-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DTvBRiPuwzxus0S5hXk8ubXDvKLD8heXkq9RqJXVpVmkXGN1yC20thAgJqEBsML0 Dw9R0b2xeyk4AsnbC0DNUg== 0000950129-01-504671.txt : 20020413 0000950129-01-504671.hdr.sgml : 20020413 ACCESSION NUMBER: 0000950129-01-504671 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20011226 GROUP MEMBERS: ENCAP ENERGY ACQUISITION III-B INC GROUP MEMBERS: ENCAP ENERGY CAPITAL FUND III LP GROUP MEMBERS: ENCAP ENERGY CAPITAL FUND III-B LP GROUP MEMBERS: ENCAP INVESTMENTS LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: 3TEC ENERGY CORP CENTRAL INDEX KEY: 0000903267 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 631081013 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-48873 FILM NUMBER: 1822988 BUSINESS ADDRESS: STREET 1: 700 MILAM STREET STREET 2: SUITE 1100 CITY: HOUSTON STATE: TX ZIP: 77002-2 BUSINESS PHONE: 7138217100 FORMER COMPANY: FORMER CONFORMED NAME: MIDDLE BAY OIL CO INC DATE OF NAME CHANGE: 19930504 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ENCAP ENERGY CAPITAL FUND III LP CENTRAL INDEX KEY: 0001086967 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 760545517 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1100 LOUISIANA STREET 2: SUITE 3150 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7136596100 MAIL ADDRESS: STREET 1: 1100 LOUISIANA STREET 2: SUITE 3150 CITY: HOUSTON STATE: TX ZIP: 77002 SC 13D/A 1 h93139a3sc13da.txt ENCAO ENERGY CAPITAL FUND III LP F/3TEC ENERGY SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A (AMENDMENT NO. 3) UNDER THE SECURITIES EXCHANGE ACT OF 1934* 3TEC ENERGY CORPORATION (NAME OF ISSUER) COMMON STOCK, PAR VALUE $.02 PER SHARE (TITLE OF CLASS OF SECURITIES) 88575R308 (CUSIP NUMBER) D. MARTIN PHILLIPS ENCAP INVESTMENTS L.L.C. 1100 LOUISIANA, SUITE 3150 HOUSTON, TEXAS 77002 (713) 659-6100 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) NOVEMBER 28, 2001 (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 ss.ss. 240.13d-1(e), 240.13d-1(f) or 204.13d-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 ss. 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of the 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 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D/A CUSIP NO. 88575R308 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) ENCAP ENERGY CAPITAL FUND III, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO (SEE ITEM 3) - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION ENCAP ENERGY CAPITAL FUND III, L.P. ("ENCAP III") IS A LIMITED PARTNER- SHIP ORGANIZED UNDER THE LAWS OF THE STATE OF TEXAS - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,911,322(1) NUMBER OF SHARES BENEFICIALLY ----------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER 0 EACH REPORTING PERSON ----------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 1,911,322(1) ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,911,322 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 11.6%(2) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- (1) As exercised through its sole general partner, EnCap Investments L.L.C. (2) Based on 15,903,992 shares of Common Stock issued and outstanding on October 12, 2001. 2 SCHEDULE 13D/A CUSIP NO. 88575R308 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) ENCAP ENERGY ACQUISITION III-B, INC. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO (SEE ITEM 3) - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION ENCAP ENERGY ACQUISITION III-B, INC. ("ENCAP ACQUISITION III-B") IS A CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF TEXAS - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,445,537(1) NUMBER OF SHARES BENEFICIALLY ----------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER 0 EACH REPORTING PERSON ----------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 1,445,537(1) ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,445,537 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.8%(2) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - -------------------------------------------------------------------------------- (1) As exercised through its controlling person, EnCap Energy Capital Fund III-B. L.P. (2) Based on 15,903,992 shares of Common Stock issued and outstanding on October 12, 2001. 3 SCHEDULE 13D/A CUSIP NO. 88575R308 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) ENCAP ENERGY CAPITAL FUND III-B, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO (SEE ITEM 3) - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION ENCAP ENERGY CAPITAL FUND III-B, L.P.("ENCAP III-B") IS A LIMITED PARTNERSHIP ORGANIZED UNDER THE LAWS OF THE STATE OF TEXAS - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF SHARES BENEFICIALLY ----------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER 1,445,537(1) EACH REPORTING PERSON ----------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 0 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 1,445,537(1) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,445,537(2) - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.8%(3) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- (1) EnCap III-B may be deemed to have voting and dispositive power with respect to the shares of Common Stock owned by EnCap Acquisition III-B, as exercised through EnCap III-B's sole general partner, EnCap Investments L.L.C. See Items 2 and 5. (2) EnCap III-B disclaims any beneficial ownership of the shares owned by EnCap Acquisition III-B. See Item 5. (3) Based on 15,903,992 shares of Common Stock issued and outstanding on October 12, 2001. 4 SCHEDULE 13D/A CUSIP NO. 88575R308 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) ENCAP INVESTMENTS L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO (SEE ITEM 3) - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION ENCAP INVESTMENTS L.L.C. ("ENCAP INVESTMENTS") IS A LIMITED LIABILITY COMPANY ORGANIZED UNDER THE LAWS OF THE STATE OF TEXAS - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF SHARES BENEFICIALLY ----------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER 4,499,452(1) EACH REPORTING PERSON ----------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 0 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 4,499,452(1) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,499,452(2) - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 25.8%(3) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO - -------------------------------------------------------------------------------- (1) EnCap Investments may be deemed to have voting and dispositive power with respect to the shares of Common Stock owned by the EnCap Entities (as defined in Item 2). See Items 2 and 5. (2) EnCap Investments disclaims any beneficial ownership of the shares owned by the EnCap Entities. (3) Based on 15,903,992 shares of Common Stock issued and outstanding on October 12, 2001. 5 ITEM 1. SECURITY AND ISSUER. No modification. ITEM 2. IDENTITY AND BACKGROUND. Item 2 is amended and restated in its entirety as follows: (a) - (c) EnCap Energy Capital Fund III, L.P. ("EnCap III") is a Texas limited partnership with its principal executive offices at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. The principal business of EnCap III is engaging in oil and gas investments. EnCap Investments L.L.C. ("EnCap Investments") is the general partner of EnCap III. EnCap Energy Acquisition III-B, Inc. ("EnCap Acquisition III-B") is a Texas corporation with its principal executive offices at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. The principal business of EnCap Acquisition III-B is engaging in oil and gas investments. The controlling person of EnCap Acquisition III-B is EnCap Energy Capital Fund III-B, L.P., a Texas limited partnership. Current information concerning the executive officers and directors of EnCap Acquisition III-B is set forth on Schedule I hereto. EnCap Energy Capital Fund III-B, L.P. ("EnCap III-B") is a Texas limited partnership with its principal executive offices at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. The principal business of EnCap III is engaging in oil and gas investments. EnCap Investments is the general partner of EnCap III-B. EnCap Investments is a Delaware limited liability company with its principal executive offices at 1100 Louisiana Street, Suite 3150, Houston, Texas 77002. The principal business of EnCap Investments is engaging in oil and gas investments. EnCap Investments is the general partner or controlling person of EnCap III, EnCap Acquisition III-B, ECIC Corporation, a Texas corporation, and BOCP Energy Partners, L.P., a Texas limited partnership (collectively, the "EnCap Entities"). Current information concerning the sole member and managing directors of EnCap Investments is set forth on Schedule I hereto. The sole member of EnCap Investments is El Paso Merchant Energy North America Company, a Delaware corporation ("El Paso Merchant Energy"). El Paso Merchant Energy is a Delaware corporation with its principal executive offices at 1001 Louisiana Street, Houston, Texas 77002. The principal business of El Paso Merchant Energy is natural gas gathering and processing and intrastate gas transmission. Current information concerning the controlling person and executive officers and directors of El Paso Merchant Energy is set forth on Schedule I hereto. The controlling person of El Paso Merchant Energy is El Paso Corporation, a Delaware corporation ("El Paso Corporation"). El Paso Corporation is a Delaware corporation with its principal executive offices located at 1001 Louisiana Street, Houston, Texas 77002. The principal business of El Paso Corporation is serving as a holding company for its various subsidiaries, which are engaged in energy and related businesses. Current information concerning the executive officers and directors of El Paso Corporation is set forth on Schedule I hereto. (d)-(f) See Schedule I. 6 ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The following is added to the section titled "Securities distributed to Floyd C. Wilson": In addition, on July 24, 2001, W/E Energy distributed to certain entities designated by Floyd C. Wilson, as an advance on his "put," 11,750 shares of Common Stock. The following is added to Item 3: WARRANT ASSIGNMENT On May 22, 2001, EnCap III, ECIC Corporation, a Texas corporation ("ECIC"), EnCap Acquisition III-B, BOCP Energy Partners, L.P., a Texas limited partnership ("BOCP," collectively with EnCap III, ECIC, EnCap Acquisition III-B, and BOCP, the "EnCap Entities"), and Pel-Tex Partners L.L.C. ("Pel-Tex") entered into a Master Assignment and Assumption Agreement pursuant to which Pel-Tex assigned 6,855 warrants to ECIC, 19,414 warrants to EnCap III, 14,683 warrants to EnCap Acquisition III-B, and 4,750 warrants to BOCP. Each warrant (i) represents the right to purchase one share of Common Stock of the Issuer at an exercise price of $30.00 per share, and (ii) expires on February 3, 2004. Further pursuant to the Master Assignment and Assumption Agreement, the EnCap Entities assumed contingent indemnification obligations of Pel-Tex arising pursuant to Section 12.4 of the Agreement and Plan of Merger dated December 21, 1999, as amended January 14, 2000, and February 2, 2000 by and between Pel-Tex, the EnCap Entities, the Issuer, 3TM Acquisition L.L.C., a Delaware limited liability company, and Magellan Exploration, LLC, a Delaware limited liability company. DISSOLUTION OF W/E ENERGY On November 28, 2001, the members of W/E Energy Company L.L.C. executed an Agreement to Dissolve W/E Energy Company L.L.C. and filed a Certificate of Cancellation with the Delaware Secretary of State. Pursuant to the Agreement to Dissolve, the assets of W/E Energy were distributed 42.479005% to EnCap III, 32.12694% to EnCap Acquisition III-B, 15% to ECIC, and 10.394055% to BOCP. ITEM 4. PURPOSE OF TRANSACTION. No modification. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 is amended and restated in its entirety as follows: (a) The following table describes the number of shares of Common Stock, including shares of Common Stock issuable upon exercise or conversion of derivative securities and the percent of outstanding Common Stock owned by each of the reporting persons and the EnCap Entities. All percentages are based on 15,903,992 shares of Common Stock issued and outstanding on October 12, 2001. 7
COMMON STOCK DERIVATIVE SECURITIES TOTAL --------------------- ------------------------ ------------------------- NAME SOLE SHARED SOLE SHARED NUMBER %(1) ----- -------- --------- --------- ---------- --------- ----------- EnCap Investments L.L.C. -- 2,980,635 -- 1,518,817(2) 4,499,452 25.8% EnCap Energy Capital Fund III, L.P. 1,266,144 -- 645,178(2) -- 1,911,322 11.6% EnCap Energy Acquisition III-B, Inc. 957,587 -- 487,950(2) -- 1,445,537 8.8% EnCap Energy Capital Fund III-B, L.P. -- 957,587 -- 487,950(2) 1,445,537 8.8% ECIC Corporation 447,095 -- 227,822(2) -- 674,917 4.2% BOCP Energy Partners, L.P. 309,809 -- 157,867(2) -- 467,676 2.9%
- -------------- (1) In accordance with SEC regulations under Section 13(d) of the Act, the percent shown in this column for each stockholder represents the number of shares of Common Stock owned by the stockholder plus the derivative securities (on an as converted basis) owned by such stockholder divided by the number of shares outstanding plus the number of derivative securities (on an as converted basis) owned by such stockholder. (2) Represents warrants to purchase Common Stock which are exercisable within 60 days of this filing, and shares of Common Stock issuable upon conversion of the Issuer's Series D Convertible Preferred Stock. (b) EnCap Investments. EnCap Investments may be deemed to have the power to vote and direct the vote or to dispose or direct the disposition of 4,499,452 shares of Common Stock collectively owned by the EnCap Entities (by virtue of being the general partner or controlling person of each such entity). EnCap Investments disclaims beneficial ownership of the shares of Common Stock owned by the EnCap Entities. EnCap III. EnCap III has the sole power to vote and dispose or direct the disposition of 1,911,322 shares of Common Stock through its general partner, EnCap Investments. EnCap Acquisition III-B. EnCap Acquisition III-B has the sole power to vote and dispose or direct the disposition of 1,445,537 shares of Common Stock through its controlling person, EnCap III-B. EnCap III-B. EnCap III-B may be deemed to have the power to vote and direct the vote or to dispose or direct the disposition of 1,445,537 shares of Common Stock collectively owned by EnCap Acquisition III-B (by virtue of being the controlling person of EnCap Acquisition III-B), through EnCap III-B's general partner, EnCap Investments. EnCap III-B disclaims beneficial ownership of the shares of Common Stock owned by EnCap Acquisition III-B. El Paso Merchant Energy and El Paso Corporation. Each of El Paso Merchant Energy and El Paso Corporation may be deemed to have the power to vote and direct the vote or to dispose or direct the disposition of the shares of Common Stock deemed to be owned by EnCap Investments (by virtue of being controlling persons of EnCap Investments). El Paso Merchant Energy and El Paso Corporation disclaim beneficial ownership of the shares of Common Stock owned by the EnCap Entities. Executive Officers and Directors. Except as otherwise described herein, to the knowledge of the reporting persons, no executive officer or director of the reporting persons or managing director of EnCap Investments or other person listed in Schedule I has the power to vote or direct the vote or dispose or direct the disposition of any shares of Common Stock. (c) Except as otherwise described herein or in any Exhibit filed herewith, and to the knowledge of the reporting persons, none of the persons named in response to Paragraph (a) above has affected any transaction in the Common Stock during the past sixty (60) days. 8 (d) Except as otherwise described herein, no person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock deemed to be beneficially owned by them. (e) W/E Energy Company L.L.C. ceased to be the owner of more than five percent (5%) of the shares of Common Stock on November 28, 2001 when it dissolved and distributed its assets, including all of the securities of the Issuer that it held, to its members. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SECURITIES OF THE ISSUER. No modification. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The following is added to Item 7: Exhibit 10.9 - Master Assignment and Assumption Agreement dated May 22, 2001 among ECIC Corporation, EnCap Energy Capital Fund III, L.P., EnCap Energy Acquisition III-B, Inc., BOCP Energy Partners, L.P., and Pel-Tex Partners L.L.C. Exhibit 10.10 - Agreement to Dissolve W/E Energy Company L.L.C. dated November 28, 2001 among EnCap Energy Capital Fund III, L.P., EnCap Energy Capital Fund III-B, L.P., ECIC Corporation, and BOCP Energy Partners, L.P. 9 SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: December 26, 2001 ENCAP INVESTMENTS L.L.C. By: /s/ D. MARTIN PHILLIPS ---------------------- D. Martin Phillips Manager Date: December 26, 2001 ENCAP ENERGY CAPITAL FUND III, L.P. By: EnCap Investments L.L.C., its general partner By: /s/ D. MARTIN PHILLIPS ----------------------- D. Martin Phillips Managing Director Date: December 26, 2001 ENCAP ENERGY ACQUISITION III-B, INC. By: /s/ D. MARTIN PHILLIPS ----------------------- D. Martin Phillips Vice President Date: December 26, 2001 ENCAP ENERGY CAPITAL FUND III-B, L.P. By: EnCap Investments L.L.C., its general partner By: /s/ D. MARTIN PHILLIPS ----------------------- D. Martin Phillips Managing Director 10 EXHIBIT 1 AGREEMENT The undersigned reporting persons hereby agree that the statements filed pursuant to this Schedule 13D/A, to which this Agreement is filed as an exhibit, are filed on behalf of each of them. Date: December 26, 2001 ENCAP INVESTMENTS L.L.C. By: /s/ D. MARTIN PHILLIPS ---------------------- D. Martin Phillips Manager Date: December 26, 2001 ENCAP ENERGY CAPITAL FUND III, L.P. By: EnCap Investments L.L.C., its general partner By: /s/ D. MARTIN PHILLIPS ----------------------- D. Martin Phillips Managing Director Date: December 26, 2001 ENCAP ENERGY ACQUISITION III-B, INC. By: /s/ D. MARTIN PHILLIPS ----------------------- D. Martin Phillips Vice President Date: December 26, 2001 ENCAP ENERGY CAPITAL FUND III-B, L.P. By: EnCap Investments L.L.C., its general partner By: /s/ D. MARTIN PHILLIPS ----------------------- D. Martin Phillips Managing Director 11 SCHEDULE I DIRECTORS, MANAGERS, EXECUTIVE OFFICERS, OR CONTROLLING PERSONS The name, business address, present principal occupation or employment and the name, principal business address of any corporation or other organization in which such employment is conducted, of each of (i) the executive officers and directors of EnCap Energy Acquisition III-B, Inc., (ii) the managing directors of EnCap Investments, (iii) the directors and executive officers of El Paso Merchant Energy, and (iv) the directors and executive officers of El Paso Corporation are set forth below:
Name, Principal Business Address Name and Capacity in Principal of Organization in which Business Address Which Serves Occupation Principal Occupation is Conducted ---------------- ------------ ---------- --------------------------------- (i) EnCap Energy Acquisition III-B, Inc. David B. Miller Director and Managing Director of EnCap Investments L.L.C. 3811 Turtle Creek Blvd. Vice President EnCap Investments 3811 Turtle Creek Blvd. Dallas, Texas 75219 Dallas, Texas 75219 D. Martin Phillips Director, Vice Managing Director of EnCap Investments L.L.C. 1100 Louisiana, Suite 3150 President, and EnCap Investments 1100 Louisiana, Suite 3150 Houston, Texas 77002 Secretary Houston, Texas 77002 Robert L. Zorich Director and Managing Director of EnCap Investments L.L.C. 1100 Louisiana, Suite 3150 President EnCap Investments 1100 Louisiana, Suite 3150 Houston, Texas 77002 Houston, Texas 77002 Gary R. Petersen Director, Vice Managing Director of EnCap Investments L.L.C. 1100 Louisiana, Suite 3150 President, and EnCap Investments 1100 Louisiana, Suite 3150 Houston, Texas 77002 Treasurer Houston, Texas 77002 - ---------------------------------- ------------------ -------------------------- -----------------------------------
Name, Principal Business Address Name and Capacity in Principal of Organization in which Business Address Which Serves Occupation Principal Occupation is Conducted ---------------- ------------ ---------- --------------------------------- (ii) EnCap Investments L.L.C. David B. Miller Managing Director Managing Director of EnCap Investments L.L.C. 3811 Turtle Creek Blvd. of EnCap EnCap Investments 3811 Turtle Creek Blvd. Dallas, Texas 75219 Investments Dallas, Texas 75219 D. Martin Phillips Managing Director Managing Director of EnCap Investments L.L.C. 1100 Louisiana, Suite 3150 of EnCap EnCap Investments 1100 Louisiana, Suite 3150 Houston, Texas 77002 Investments Houston, Texas 77002 Robert L. Zorich Managing Director Managing Director of EnCap Investments L.L.C. 1100 Louisiana, Suite 3150 of EnCap EnCap Investments 1100 Louisiana, Suite 3150 Houston, Texas 77002 Investments Houston, Texas 77002
I-1
Name, Principal Business Address Name and Capacity in Principal of Organization in which Business Address Which Serves Occupation Principal Occupation is Conducted ---------------- ------------ ---------- --------------------------------- Gary R. Petersen Managing Director Managing Director of EnCap Investments L.L.C. 1100 Louisiana, Suite 3150 of EnCap EnCap Investments 1100 Louisiana, Suite 3150 Houston, Texas 77002 Investments Houston, Texas 77002
Name, Principal Business Address Name and Capacity in Principal of Organization in which Business Address Which Serves Occupation Principal Occupation is Conducted ---------------- ------------ ---------- --------------------------------- (iii) El Paso Merchant Energy North America Company Clark C. Smith President and President, El Paso El Paso Merchant Energy 1001 Louisiana Street Director Merchant Energy North America Company Houston, Texas 77002 1001 Louisiana Street Houston, Texas 77002 John B. Holmes, Jr. Chief Operating Chief Operating Officer, El Paso Merchant Energy 1001 Louisiana Street Officer El Paso North America Company Houston, Texas 77002 Merchant Energy 1001 Louisiana Street Houston, Texas 77002 Timothy D. Bourn Vice President and Vice President and El Paso Merchant Energy 1001 Louisiana Street Senior Managing Senior Managing North America Company Houston, Texas 77002 Director Director, El Paso 1001 Louisiana Street Merchant Energy Houston, Texas 77002 Larry W. Kellerman Vice President and Vice President and El Paso Merchant Energy 1001 Louisiana Street Senior Managing Senior Managing North America Company Houston, Texas 77002 Director Director, El Paso 1001 Louisiana Street Merchant Energy Houston, Texas 77002 John L. Harrison Senior Vice Senior Vice President El Paso Merchant Energy 1001 Louisiana Street President and and Chief Financial North America Company Houston, Texas 77002 Chief Financial Officer, El Paso 1001 Louisiana Street Officer Merchant Energy Houston, Texas 77002 W. C. Mack Senior Vice Senior Vice President, El Paso Merchant Energy 1001 Louisiana Street President El Paso Merchant Energy North America Company Houston, Texas 77002 1001 Louisiana Street Houston, Texas 77002 Grady M. Blakley Senior Vice Senior Vice President, El Paso Merchant Energy 1001 Louisiana Street President El Paso Merchant Energy North America Company Houston, Texas 77002 1001 Louisiana Street Houston, Texas 77002
II-2
Name, Principal Business Address Name and Capacity in Principal of Organization in which Business Address Which Serves Occupation Principal Occupation is Conducted ---------------- ------------ ---------- --------------------------------- Ralph Eads Director Executive Vice El Paso Corporation 1001 Louisiana Street President, El Paso 1001 Louisiana Street Houston, Texas 77002 Corporation Houston, Texas 77002
Name, Principal Business Address Name and Capacity in Principal of Organization in which Business Address Which Serves Occupation Principal Occupation is Conducted ---------------- ------------ ---------- --------------------------------- (iv) El Paso Corporation William A. Wise Chairman of the Director, Chairman of the El Paso Corporation 1001 Louisiana Street Board, Board, 1001 Louisiana Street Houston, Texas 77002 President, Chief President, and Chief Houston, Texas 77002 Executive Executive Officer, and Officer of El Paso Director Corporation H. Brent Austin Executive Vice Executive Vice President El Paso Corporation 1001 Louisiana Street President and 1001 Louisiana Street Houston, Texas 77002 and Chief Financial Officer of Houston, Texas 77002 Chief Financial El Paso Corporation Officer Ralph Eads Executive Vice Executive Vice President El Paso Corporation 1001 Louisiana Street President of 1001 Louisiana Street Houston, Texas 77002 El Paso Corporation Houston, Texas 77002 Joel Richards III Executive Vice Executive Vice El Paso Corporation 1001 Louisiana Street President President, Human 1001 Louisiana Street Houston, Texas 77002 Resources and Houston, Texas 77002 Administration of El Paso Corporation William A. Smith Executive Vice Executive Vice President, El Paso Corporation 1001 Louisiana Street President Business Development of 1001 Louisiana Street Houston, Texas 77002 El Paso Corporation Houston, Texas 77002 John W. Somerhalder II President, Pipeline President, Pipeline Group El Paso Corporation 1001 Louisiana Street Group of 1001 Louisiana Street Houston, Texas 77002 El Paso Corporation Houston, Texas 77002 Britton White Jr. Executive Vice Executive Vice El Paso Corporation 1001 Louisiana Street President President and 1001 Louisiana Street Houston, Texas 77002 and General Counsel of El Paso Houston, Texas 77002 General Counsel Corporation Jeffrey I. Beason Senior Vice Senior Vice President and El Paso Corporation 1001 Louisiana Street President and Controller of El Paso 1001 Louisiana Street Houston, Texas 77002 Controller Corporation Houston, Texas 77002
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Name, Principal Business Address Name and Capacity in Principal of Organization in which Business Address Which Serves Occupation Principal Occupation is Conducted ---------------- ------------ ---------- --------------------------------- C. Dana Rice Senior Vice Senior Vice President and El Paso Corporation 1001 Louisiana Street President and Treasurer of El Paso 1001 Louisiana Street Houston, Texas 77002 Treasurer Corporation Houston, Texas 77002 Patricia A. Shelton President President of El Paso Natural Gas Company 1001 Louisiana Street Western Pipeline Western Pipeline Division 1001 Louisiana Street Houston, Texas 77002 Division Houston, Texas 77002 E. J. Holm Chief Executive Chief Executive Officer El Paso Natural Gas Company 1001 Louisiana Street Officer Eastern Pipeline Division 1001 Louisiana Street Houston, Texas 77002 Eastern Pipeline Houston, Texas 77002 Division John D. Hushon Chief Executive Chief Executive Officer El Paso Energy International 1001 Louisiana Street Officer, El Paso Europe Company Houston, Texas 77002 El Paso Europe 1001 Louisiana Street Houston, Texas 77002 Greg C. Jenkins President of El President of El Paso El Paso Global Networks Company 1001 Louisiana Street Paso Global Global 1001 Louisiana Street Houston, Texas 77002 Networks Company Networks Company Houston, Texas 77002 Robert G. Phillips President of El President of El Paso Field El Paso Field Services, L.P. 1001 Louisiana Street Paso Field Services, L.P. 1001 Louisiana Street Houston, Texas 77002 Services, L.P. Houston, Texas 77002 James C. Yardley President, Southern President, Southern Southern Natural Gas Company 1001 Louisiana Street Natural Gas Company Natural 1001 Louisiana Street Houston, Texas 77002 Gas Company Houston, Texas 77002 John B. Holmes, Jr. Chief Operating Chief Operating Officer of El Paso Merchant Energy North 1001 Louisiana Street Officer Merchant Energy Group America Company Houston, Texas 77002 Merchant Energy 1001 Louisiana Street Group Houston, Texas 77002 Stephen C. Beasley President, President, Tennessee Gas Tennessee Gas Pipeline Company 1001 Louisiana Street Tennessee Gas Pipeline 1001 Louisiana Street Houston, Texas 77002 Pipeline Company Company Houston, Texas 77002 James J. Cleary President, ANR President of ANR Pipeline ANR Pipeline Company 1001 Louisiana Street Pipeline Company 1001 Louisiana Street Houston, Texas 77002 Company Houston, Texas 77002 Byron Kelly President, El Paso President, El Paso Energy El Paso Energy International 1001 Louisiana Street Energy International Company Company Houston, Texas 77002 International 1001 Louisiana Street Company Houston, Texas 77002 Tom Wade President, Merchant President, Merchant Energy Coastal States Crude Gathering 1001 Louisiana Street Energy Petroleum Petroleum Markets Company Houston, Texas 77002 Markets 1001 Louisiana Street Houston, Texas 77002
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Name, Principal Business Address Name and Capacity in Principal of Organization in which Business Address Which Serves Occupation Principal Occupation is Conducted ---------------- ------------ ---------- --------------------------------- Rod Erskine President President of El Paso El Paso Production Company 1001 Louisiana Street El Paso Production Production 1001 Louisiana Street Houston, Texas 77002 Company Company Houston, Texas 77002 Byron Allumbaugh Director Retired Chairman 33 Ridgeline Drive 33 Ridgeline Drive Ralphs Grocery Company Newport Beach, CA 92660 Newport Beach, CA 92660 John M. Bissell Director Chairman of the Board of Bissell Inc. 2345 Walker Ave. N.W. Bissell Inc. 2345 Walker Avenue, N.W. Grand Rapids, MI 49501 Grand Rapids, MI 49501 Juan Carlos Braniff Director Vice Chairman Universidad 1200 Universidad 1200 Grupo Financiero Bancomer Col. XOCO Col. XOCO Mexico, D.F.C.P. 03399 Mexico, D.F.C.P. 03339 James F. Gibbons Director Professor at Stanford Stanford University Stafford University University Paul G. Allen Center Paul G. Allen Center for School of Engineering for Integrated Systems Integrated Systems Room 201 ( Mail Stop 4075) Room 201 (M.S. 4075) Stanford, CA 94305 Stanford, CA 94305 Anthony W. Hall, Jr. Director City Attorney City of Houston 900 Bagby, 4th Floor City of Houston, Texas 900 Bagby, 4th Floor Houston, Texas 77002 Houston, Texas 77002 Ronald L. Kuhn, Jr Director Business Consultant El Paso Corporation 1001 Louisiana Street 1001 Louisiana Street Houston, Texas 77002 Houston, Texas 77002 J. Carleton MacNeil Jr. Director Securities Consultant 3421 Spanish Trail 3421 Spanish Trail Apt. 227D Apt. 227D Delray, Florida 33483 Delray, Florida 33483 Thomas R. McDade Director Senior Partner, McDade, McDade, Fogler, Maines, L.L.P. Two Houston Center Fogler, Two Houston Center 909 Fannin, Suite 1200 Maines, L.L.P. 909 Fannin, Suite 1200 Houston, TX 77010 Houston, Texas 77010 Malcolm Wallop Director Frontiers of Freedom Frontiers of Freedom Foundation Frontiers of Freedom Foundation Foundation 12011 Lee Jackson Memorial Hwy. 12011 Lee Jackson Memorial Hwy. Fairfax, VA 22033 Fairfax, VA 22033
I-5
Name, Principal Business Address Name and Capacity in Principal of Organization in which Business Address Which Serves Occupation Principal Occupation is Conducted ---------------- ------------ ---------- --------------------------------- Joe B. Wyatt Director Chancellor Emeritus Vanderbilt University 2525 West End Ave., Vanderbilt University 2525 West End Ave., Suite 1410 Suite 1410 Nashville, TN 37203 Nashville, TN 37203
(d) Neither EnCap III, EnCap Acquisition III-B, EnCap III-B, EnCap Investments, El Paso Corporation, El Paso Merchant Energy, nor any of the individuals identified in this Schedule I has, to the knowledge of the reporting persons, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Neither EnCap III, EnCap Acquisition III-B, EnCap III-B,, EnCap Investments, El Paso Corporation, El Paso Merchant Energy, nor any of the individuals identified in this Schedule I has, to the knowledge of the reporting persons, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) To the knowledge of the reporting person each of the individuals identified in this Schedule I is a citizen of the United States of America, with the exception of Juan Carlos Braniff, who is a citizen of Mexico. I-6 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- Exhibit 10.9 - Master Assignment and Assumption Agreement dated May 22, 2001 among ECIC Corporation, EnCap Energy Capital Fund III, L.P., EnCap Energy Acquisition III-B, Inc., BOCP Energy Partners, L.P., and Pel-Tex Partners L.L.C. Exhibit 10.10 - Agreement to Dissolve W/E Energy Company L.L.C. dated November 28, 2001 among EnCap Energy Capital Fund III, L.P., EnCap Energy Capital Fund III-B, L.P., ECIC Corporation, and BOCP Energy Partners, L.P. EX-10.9 3 h93139a3ex10-9.txt MASTER ASSIGNMENT & ASSUMPTION AGREEMENT EXHIBIT 10.9 EXECUTION COPY MASTER ASSIGNMENT AND ASSUMPTION AGREEMENT This MASTER ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") is entered into effective as of May 22, 2001, by and among ECIC CORPORATION, a Texas corporation ("ECIC"), ENCAP ENERGY CAPITAL FUND III, L.P., a Texas limited partnership ("Fund III"), ENCAP ENERGY ACQUISITION III-B, INC., a Texas corporation ("Acquisition"), BOCP ENERGY PARTNERS, L.P., a Texas limited partnership ("BOCP"), and PEL-TEX PARTNERS L.L.C., a Delaware limited liability company ("Pel-Tex"). ECIC, Fund III, Acquisition, and BOCP are referred to herein individually as an "EnCap Party" and collectively as the "EnCap Parties." The EnCap Parties and Pel-Tex are referred to herein individually as a "Party" and collectively as the "Parties." WITNESSETH: WHEREAS, the Parties, 3TEC Energy Corporation, a Delaware corporation ("3TEC"), 3TM Acquisition L.L.C., a Delaware limited liability company, and Magellan Exploration, LLC, a Delaware limited liability company ("Magellan"), entered into that certain Agreement and Plan of Merger dated December 21, 1999, as amended on January 14, 2000, and February 2, 2000 (the "Merger Agreement"); WHEREAS, subsequent to the date of the Merger Agreement, 3TEC became the successor to all of the assets and liabilities of Magellan; WHEREAS, pursuant to Section 12.4 of the Merger Agreement, the Parties agreed to certain indemnification obligations as set forth in such section; WHEREAS, Pel-Tex is the owner of 45,702 Warrants (the "3TEC Warrants"), each such Warrant evidencing the right to purchase one share of Common Stock of 3TEC, in connection with the transactions set forth in the Merger Agreement; WHEREAS, Pel-Tex holds certain rights and interests pursuant to that certain Agreement to Convey Working Interest upon Project Payout, dated effective February 3, 2000, by and between Magellan, the EnCap Parties, and Pel-Tex (such agreement is referred to herein as the "Back-In Agreement"), and Pel-Tex's rights, title and interests in and to such Agreement are referred to herein as the "Back-In Interests"); WHEREAS, in exchange for the transfer by Pel-Tex to the EnCap Parties of the 3TEC Warrants and the Back-In Interests, the EnCap Parties desire to assume Pel-Tex's indemnification obligations pursuant to Section 12.4 of the Merger Agreement, and Pel-Tex desires to transfer the 3TEC Warrants and Back-In Interests to the EnCap Parties in consideration of the EnCap Parties' assumption of Pel-Tex's indemnification obligations pursuant to Section 12.4 of the Merger Agreement; NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, and intending to be legally bound hereby, the Parties hereto agree as follows: Section 1. Definitions. Unless otherwise defined in this Agreement, all terms contained herein shall have the same definitions as that in the Merger Agreement. Section 2. Assumption of Liabilities. Subject to the terms of this Agreement, and in consideration for the assignment, sale and transfer of the 3TEC Warrants and the Back-In Interests, the EnCap Parties hereby expressly assume, and shall be responsible for and perform and discharge when due, severally, but not jointly, on a pro rata basis (determined, other than the indemnification obligations described in Section 12.4(b) of the Merger Agreement, by reference to and in accordance with the respective Prepayout Interests of the EnCap Parties as set forth in Exhibit A to the Merger Agreement, which is hereby replaced as provided below) any and all of the indemnification obligations and associated liabilities of Pel-Tex as described in Section 12.4 of the Merger Agreement in accordance with the terms of the various indemnification obligations set forth in such Section 12.4 whether heretofore or hereafter accrued or existing (the "Assumed Indemnification Obligations"). As a result of the assumption by the EnCap Parties of the Assumed Indemnification Obligations, effective as of the date of this Agreement, Pel-Tex will not have any obligations or liabilities to indemnify and hold harmless 3TEC, Magellan or any other party or any successors or assigns thereof or any of their shareholders, directors, officers, employees, agents, successors and assigns from any and all liabilities, losses, damages, costs and expenses of any kind as described in Section 12.4 of the Merger Agreement. Pel-Tex does hereby assign, sell, transfer, and convey to the EnCap Parties on a pro rata basis (determined in accordance with the Prepayout Interests of the EnCap Parties as set forth in the Merger Agreement) all of Pel-Tex's rights associated with the Assumed Indemnification Obligations pursuant to Section 12.4 of the Merger Agreement. In connection with the assignment and assumption of the Assumed Indemnification Obligations and the associated rights pursuant to Section 12.4 of the Merger Agreement, the Parties hereby agree that Exhibit A to the Merger Agreement shall be deleted in its entirety and replaced with Exhibit A attached hereto. Section 3. Consideration for Assumption. As consideration for the assumption by the EnCap Parties of the indemnification obligations as set forth in Section 2 hereof, Pel-Tex does hereby assign, sell, transfer and convey to the EnCap Parties on a pro rata basis (determined in accordance with the Prepayout Interests of the EnCap Parties as set forth in the Merger Agreement) the 3TEC Warrants and the ownership interests as described in paragraphs 3(a) and (b) below (the "Assigned Interests"): (a) The 3TEC Warrants as evidenced by that certain Warrant Certificate No. W-10 issued by 3TEC representing the 3TEC Warrants, each warrant representing the right to purchase one share of common stock of 3TEC at a price of $30.00 per share; the transfer and assignment of the 3TEC Warrants shall be pursuant to the Assignment of Warrant in the 2 form attached hereto as Exhibit C, which Pel-Tex agrees to execute and deliver to the EnCap Parties concurrent with the execution and delivery of this Agreement; and (b) All of Pel-Tex's rights, title and interest in and to the Back-In Interests; the transfer and assignment of the Back-In Interests shall be pursuant to the Assignment of Working Interest upon Project Payout in the form attached hereto as Exhibit D, which Pel-Tex agrees to execute and deliver to the EnCap Parties concurrent with the execution and delivery of this Agreement. Section 4. Representations and Warranties of Pel-Tex. Pel-Tex makes the following representations and warranties to the EnCap Parties: (a) To the best of Pel-Tex's knowledge, Pel-Tex does not know of any pending or threatened demands, claims, litigation or proceedings involving or pertaining to matters which would give rise to any indemnification obligations of Pel-Tex pursuant to Section 12.4 of the Merger Agreement; (b) Except for the consent of 3TEC which must be obtained in connection with the transactions set forth in this Agreement, the execution, delivery and performance of this Agreement by Pel-Tex (i) are within the power of Pel-Tex, (ii) have been duly authorized by all necessary action on the part of Pel-Tex, (iii) require no action by or in respect of, filing with, any governmental authority, (iv) do not contravene, or constitute a default under, any provision of applicable law, Pel-Tex's Charter Documents or any material judgment, injunction, order, decree, or material agreement binding upon Pel-Tex or its assets and (v) will not result in the creation or imposition of any Lien on any assets of Pel-Tex; (c) This Agreement constitutes the valid and binding agreement of Pel-Tex, enforceable against it in accordance with the terms hereof, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors' rights generally, and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability; and (d) Pel-Tex is the owner, beneficially and of record, of the 3TEC Warrants and the Back-In Interests, there are no outstanding Liens, options, warrants or other rights to acquire affecting either the 3TEC Warrants or the Back-In Interests, and Pel-Tex has the right, without any restriction, except for the consent of 3TEC and Magellan as required pursuant to the terms of the 3TEC Warrants and Back-In Interests, to transfer the 3TEC Warrants and Back-In Interests to the EnCap Parties as set forth herein. Section 5. Representations and Warranties of the EnCap Parties. Each EnCap Party severally (and not jointly) makes the following representations and warranties to Pel-Tex: (a) Except for the consent of 3TEC which must be obtained in connection with the transactions set forth in this Agreement, the execution, delivery and performance of this Agreement by such EnCap Party (i) are within the powers of such EnCap Party, (ii) have 3 been duly authorized by all necessary action on the part of such EnCap Party, (iii) require no action by or in respect of, filing with, any governmental authority, (iv) do not contravene, or constitute default under, any provision of applicable law, the Charter Documents of such EnCap Party or any material judgment, injunction, order, decree, or material agreement binding upon such EnCap Party or its assets and, (v) except for the transactions expressly set forth in this Agreement, will not result in the creation or imposition of any Lien on any assets of such EnCap Party; (b) This Agreement constitutes the valid and binding agreement of such EnCap Party, enforceable against it in accordance with the terms hereof, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors' rights generally, and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability; and (c) The acquisition of the 3TEC Warrants by such EnCap Party is for its own investment purposes and not with a view toward the distribution thereof; that such EnCap Party acknowledges and agrees that the 3TEC Warrants may not be transferred except pursuant to a registration in accordance with securities laws of the United States and all applicable states, or pursuant to an applicable exemption therefrom. Section 6. Further Assurances. Each Party hereto agrees to take such actions and to execute and deliver such documents, agreements and certificates as may be reasonably requested by any other Party hereto to carry out the transactions as set forth herein, including, without limitation, the execution, delivery, and filing of any assignments or other documents as necessary to evidence the transfer of the 3TEC Warrants and Back-In Interests as set forth herein. Section 7. Expenses. Each Party shall be responsible for their own expenses incurred in connection with the negotiation, execution and delivery of this Agreement and the documents, agreements and certificates which are required in connection with the consummation of the transactions as set forth herein. Section 8. Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered in the manner and to the Parties at the addresses as set forth in the Merger Agreement. Section 9. Counterparts. This Agreement may be executed in any number of counterparts each of which will be deemed to be an original but all of which shall be deemed one and the same document. Section 10. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Texas, without consideration to the conflict of laws principles thereof. Section 11. Venue. Each Party hereby irrevocably submits to the exclusive jurisdiction of the United States District Courts for Southern District located in Houston, Harris County, Texas, 4 and/or the State District Courts of the State of Texas located in Houston, Harris County, Texas, in any action, suit or proceeding arising in connection with this Agreement, and agrees that any such action, suit or proceeding shall be brought only in such courts (and waives any objection based on forum non conveniens or any other objection to venue therein); provided, however, that such consent to jurisdiction is solely for the purpose referred to in this Section 11 and shall not be deemed to be a general submission to the jurisdiction of said Courts or in the State of Texas other than for such purpose. Section 12. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns. This Agreement may not be assigned by any Party hereto, without the prior written consent of each other Party hereto. Any attempted assignment in violation of the preceding sentence shall be null and void. Section 13. Final Agreement. This Agreement represents the final agreement between the Parties and may not be contradicted by evidence of prior or contemporaneous agreements between the Parties. There are no unwritten or oral agreements between the Parties. 5 IN WITNESS WHEREOF, the Parties hereto have executed and delivered this instrument as of the date first above written. ECIC CORPORATION By: ------------------------------------- D. Martin Phillips, Vice President ENCAP ENERGY CAPITAL FUND III, L.P. By: EnCap Investments L.L.C., its general partner By: ------------------------------------- D. Martin Phillips, Senior Vice President ENCAP ENERGY ACQUISITION III-B, INC. By: ------------------------------------------- D. Martin Phillips, Vice President BOCP ENERGY PARTNERS, L.P. By: EnCap Investments L.L.C., Manager By: ------------------------------------------- D. Martin Phillips, Senior Vice President PEL-TEX PARTNERS L.L.C. By: DLJ LBO PLANS MANAGEMENT CORPORATION, Manager By: --------------------------------------- Michael Isikow, Director By: ------------------------------------------- Townes G. Pressler, Jr., Manager 6 EXHIBIT A LIST OF PRE-PAYOUT MEMBERS
PRE-PAYOUT MEMBER SEVERAL SHARE(1) LIMIT(2) - -------------------------------------------------------------------------------------------------------------------- ECIC Corporation 15.000000% $2,887,500.03 - ---------------------------------------------------- ------------------------------- ------------------------------- EnCap Energy Capital Fund III, L.P. 42.479001% $8,177,207.61 - ---------------------------------------------------- ------------------------------- ------------------------------- EnCap Energy Acquisition III-B, Inc. 32.126900% $6,184,428.26 - ---------------------------------------------------- ------------------------------- ------------------------------- BOCP Energy Partners, L.P. 10.394099% $2,000,864.10 - ---------------------------------------------------- ------------------------------- ------------------------------- TOTAL 100.000000% $19,250,000.00 - ---------------------------------------------------- ------------------------------- -------------------------------
(1) Represents each Pre-Payout Member's several share as referenced in Section 12.4(e) of the Agreement. (2) Represents the amount stipulated for each Pre-Payout Member as referenced in Section 12.4(f)(iii) of the Agreement. 7 EXHIBIT B CONSENT AND RELEASE By execution of this Consent and Release effective as of May 22, 2001, the undersigned, 3TEC ENERGY CORPORATION, for itself and as successor to the interests of MAGELLAN EXPLORATION, LLC, (i) acknowledges and evidences its consent to the terms and conditions of the attached Master Assignment and Assumption Agreement (the "Master Assignment") dated effective as of May 22, 2001 by and among ECIC CORPORATION, a Texas corporation ("ECIC"), ENCAP ENERGY CAPITAL FUND III, L.P., a Texas limited partnership ("Fund III"), ENCAP ENERGY ACQUISITION III-B, INC., a Texas corporation ("Acquisition"), BOCP ENERGY PARTNERS, L.P., a Texas limited partnership ("BOCP"), and PEL-TEX PARTNERS L.L.C., a Delaware limited liability company ("Pel-Tex") (ECIC, Fund III, Acquisition, and BOCP are referred to herein individually as an "EnCap Party" and collectively as the "EnCap Parties"), including, without limitation, the assignment of the indemnification obligations described in Section 2 thereof and the amendment of Exhibit A to the Merger Agreement (as defined therein); (ii) in consideration of the EnCap Parties' assumption of the Assumed Indemnification Obligations (as defined in the Master Assignment), hereby forever releases, acquits and forever discharges Pel-Tex from any and all such liability and obligations relating to Section 12.4 of the Merger Agreement (whether heretofore or hereafter accrued or existing) or the Assumed Indemnification Obligations; and (iii) acknowledges that its only recourse for indemnities and other obligations under Section 12.4 of the Merger Agreement shall be against the EnCap Parties in accordance with the Master Agreement. Further, the undersigned hereby agrees to issue replacement warrants for Warrant Certificate No. W-10 in connection with the transfer of such warrant as set forth in Section 3(a) of the Master Agreement upon presentment of such warrant certificate and appropriate documents for the transfer thereof. In witness whereof, the undersigned has executed and delivered this Consent and Release as of the date first above written. 3TEC ENERGY CORPORATION By: ------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- 8 EXHIBIT C WARRANT ASSIGNMENT For Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confirmed, value received, PEL-TEX PARTNERS L.L.C., a Delaware limited liability company ("Assignor"), hereby sells, assigns and transfers those certain 45,702 Warrants (each Warrant representing the right to purchase one share of Common Stock of 3TEC Energy Corporation (the "Company") at an exercise price of $30.00 per share), which are represented by Warrant Certificate No. W-10, together with all right, title and interest therein, unto the following parties (each an "Assignee") in the number of Warrants set forth beside their names: Assignee Number of Warrants -------- ------------------ ECIC CORPORATION 6,855 ENCAP ENERGY CAPITAL FUND III, L.P. 19,414 ENCAP ENERGY ACQUISITION III-B, INC. 14,683 BOCP ENERGY PARTNERS, L.P. 4,750 ------- TOTAL 45,702 Assignor does hereby irrevocably constitute and appoint the Secretary of the Company or such other officer of the Company that is duly authorized by the Company to effect a transfer of the above-referenced Warrants as attorney for the undersigned, to transfer said Warrants on the books of the Company, with full power of substitution. This Assignment is subject to the terms and provisions of that certain Master Assignment and Assumption Agreement dated effective May 22, 2001, by and between Assignor and Assignees. PEL-TEX PARTNERS L.L.C. By: DLJ LBO PLANS MANAGEMENT CORPORATION, Manager By: --------------------------------------- Michael Isikow, Director By: ------------------------------------------- Townes G. Pressler, Jr., Manager 9 Consented to as of May 22, 2001 by the undersigned. 3TEC ENERGY CORPORATION By: ------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- 10 EXHIBIT D ASSIGNMENT OF BACK-IN INTEREST 11 EX-10.10 4 h93139a3ex10-10.txt AGREEMENT TO DISSOLVE W/E ENERGY COMPANY LLC EXHIBIT 10.10 AGREEMENT TO DISSOLVE W/E ENERGY COMPANY L.L.C. THIS AGREEMENT TO DISSOLVE (this "Agreement") W/E ENERGY COMPANY L.L.C., a Delaware limited liability company (the "Company"), effective as of the 28th day of November, 2001, is entered into by and among EnCap Energy Capital Fund III, L.P., a Texas limited partnership ("EnCap III LP"), EnCap Energy Capital Fund III-B, L.P., a Texas limited partnership ("EnCap III-B LP"), ECIC Corporation, a Texas corporation ("ECIC"), and BOCP Energy Partners, L.P., a Texas limited partnership ("BOCP"). W I T N E S S E T H: WHEREAS, the Company was formed on August 26, 1999 as 3TEC Energy Company, LLC by filing a certificate of organization with the Secretary of State of Delaware; WHEREAS, EnCap III LP, EnCap III-B LP, ECIC, and BOCP, constituting all of the members of the Company (the "Members"), now desire to dissolve the Company, liquidate its assets, and wind up its affairs; and WHEREAS, the sole assets of the Company are securities and rights to purchase securities of 3TEC Energy Corporation. NOW, THEREFORE, in consideration of the premises, covenants, representations and agreements set forth in this Agreement, the Members do hereby agree and consent as follows: 1. Authority to Dissolve. The Members hereby agree to the dissolution of the Company pursuant to Section 9.1(b) of the Limited Liability Company Agreement of the Company (the "LLC Agreement"), which provides that the Company may be dissolved upon the written consent of the Members of the Company. 2. Appointment of Liquidator. In accordance with Section 9.3 of the LLC Agreement, David B. Miller is hereby designated to act as liquidator of the Company (the "Liquidator") to carry out the terms and conditions of this Agreement and the LLC Agreement and shall have all authority necessary to the performance of its duties in the course of liquidation. 3. Dissolution Procedures. The Liquidator shall proceed to wind up the affairs of the Company and liquidate and distribute the Company's assets according to the provisions of the Delaware Limited Liability Company Act and the allocation among Members set forth on Exhibit A hereto. 4. Covenant of Cooperation. The Members hereby agree and promise to do all things necessary, and to sign all documents necessary, to effect the dissolution, winding up, and termination of the Company. IN WITNESS WHEREOF, the undersigned have executed this Agreement dated as of November 28, 2001. EnCap Energy Capital Fund III, L.P. By: EnCap Investments L.L.C., its general partner By: ------------------------------------- David B. Miller, Managing Director EnCap Energy Capital Fund III-B, L.P. By: EnCap Investments L.L.C., its general partner By: ------------------------------------- David B. Miller, Managing Director Energy Capital Investment Company PLC By: ------------------------------------- Name: Gary R. Petersen Title: Director BOCP Energy Partners, L.P. By: EnCap Investments L.L.C., its manager By: ------------------------------------- David B. Miller, Managing Director EXHIBIT A ALLOCATION AMONG MEMBERS NAME: PERCENTAGE OF ASSETS ALLOCABLE TO SUCH MEMBER: EnCap Energy Capital Fund III, L.P. 42.479005% EnCap Energy Capital Fund III-B, L.P. 32.12694% Energy Capital Investment Company PLC 15% BOCP Energy Partners, L.P. 10.394055% -----END PRIVACY-ENHANCED MESSAGE-----