form S-3. In addition, the Company shall take such
other measures and file such other information, documents and reports, as shall
hereafter be required by the Commission as a condition to the availability of
Rule 144 under the Securities Act (or any similar or successor exemptive
provision hereafter in effect) and the use of Form S-3. The Company also
covenants to use its best efforts, to the extent that it is reasonably within
its power to do so, to qualify for the use of Form S-3. The Company agrees to
use its best efforts to facilitate and expedite transfers of Registrable Stock
pursuant to Rule 144 under the Securities Act (or any similar or successor
exemptive provision hereafter in effect), which efforts shall include timely
notice to its transfer agent to expedite such transfers of Registrable Stock.
10. Stockholder Information. The Company may require each Holder of
-----------------------
Registrable Stock as to which any registration is to be effected pursuant to
this Agreement to furnish the Company in a timely manner such information with
respect to such Holder and the distribution of such Registrable Stock as the
Company may from time to time reasonably request in writing and as shall be
required by law or by the Commission in connection therewith.
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<PAGE>
11. Company Lock-Up. The Company agrees, if so required by the
---------------
managing underwriter with respect to any underwritten registration hereunder,
not to sell, make any short sale of, loan, grant any option for the purchase of
(other) than pursuant to employee benefit plans), effect any public sale or
distribution of or otherwise dispose of its equity securities or securities
convertible into or exchangeable or exercisable for any such securities during
the 30 days prior to and the 90 days after any underwritten registration
pursuant to Section 2, 3, 4 or 5 hereof has become effective, except as part of
such underwritten registration and except pursuant to registrations on Form S-4
or S-8.
12. Notices. Any notice required or permitted to be given hereunder
-------
shall be in writing and shall be deemed to be properly given when sent by
registered or certified mail, return receipt requested, by Federal Express, DHL
or other guaranteed overnight delivery service or by facsimile transmission,
addressed as follows:
If to the Company: Coho Energy, Inc.
c/o Coho Resources, Inc.
14785 Preston Road, Suite 860
Dallas Texas 75240
Attn.: President
Telephone: (972) 774-8300
Telecopier: (972) 991-2257
With copies to: Fulbright & Jaworski, L.L.P.
2200 Ross Avenue
Suite 2800
Dallas, Texas 75201
Attn.: Harva R. Dockery, Esq.
Telephone: (214) 855-8000
Telecopier: (214) 855-8200
If to any Investor: To the address of such Investor set forth on
The signature pages hereto
With a copy to: Anderson Kill & Olick, P.C.
1251 Avenue of the Americas
New York, NY 10020-1182
Attn: J. Andrew Rahl, Jr.
Telephone: (972) 278-1000
Telecopier: (212) 278-1733
and if to any other Holder at such Holder's address for notice as set forth in
the register maintained by the Company, or, as to any of the foregoing, to such
other address as any such party may give the others notice of pursuant to this
Section, provided that a change of address shall only be effective upon receipt.
All notices, requests, consents and other communications hereunder shall be
deemed to have been received (i) if by hand, at the time of delivery thereof to
the receiving party at the address of
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<PAGE>
such party set forth above or as so designated, (ii) if made by telecopy or
facsimile transmission, at the time that receipt thereof has been acknowledged
by electronic confirmation or otherwise, (iii) if sent by overnight courier, on
the next business day following the day such notice is delivered to the courier
service, or (iv) if sent by registered or certified mail, on the fifth business
day following the day such mailing is made.
13. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the substantive laws of the State of Illinois
(without regard to conflict of laws provisions).
14. Waivers; Amendments. No waiver of any right hereunder by any
-------------------
party shall operate as a waiver of any other right, or of the same right with
respect to any subsequent occasion for its exercise, or of any right to damages.
No waiver by any party of any breach of this Agreement shall be held to
constitute a waiver of any other breach or a continuation of the same breach.
All remedies provided by this Agreement are in addition to all other remedies
provided by law. The provisions of this Agreement may not be amended except by a
writing executed by the Company and the Holders of at least a majority of the
then outstanding Registrable Stock and the securities convertible into,
exchangeable for or exercisable for Registrable Stock (calculated on an as
converted, exchanged or exercised basis).
15. Other Registration Rights. So long as any of the registration
-------------------------
rights under this Agreement remain in effect, the Company shall not grant to any
third party any registration rights for any securities of the Company, except
that the Company may grant piggyback registration rights to a third party
related to any registration statement covered by Section 4 hereof provided that
the rights of such third party shall be subject to the rights of the Holders
pursuant to the last sentence of Section 4 hereof.
16. Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the respective legal representatives, successors
and assigns of the parties hereto; provided, however, that any person or entity
to which Registrable Shares are proposed to be transferred shall provide prompt
written notice of such proposed transfer to the Company.
17. 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.
18. Prior Understandings and Agreements. This Agreement represents
-----------------------------------
the complete agreement of the parties with respect to the transactions
contemplated hereby and supersedes all prior agreements and understandings.
19. Headings. Headings in this Agreement are included for reference
--------
only and shall have no effect upon the construction or interpretation of any
part of this Agreement.
20. Severability. If any provision of this Agreement shall be held
------------
to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
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