<PAGE> 1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
COHO ENERGY, INC.
(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
19248110
(CUSIP Number)
THOMAS O. HICKS
200 CRESCENT COURT
SUITE 1600
DALLAS, TEXAS 75201
(214) 740-7300
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
Copy to:
MICHAEL D. WORTLEY
VINSON & ELKINS L.L.P.
3700 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 220-7732
DECEMBER 18, 1998
(Date of Event which Requires Filing of this Statement on Schedule 13D/A)
- --------------------------------------------------------------------------------
<PAGE> 2
CUSIP NO. 19248110 Schedule 13D/A Page 2 of 16
- --------------------------------------------------------------------------------
1 Name of Reporting Person, S.S. or I.R.S. Identification No. of
Above Person
Energy Investment Partnership No. 1
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
WC
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Texas
- --------------------------------------------------------------------------------
Number of Shares 7 Sole Voting Power
0
- --------------------------------------------------------------------------------
Beneficially 8 Shared Voting Power
Owned 2,182,084
- --------------------------------------------------------------------------------
by Each Reporting 9 Sole Dispositive Power
0
- --------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power
2,182,084
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,182,084
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
8.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
PN
- --------------------------------------------------------------------------------
<PAGE> 3
CUSIP NO. 19248110 Schedule 13D/A Page 3 of 16
- --------------------------------------------------------------------------------
1 Name of Reporting Person, S.S. or I.R.S. Identification No. of
Above Person
Thomas O. Hicks
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
PF
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Texas
- --------------------------------------------------------------------------------
Number of Shares 7 Sole Voting Power
0
- --------------------------------------------------------------------------------
Beneficially 8 Shared Voting Power
Owned 2,182,084
- --------------------------------------------------------------------------------
by Each Reporting 9 Sole Dispositive Power
0
- --------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power
2,182,084
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,182,084
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
8.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------
<PAGE> 4
CUSIP NO. 19248110 Schedule 13D/A Page 4 of 16
- --------------------------------------------------------------------------------
1 Name of Reporting Person, S.S. or I.R.S. Identification No. of
Above Person
John R. Muse
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
PF
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Texas
- --------------------------------------------------------------------------------
Number of Shares 7 Sole Voting Power
0
- --------------------------------------------------------------------------------
Beneficially 8 Shared Voting Power
Owned 2,182,084
- --------------------------------------------------------------------------------
by Each Reporting 9 Sole Dispositive Power
0
- --------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power
2,182,084
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,182,084
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
8.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------
<PAGE> 5
CUSIP NO. 19248110 Schedule 13D/A Page 5 of 16
- --------------------------------------------------------------------------------
1 Name of Reporting Person, S.S. or I.R.S. Identification No. of
Above Person
Charles W. Tate
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
PF
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Texas
- --------------------------------------------------------------------------------
Number of Shares 7 Sole Voting Power
0
- --------------------------------------------------------------------------------
Beneficially 8 Shared Voting Power
Owned 2,182,084
- --------------------------------------------------------------------------------
by Each Reporting 9 Sole Dispositive Power
0
- --------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power
2,182,084
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,182,084
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
8.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------
<PAGE> 6
CUSIP NO. 19248110 Schedule 13D/A Page 6 of 16
- --------------------------------------------------------------------------------
1 Name of Reporting Person, S.S. or I.R.S. Identification No. of
Above Person
Jack D. Furst
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
PF
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Texas
- --------------------------------------------------------------------------------
Number of Shares 7 Sole Voting Power
0
- --------------------------------------------------------------------------------
Beneficially 8 Shared Voting Power
Owned 2,182,084
- --------------------------------------------------------------------------------
by Each Reporting 9 Sole Dispositive Power
0
- --------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power
2,182,084
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,182,084
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
8.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------
<PAGE> 7
CUSIP NO. 19248110 Schedule 13D/A Page 7 of 16
- --------------------------------------------------------------------------------
1 Name of Reporting Person, S.S. or I.R.S. Identification No. of
Above Person
Lawrence D. Stuart, Jr.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
PF
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Texas
- --------------------------------------------------------------------------------
Number of Shares 7 Sole Voting Power
0
- --------------------------------------------------------------------------------
Beneficially 8 Shared Voting Power
Owned 2,182,084
- --------------------------------------------------------------------------------
by Each Reporting 9 Sole Dispositive Power
0
- --------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power
2,182,084
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,182,084
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
8.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------
<PAGE> 8
CUSIP NO. 19248110 Schedule 13D/A Page 8 of 16
- --------------------------------------------------------------------------------
1 Name of Reporting Person, S.S. or I.R.S. Identification No. of
Above Person
Michael J. Levitt
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
PF
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Texas
- --------------------------------------------------------------------------------
Number of Shares 7 Sole Voting Power
0
- --------------------------------------------------------------------------------
Beneficially 8 Shared Voting Power
Owned 2,182,084
- --------------------------------------------------------------------------------
by Each Reporting 9 Sole Dispositive Power
0
- --------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power
2,182,084
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,182,084
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
8.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------
<PAGE> 9
CUSIP NO. 19248110 Schedule 13D/A Page 9 of 16
- --------------------------------------------------------------------------------
1 Name of Reporting Person, S.S. or I.R.S. Identification No. of
Above Person
Dan H. Blanks
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
PF
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Texas
- --------------------------------------------------------------------------------
Number of Shares 7 Sole Voting Power
0
- --------------------------------------------------------------------------------
Beneficially 8 Shared Voting Power
Owned 2,182,084
- --------------------------------------------------------------------------------
by Each Reporting 9 Sole Dispositive Power
0
- --------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power
2,182,084
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,182,084
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
8.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------
<PAGE> 10
CUSIP NO. 19248110 Schedule 13D/A Page 10 of 16
- --------------------------------------------------------------------------------
1 Name of Reporting Person, S.S. or I.R.S. Identification No. of
Above Person
David B. Deniger
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
PF
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Texas
- --------------------------------------------------------------------------------
Number of Shares 7 Sole Voting Power
0
- --------------------------------------------------------------------------------
Beneficially 8 Shared Voting Power
Owned 2,182,084
- --------------------------------------------------------------------------------
by Each Reporting 9 Sole Dispositive Power
0
- --------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power
2,182,084
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,182,084
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
8.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------
<PAGE> 11
Schedule 13D/A Page 11 of 16
This Amendment No. 2 to Schedule 13D is being filed by Energy
Investment Partnership No. 1, a Texas general partnership (the "Purchaser"),
Thomas O. Hicks, a United States citizen ("Hicks"), John R. Muse, a United
States citizen ("Muse"), Charles W. Tate, a United States citizen ("Tate"), Jack
D. Furst, a United States citizen ("Furst"), Lawrence D. Stuart, Jr., a United
States citizen ("Stuart"), Michael J. Levitt, a United States citizen
("Levitt"), Dan H. Blanks, a United States citizen ("Blanks"), and David B.
Deniger, a United States citizen ("Deniger"). The Purchaser, Hicks, Muse, Tate,
Furst, Stuart, Levitt, Blanks and Deniger are collectively referred to herein as
the "Reporting Persons." This Amendment to Schedule 13D amends and supplements
Items 3, 4 and 6 contained in the Reporting Persons' original Schedule 13D dated
May 18, 1998, as amended by Amendment No. 1 to Schedule 13D dated August 21,
1998. Items 1, 2, 5 and 7 of the original Schedule 13D, as previously amended,
remain unchanged. Each Reporting Person disclaims responsibility for the
completeness and accuracy of the information contained in this statement
concerning the other Reporting Persons.
ITEM 3. SOURCES AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Purchaser utilized $15,530,802 of its working capital to purchase
the 2,182,084 shares of common stock, par value $0.01 per share (the "Common
Stock"), beneficially owned by the Purchaser (the "Shares") and pay related fees
and expenses. This working capital was provided by capital contributions from
Hicks, Muse, Tate, Furst, Stuart, Levitt, Blanks and Deniger. Each of Hicks,
Muse, Tate, Furst, Stuart, Levitt, Blanks and Deniger obtained the funds
contributed to the Purchaser from personal funds.
On August 21, 1998, HM 4 Coho, L.P., a Texas limited partnership (the
"Partnership"), and the Company entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement") which provided that the Partnership would purchase
(the "Stock Purchase") 41,666,666 shares of Common Stock (the "Additional
Shares") for $249,999,996 by wire transfer of immediately available funds (the
"Purchase Price"). Originally, the Stock Purchase was structured such that the
Partnership could purchase the Additional Shares in two allotments in separate
closings. On November 4, 1998, the Stock Purchase Agreement was amended and
restated, among other things, to effect the Stock Purchase through a single
closing (as so amended and restated, the "Amended and Restated Stock Purchase
Agreement"). On December 18, 1998, the Partnership terminated the Amended and
Restated Stock Purchase Agreement, subject to the Company's right to cure its
breach of certain representations and warranties caused by the occurrence of a
Material Adverse Effect as defined in the Amended and Restated Stock Purchase
Agreement. Hicks, Muse Fund IV, LLC, a Texas limited liability company (the
"LLC"), of which Hicks is the sole member, is the general partner of the general
partner of the general partner of the Partnership. Because Hicks is the sole
member of the LLC, Hicks will also be considered to be a beneficial owner of the
Additional Shares if the Stock Purchase is consummated. The Partnership will
utilize its working capital to pay the Purchase Price and to pay related fees
and expenses if the Stock Purchase is consummated. The Partnership expects to
obtain its working capital funds from the capital contributions of its partners.
Upon termination of the Amended and Restated Stock Purchase Agreement,
the Partnership began negotiations with the Company to purchase (the
"Alternative Stock Purchase") 62,500,000 shares of Common Stock for $4.00 per
share, the consummation of which would be subject to, among other things, the
effectiveness of certain amendments to the Company's credit agreement and
indenture.
ITEM 4. PURPOSE OF THE TRANSACTION.
The purpose of the Stock Purchase(or, if the Stock Purchase is not
consummated and the Partnership enters into an agreement with the Company to
purchase 62,500,000 shares of Common Stock for $4.00 per share, the Alternative
Stock Purchase) is to implement the Partnership's plan to obtain a majority
interest in the Company for investment purposes.
(a) Except as described herein, neither the Partnership nor
the Reporting Persons have any current plans to purchase additional shares of
Common Stock in open market or private transactions from shareholders of the
Company or to purchase additional shares of Common Stock or Common Stock
equivalents directly from the Company. Any change with respect to these plans
shall be reported promptly in an amendment to the Purchaser's Schedule 13D.
(b), (c), (e), (f), (g), (h), (i) and (j) Neither the
Partnership nor the Reporting Persons have current plans or proposals which
relate to or would result in (i) an extraordinary corporate transaction, such as
a merger, reorganization or liquidation, involving the Company or any of its
subsidiaries, (ii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries, (iii) any material change in the present
capitalization or dividend policy of the Company, (iv) any other material change
to the Company's business or corporate structure, (v) subject to the matters
discussed in paragraphs (d) and (e) of this Item 4, any changes in the Company's
articles of incorporation or bylaws, or other actions which may impede the
acquisition or control of the Company by any person, (vi)
<PAGE> 12
Schedule 13D/A Page 12 of 16
the Common Stock ceasing to be authorized to be quoted on the NASDAQ National
Market System, (vii) the Common Stock becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934
(the "Exchange Act"), or (viii) any action similar to any of the foregoing. Any
change with respect to these plans shall be promptly reported in an amendment to
the Purchaser's Schedule 13D.
(d) On May 12, 1998, the Company and the Purchaser entered
into a Shareholder Agreement (the "Shareholder Agreement") which provided for
(i) certain demand and piggyback registration rights with respect to the shares
of Common Stock owned at such time or in the future by the Purchaser or its
transferees who become a party to the Shareholder Agreement and (ii) the
appointment or election and annual nomination to the Board of Directors of the
Company and the Board's Compensation Committee and Audit Committee and any
Executive Committee of two designees of the Purchaser (the "Purchaser
Designees") and any of its transferees who become a party to the Shareholder
Agreement, subject to certain Common Stock ownership requirements. Pursuant to
the Shareholder Agreement, the Purchaser Designees, Muse and Stuart, were added
to the Board of Directors on May 12, 1998, to serve until the next annual
meeting of shareholders of the Company. There are currently seven directors
serving on the Company's Board of Directors, including the Purchaser's
Designees.
Pursuant to the Amended and Restated Stock Purchase Agreement the
Company and the Purchaser agreed to enter into an Amended and Restated
Shareholder Agreement (the "Amended and Restated Shareholder Agreement") upon
the closing of the purchase and sale of the Additional Shares. The Amended and
Restated Shareholder Agreement would provide for (i) certain demand and
piggyback registration rights with respect to the Additional Shares and any
other shares of Common Stock owned in the future by the Purchaser and the
Partnership and their transferees who become a party to the Amended and
Restated Shareholder Agreement (each, a "Holder") (see Item 6) and (ii) upon
the purchase and sale of the Additional Shares, the increase in the size of the
Board of Directors of the Company to nine members and, in addition to the
existing Purchaser Designees, the appointment or election and annual nomination
to the Board of Directors of the Company two designees of the Partnership or
the Partnership's transferees who become a party to the Amended and Restated
Shareholder Agreement (the "Partnership Designees," together with the Purchaser
Designees the "Holder Designees"). The Company would appoint a Partnership
Designee and a Purchaser Designee serving on the Board of Directors of the
Company to be members of the Board of Directors' Compensation Committee and
Audit Committee, and, if established, the Executive Committee of the Board of
Directors. The Purchaser's right to designate directors of the Company would
continue as long as the Purchaser and its affiliates own at least 1,000,000
shares of Common Stock. The right of the Partnership to designate directors of
the Company would continue as long as the Partnership and its affiliates or any
single transferee of the Partnership (and affiliates thereof) who becomes a
party to the Amended and Restated Shareholder Agreement own at least 5% of the
of the outstanding shares of Common Stock. In addition, if the Purchaser or any
single transferee or group of related transferees of the Purchaser ceases to
own at least 1,000,000 shares of Common Stock and the Partnership and its
affiliates or any single transferee or group of related transferees of the
Partnership or its affiliates continue to own at least 5% of the outstanding
shares of Common Stock, the Purchaser would cease to have the right to
designate any Holder Designees and the Partnership would have the right to
designate all four Holder Designees, unless or until such time as the
Purchaser's right to designate directors of the Company has terminated as
provided in the preceding sentence. To the extent that the Company's proxy
statement for any annual meeting of shareholders of the Company includes a
recommendation regarding the election of any other nominees to the Company's
Board of Directors, the Company would include a recommendation of its Board of
Directors that shareholders of the Company also vote in favor of the Holder
Designees.
If the Stock Purchase is not consummated and the Partnership enters
into an agreement with the Company to purchase 62,500,000 shares of Common Stock
for $4.00 per share, the Company and the Purchaser would likely enter into an
amended and restated shareholder agreement with terms substantially similar to
the terms described above.
<PAGE> 13
Schedule 13D/A Page 13 of 16
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The following summaries of the Amended and Restated Stock Purchase
Agreement and the Financial Advisory Agreement are qualified in their entirety
by reference to such agreements, copies of which are attached hereto as
Exhibits 10.2 and 10.3, respectively, and incorporated herein by reference.
Amended and Restated Stock Purchase Agreement. On August 21, 1998,
the Partnership and the Company entered into the Stock Purchase Agreement (see
Item 4) pursuant to which the Partnership agreed to purchase the Additional
Shares in two allotments for the Purchase Price, subject to certain terms and
conditions. On November 4, 1998, the Stock Purchase Agreement was amended and
restated, to, among other things, effect the Stock Purchase through a single
closing. The Partnership terminated the Amended and Restated Stock Purchase
Agreement on December 18, 1998, subject to the Company's right to cure its
breach of certain representations and warranties caused by the occurrence of a
Material Adverse Effect as defined in the Amended and Restated Stock Purchase
Agreement.
Amended and Restated Shareholder Agreement. Pursuant to the terms of
the Amended and Restated Stock Purchase Agreement, the Purchaser and the
Company agreed to enter into the Amended and Restated Shareholder Agreement
(see Item 4) upon the closing. In addition to the provisions of the Amended and
Restated Shareholder Agreement described in Item 4, the Amended and Restated
Shareholder Agreement would provide each Holder with unlimited demand
registrations (in firm commitment underwritten offerings) and unlimited
piggyback registration rights with respect to the Additional Shares and all
shares of Common Stock acquired by each Holder in the future, subject to
certain requirements. With certain exceptions, the Company would pay all costs
of such registration except for underwriting discounts and commissions and
transfer taxes. The Company would have certain rights to delay the filing of a
registration statement, and parties to other registration rights agreements
with the Company would have a right, under certain circumstances, to sell
shares of Common Stock in connection with registrations involving shares owned
by each Holder as long as the managing underwriter or underwriters would advise
each Holder in writing that the inclusion of such securities would not
materially and adversely affect the price or success of the offering.
Each Holder under the Amended and Restated Shareholder Agreement would
agree therein until May 11, 2000, not to (i) deposit any shares of Common Stock
in a voting trust or grant any proxy with respect to any shares of Common Stock
to any person not designated by the Company (other than another Holder or any
affiliate or partner of a Holder) or subject any shares of Common Stock to any
arrangement or agreement with respect to the voting of such shares of Common
Stock, (ii) act with one or more persons (other than another Holder or any
affiliate or partner of a Holder) as a partnership, limited partnership,
syndicate or "group" (as such term is used in Section 13(d)(3) of the Exchange
Act) for the purpose of acquiring, holding, voting or disposing of shares of
Common Stock, (iii) directly or indirectly, sell or transfer, or offer to sell
or transfer, (A) shares of Common Stock that represent more than 10% of the
fully diluted common equity of the Company to any single person or any
"Affiliated Group" (with respect to any person, such person and each Affiliate
Associate (within the meaning of Rule 12b-2 promulgated under the Exchange Act)
of such person and each other person with whom such person is acting "as a
partnership, limited partnership, syndicate, or other group for the purpose of
acquiring, holding or disposing of" shares (within the meaning of Section
13(d)(3) of the Exchange Act)) or (B) shares of Common Stock that represent more
than 5% of the outstanding Common Stock of the Company to any holder of 10% of
the outstanding shares of Common Stock. The foregoing prohibition would be
subject to certain exceptions.
Financial Advisory Agreement. On August 21, 1998, the Company and
Hicks, Muse & Co. Partners, L.P., a Texas limited partnership ("HMCo"), entered
into a Financial Advisory Agreement (the "Financial Advisory Agreement"). On
November 4, 1998, the Financial Advisory Agreement was amended and restated,
to, among other things, effect the Stock Purchase through a single closing (as
so amended and restated, the "Amended and Restated Financial Advisory
Agreement"). HM Partners, Inc., in which Hicks owns a majority equity interest,
is the general partner of HMCo and Hicks, Muse, Tate, Furst, Stuart, Levitt,
Blanks and Deniger are HMCo's limited partners. Pursuant to the Amended and
Restated Financial Advisory Agreement, HMCo has been engaged to render
financial advisory services to the Company and its subsidiaries in connection
with the negotiation of the Partnership's purchase of the Additional Shares and
also to render financial advisory, investment banking and other similar
services to the Company with respect to any future proposals for (i) the
acquisition by any person or group of beneficial ownership of (A) a majority of
the combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors, or (B) a majority of
the Company's outstanding capital stock, (ii) a reorganization,
recapitalization, merger, consolidation or similar business combination or
transaction or sale or other disposition (whether in a single transaction or
series of related transactions) of all or substantially all of the assets of
the Company and its subsidiaries taken as a whole (unless the holders of the
outstanding securities of the Company entitled to vote generally in the
election of directors prior to such transaction continue to own at least a
majority of the securities entitled to vote generally in the election of
directors of the entity resulting from such transaction upon the completion of
such transaction), (iii) the sale of oil and gas properties of the Company or
its
<PAGE> 14
Schedule 13D/A Page 14 of 16
subsidiaries involving consideration of $100 million or more, (iv) any
acquisition by the Company or its subsidiaries involving consideration of $100
million or more of (A) a majority of the voting power of the then outstanding
voting securities of any corporation entitled to voting generally in the
election of directors or (B) a majority of the ownership interests of an entity
other than a corporation (whether by merger, tender offer, exchange offer or
similar extraordinary transaction), or (v) any acquisition by the Company or its
subsidiaries of oil and gas properties or other assets involving consideration
of $100 million or more (collectively, "Additional Transactions"). The term of
the Amended and Restated Financial Advisory Agreement will continue until the
earlier to occur of November 4, 2008 or the date on which the Partnership and
its affiliates cease to own beneficially, directly or indirectly, at least 5% of
the outstanding equity securities of the Company or its successors.
Pursuant to the terms of the Amended and Restated Financial Advisory
Agreement, the Company paid HMCo a transaction fee of $1,250,000 concurrently
with the execution of the Stock Purchase Agreement on August 21, 1998. If the
Stock Purchase is consummated, the Company will pay to HMCo a transaction fee in
the amount of $8,750,000 on the date of the closing. Under the Financial
Advisory Agreement, HMCo is entitled to receive additional compensation at then
current market rates for financial advisory, investment banking and other
similar services rendered to the Company in connection with Additional
Transactions if the Company engages a financial advisor in connection with such
transactions.
<PAGE> 15
Schedule 13D/A Page 15 of 16
SIGNATURES
After due inquiry and to the best of my knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: December 22, 1998 ENERGY INVESTMENT PARTNERSHIP NO. 1
By: /s/ David W. Knickel
--------------------------------------
David W. Knickel
Attorney-in-Fact
Dated: December 22, 1998 THOMAS O. HICKS
/s/ David W. Knickel
-----------------------------------------
By: David W. Knickel, Attorney-in-Fact
Dated: December 22, 1998 JOHN R. MUSE
/s/ David W. Knickel
-----------------------------------------
By: David W. Knickel, Attorney-in-Fact
Dated: December 22, 1998 CHARLES W. TATE
/s/ David W. Knickel
-----------------------------------------
By: David W. Knickel, Attorney-in-Fact
Dated: December 22, 1998 JACK D. FURST
/s/ David W. Knickel
-----------------------------------------
By: David W. Knickel, Attorney-in-Fact
<PAGE> 16
Schedule 13D/A Page 16 of 16
Dated: December 22, 1998 LAWRENCE D. STUART, JR.
/s/ David W. Knickel
-----------------------------------------
By: David W. Knickel, Attorney-in-Fact
Dated: December 22, 1998 MICHAEL J. LEVITT
/s/ David W. Knickel
-----------------------------------------
By: David W. Knickel, Attorney-in-Fact
Dated: December 22, 1998 DAN H. BLANKS
/s/ David W. Knickel
-----------------------------------------
By: David W. Knickel, Attorney-in-Fact
Dated: December 22, 1998 DAVID B. DENIGER
/s/ David W. Knickel
-----------------------------------------
By: David W. Knickel, Attorney-in-Fact
