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                                                                     EXHIBIT 4.2

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into this 18th day of August, 1998, by and among Encore Acquisition
Partners, Inc., a Delaware corporation (together with its successors and
assigns, the "Company"), and each of the parties listed as Subscribers on the
execution page hereof (collectively, the "Subscribers" and, individually, a
"Subscriber").

         1. Background. The Company has agreed to issue (i) shares of its Class
A Common Stock, par value $0.01 per share (the "Class A Common Stock"), and (ii)
shares of its Class B Common Stock, par value $.01 per share (the "Class B
Common Stock," and, together with the Class A Stock, the "Capital Stock"),
pursuant to that certain Stock Purchase Agreement (the "Stock Purchase
Agreement") dated as of August 18, 1998 and made by and among the Company and
the Subscribers (the "Proposed Transaction"). The execution and delivery of this
Agreement is a condition to consummation of the Proposed Transaction.

         2. Registration under Securities Act, etc.

         2.1. Registration on Request.

                  (a) Registration of Immediate Offering. At any time after the
Initial Registration Date, Holders of Registrable Securities (the "Requisite
Holders") in compliance with Section 2.1(f) hereof may request registration by
the Company under the Securities Act of the resale by such Holders of all or any
portion of their Registrable Securities (an "Immediate Offering Registration");
provided, however, that such request for registration includes such number of
shares having an aggregate dollar value equal to or greater than 20% of the
Total Commitments (as defined in the Stock Purchase Agreement) funded during the
Takedown Period (as defined in the Stock Purchase Agreement), on the date of
request, for a Form S-1 registration and 10% of the Total Commitments funded
during the Takedown Period, on the date of request, for a Form S-3 registration.
A request for an Immediate Offering Registration shall specify the approximate
number of Registrable Securities requested to be registered by the requesting
Holders. Within 15 days after receipt of such request, the Company shall give
written notice of such requested registration to all other Holders of
Registrable Securities and shall include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 30 days after delivery of the Company's notice.

                  (b) Registration of Delayed or Continuous Offering. At any
time after the Initial Registration Date, the Requisite Holders may request
registration by the Company under the Securities Act of all or any portion of
their Registrable Securities for resale in a delayed or continuous offering to
the extent permitted by Rule 415 (or any successor rule thereto) under the
Securities Act (a "Shelf Registration"). A registration statement for a Shelf
Registration shall provide for resale by the Holders in the manner or manners
designated in writing to the Company by them (including, without limitation, one
or more underwritten offerings). Within 15 days after the receipt of such
request, the Company shall give similar written notice of such requested
registration to all other Holders of Registrable Securities and shall include in
such registration all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within 30 days after
delivery of the Company's notice.

                  (c) Notwithstanding anything to the contrary set forth in
Sections 2.1(a) and 2.1(b), the Company shall not be obligated to take any
action to notify holders or to effect any Immediate Offering Registration or
Shelf Registration (collectively, "Demand Registration") pursuant to Section
2.1(a) or

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2.1(b) if the Company shall have furnished to the Holders requesting
registration a certificate signed by both the President and the Chief Financial
Officer of the Company stating that, in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company (with
a brief explanation for the basis for such conclusion) for a registration
statement to be filed within the ninety (90) day period following receipt of the
request for registration and that it is therefore essential and in the best
interests of the Company and its stockholders to defer the filing of such
registration statement, provided that such filing shall neither be deferred
beyond the earlier to occur of ninety (90) days after receipt of the request
notice or the discontinuance of the perceived detriment to the Company nor more
than one (1) time in any continuous twelve (12) month period.

                  (d) Registration of Other Securities. Whenever the Company
shall effect a Demand Registration pursuant to this Section 2.1 in connection
with an underwritten offering by one or more holders of Registrable Securities,
no securities other than Registrable Securities shall be included among the
securities covered by such registration unless (i) the managing underwriter of
such offering shall have advised each holder of Registrable Securities to be
covered by such registration in writing that the inclusion of such other
securities would not adversely affect such offering or (ii) the Requisite
Holders shall have consented in writing to the inclusion of such other
securities.

                  (e) Registration Statement Form. Demand Registrations under
this Section 2.1 shall be on such appropriate registration form of the
Commission (i) as shall be selected by the Company and as shall be reasonably
acceptable to the Requisite Holders and (ii) as shall permit the disposition of
such Registrable Securities in accordance with the intended method or methods of
disposition specified in their request for such registration (provided, however,
that, the Company shall use Form S-3, if it shall qualify for the use of such
form). The Company agrees to include in any such registration statement all
information that holders of Registrable Securities being registered shall
reasonably request.

                  (f) Limitations on Requested Registrations. The Company's
obligation to take or continue any action to effect a requested registration
under this Section 2.1 shall be subject to the proviso that the Company shall
not be required to effect more than: (i) three (3) Immediate Offering
Registrations (provided, however, that no more than one (1) such registration
request shall be effected on Form S-1 and the remainder shall be effected on
Form S-3 or as Shelf Registrations) as requested by Warburg, Pincus Equity
Partners, L.P., (ii) two (2) Immediate Offering Registrations provided however,
that no more than one (1) such registration request shall be effected on Form
S-1 and the remainder shall be effected on Form S-3 or as Shelf Registrations)
as requested by Chase Venture Capital Associates, L.P., (iii) one (1) Immediate
Offering Registration on Form S-3 or Shelf Registration as requested by Natural
Gas Partners V, L.P. and (iv) one (1) Immediate Offering Registration on Form
S-3 or Shelf Registration as requested by First Union Capital Partners, Inc.;
provided that, a Demand Registration requested pursuant to this Section 2.1
shall not be deemed to have been effected (A) unless a registration statement
with respect thereto has been declared effective for a period of at least ninety
(90) days, (B) if after a registration statement has become effective, such
registration is interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason, or (C) if the conditions to closing specified in the purchase agreement
or underwriting agreement entered into in connection with such registration are
not satisfied, other than as a result of the voluntary termination of such
offering by the Requisite Holders (which shall include the failure of the
Requisite Holders to take action or to refrain from taking action necessary for
the conditions to closing to be satisfied).

                  (g) Selection of Underwriters. If a requested Demand
Registration pursuant to this Section 2.1 involves an underwritten offering, the
underwriter or underwriters thereof shall be selected by the Company, subject to
the approval of the Requisite Holders which shall not be unreasonably withheld.

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                  (h) Priority in Requested Registrations. If a Demand
Registration pursuant to this Section 2.1 involves an underwritten offering, and
the managing underwriter shall advise the Company in writing (with a copy to
each holder of Registrable Securities requesting registration) that, in its
opinion, the number of securities requested to be included in such registration
exceeds the number that can be sold in such offering within a price range
acceptable to the Requisite Holders, the Company will include in such
registration to the extent of the number that the Company is so advised can be
sold in such offering, Registrable Securities requested to be included in such
Demand Registration, pro rata among the Holders thereof requesting such
registration on the basis of the percentage of the Registrable Securities of the
Company held by the Holders of Registrable Securities that have requested that
such securities be included. In connection with any Demand Registration as to
which the provisions of this subsection (h) apply, no securities other than
Registrable Securities shall be covered by such Demand Registration; moreover,
such registration shall not reduce the number of available registrations under
subsection (f) of this Section 2.1 in the event that the managing underwriter
excludes from registration more than fifty percent (50%) of the aggregate number
of Registrable Securities requested to be included.

                  (i) Holdback Period. If required by the underwriter or
underwriters selected by the Company for such underwriting (collectively, the
"Underwriter"), then (i) all Holders proposing to distribute their Registrable
Securities through such underwriting shall, to the extent required by the
Underwriter, enter into an underwriting agreement with the Underwriter in
customary form, and (ii) all Holders (whether or not they propose to distribute
their Registrable Securities through such underwriting) shall agree not to sell
publicly any of their Registrable Securities for such period as the Underwriter
may reasonably request; provided that such period shall not exceed one hundred
eighty (180) continuous days.

         2.2. Incidental Registration.

                  (a) Right to Include Registrable Securities. At any time after
the Initial Registration Date, if the Company proposes to register any of its
securities under the Securities Act (other than (i) in connection with a
registration of securities issuable under any employee benefit, retirement or
similar plan, or (ii) with respect to a Rule 145 transaction, or (iii) pursuant
to Section 2.1), whether or not for sale for its own account (an "Incidental
Registration"), it will each such time give prompt written notice to all Holders
of Registrable Securities of its intention to effect such a registration and of
such holders' rights under this Section 2.2. Upon the written request of any
such Holder made within thirty (30) days after the receipt of any such notice
(which request shall specify the Registrable Securities intended to be disposed
of by such Holder and the intended method of disposition thereof), the Company
will use its best efforts to effect the registration under the Securities Act of
all Registrable Securities that the Company has been so requested to register by
the Holders thereof, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, provided that if, at any time after giving
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to each Holder of Registrable Securities
and, thereupon, (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
any Holder or Holders of Registrable Securities entitled to do so to request
that such registration be effected as a Demand Registration under Section 2.1,
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities, for the same period as the
delay in registering such other securities. No registration effected under this
Section 2.2 shall be deemed to have been effected pursuant to Section

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2.1 or shall relieve the Company of its obligation to effect any Demand
Registration upon request under Section 2.1.

                  (b) Priority in Incidental Registrations. If the Incidental
Registration is for a registered public offering involving an underwriting, the
Company shall so advise the Holders of Registrable Securities as a part of such
notice. In such event, the right of any Holder to registration pursuant to this
Section 2.2 shall be conditioned upon, and shall not be exercisable by any
Holder without, such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. If required by the Underwriter then (i) all Holders
proposing to distribute their Registrable Securities through such underwriting
shall, to the extent required by the Underwriter, enter into an underwriting
agreement with the Underwriter in customary form, and (ii) all Holders shall
agree not to sell publicly any of their Registrable Securities for such period
as the Underwriter may reasonably request, provided that such period shall not
exceed one hundred eighty (180) days. Notwithstanding any other provision of
this Section 2.2, if the Underwriter determines that marketing or other factors
require a limitation of the number of securities to be underwritten, then the
Underwriter in its sole discretion may exclude from such registration and
underwriting some or all of the securities requested to be included in such
registration and underwriting by Holders of Registrable Securities and other
parties other than the Company; provided, however, that if all securities
requested to be included in such registration and underwriting by holders of
Registrable Securities and parties other than the Company are not so excluded by
the Underwriter, then the number of such included securities shall be allocated
proportionately among all parties (prorated in proportion to the number of
shares of Class A Common Stock or Class B Common Stock owned by such parties)
having the right to request registration of securities (including Holders of
Registrable Securities). If securities requested to be registered by Holders of
Registrable Securities are excluded pursuant to this Section 2.2(b), such
exclusion shall be apportioned among such Holders pro rata based upon such
requesting Holder's total holdings of Registrable Securities, and not total
shares requested for inclusion in the registration. If any Holder of Registrable
Securities disapproves of the terms of any underwriting subject to this Section
2.2(b), then such Holder may elect to withdraw therefrom by written notice to
the Company and the Underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration. The Company shall advise
all persons seeking to include their securities in such registration and
underwriting of the number of each such person's securities that may be so
included.

         2.3. Registration Procedures. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 2.1 and 2.2, the Company will
as expeditiously as possible:

                  (i) prepare and (as soon thereafter as possible or in any
         event no later than ninety (90) days after the end of the period within
         which requests for registration may be given to the Company) file with
         the Commission the requisite registration statement to effect such
         registration and thereafter use its best efforts to cause such
         registration statement to become effective, provided that the Company
         may discontinue any registration of its securities that are not
         Registrable Securities (and, under the circumstances specified in
         Section 2.2(a), its securities that are Registrable Securities) at any
         time prior to the effective date of the registration statement relating
         thereto;

                  (ii) prepare and file with the Commission such amendments and
         supplements to such registration statement and the prospectus used in
         connection therewith as may be necessary to keep such registration
         statement effective and to comply with the provisions of the Securities
         Act with respect to the disposition of all securities covered by such
         registration statement until such time as all of such securities have
         been disposed of in accordance with the intended methods of disposition

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         by the seller or sellers thereof set forth in such registration
         statement; provided, however, that the Company shall not be required to
         maintain the effectiveness of any registration statement for more than
         one hundred twenty (120) days (or, with respect to a Shelf
         Registration, until such time as all of such securities have been
         disposed of in accordance with the intended methods of disposition by
         the seller or sellers thereof);

                  (iii) furnish to each seller of Registrable Securities covered
         by such registration statement such number of conformed copies of such
         registration statement and of each such amendment and supplement
         thereto, such number of copies of the prospectus contained in such
         registration statement (including each preliminary prospectus and any
         summary prospectus) and any other prospectus filed under Rule 424 under
         the Securities Act, in conformity with the requirements of the
         Securities Act, and such other documents, as such seller may reasonably
         request;

                  (iv) use its best efforts to register or qualify all
         Registrable Securities and other securities covered by such
         registration statement under such other securities or blue sky laws of
         such jurisdictions as each seller thereof shall reasonably request, to
         keep such registration or qualification in effect for so long as such
         registration statement remains in effect, and take any other action
         that may be reasonably necessary or advisable to enable such seller to
         consummate the disposition in such jurisdictions of the securities
         owned by such seller, except that the Company shall not for any such
         purpose be required to qualify generally to do business as a foreign
         corporation in any jurisdiction wherein it would not but for the
         requirements of this subdivision (iv) be obligated to be so qualified
         or to consent to general service of process in any such jurisdiction;

                  (v) use its best efforts to cause all Registrable Securities
         covered by such registration statement to be registered with or
         approved by such other governmental agencies or authorities as may be
         necessary to enable the seller or sellers thereof to consummate the
         disposition of such Registrable Securities;

                  (vi) furnish to each seller of Registrable Securities a signed
         counterpart, addressed to such seller (and underwriters, if any) of:

                           (A) an opinion of counsel for the Company, dated the
                  effective date of such registration statement (and, if such
                  registration includes an underwritten public offering, dated
                  the date of the closing under the underwriting agreement),
                  reasonably satisfactory in form and substance to such seller,
                  and

                           (B) a "comfort" letter, dated the effective date of
                  such registration statement (and, if such registration
                  includes an underwritten public offering, dated the date of
                  the closing under the underwriting agreement), signed by the
                  independent public accountants who have certified the
                  Company's financial statements included in such registration
                  statement,

         covering substantially the same matters with respect to such
         registration statement (and the prospectus included therein) and, in
         the case of the accountants' letter, with respect to events subsequent
         to the date of such financial statements, as are customarily covered in
         opinions of issuer's counsel and in accountants' letters delivered to
         the underwriters in underwritten public offerings of securities and, in
         the case of the accountants' letter, such other financial matters, and,
         in the case of the legal opinion, such other legal matters, as such
         seller may reasonably request;

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                  (vii) notify each seller of Registrable Securities covered by
         such registration statement, at any time when a prospectus relating
         thereto is required to be delivered under the Securities Act, upon
         discovery that, or upon the happening of any event as a result of
         which, the prospectus included in such registration statement, as then
         in effect, includes an untrue statement of a material fact or omits to
         state any material fact required to be stated therein or necessary to
         make the statements therein not misleading in the light of the
         circumstances under which they were made, and at the request of any
         such seller promptly prepare and furnish to such seller a reasonable
         number of copies of a supplement to or an amendment of such prospectus
         as may be necessary so that, as thereafter delivered to the purchasers
         of such securities, such prospectus shall not include an untrue
         statement of a material fact or omit to state a material fact required
         to be stated therein or necessary to make the statements therein not
         misleading in the light of the circumstances under which they were
         made;

                  (viii) otherwise use its best efforts to comply with all
         applicable rules and regulations of the Commission, and make available
         to its security holders, as soon as reasonably practicable, an earnings
         statement covering the period of at least twelve months, but not more
         than eighteen months, beginning with the first full calendar month
         after the effective date of such registration statement, which earnings
         statement shall satisfy the provisions of Section 11 (a) of the
         Securities Act, and will furnish to each such seller at least five (5)
         business days prior to the filing thereof a copy of any amendment or
         supplement to such registration statement or prospectus and shall not
         file any thereof to which any such seller shall have reasonably
         objected on the grounds that such amendment or supplement does not
         comply in all material respects with the requirements of the Securities
         Act or of the rules or regulations thereunder;

                  (ix) provide and cause to be maintained a transfer agent and
         registrar for all Registrable Securities covered by such registration
         statement from and after a date not later than the effective date of
         such registration statement;

                  (x) use its best efforts to list all Registrable Securities
         covered by such registration statement on any securities exchange on
         which any of the Registrable Securities is then listed; and

                  (xi) enter into such agreements and take such other actions as
         the Requisite Holders shall reasonably request in order to expedite or
         facilitate the disposition of such Registrable Securities.

The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.

         Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that upon receipt of any notice from the Company of the
happening of any event of the kind described in the subdivision (vii) of this
Section 2.3, such Holder will forthwith discontinue such Holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (vii) of this
Section 2.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice; provided, however that
the Company shall extend the time periods under Section 2.3(ii) by the amount of
time such Holder is required to discontinue such Holder's disposition of
Registrable Securities.

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         2.4 Underwritten Offerings.

                  (a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by Holders of Registrable Securities
pursuant to a Demand Registration, the Company and all sellers will enter into
an underwriting agreement with such underwriters for such offering, such
agreement to be satisfactory in substance and form to each such Holder and the
underwriters and to contain such representations and warranties by the Company
and such other terms as are generally prevailing in agreements of this type,
including, without limitation, indemnities to the effect and to the extent
provided in Section 2.6. The Holders of Registrable Securities to be distributed
by such underwriters shall be parties to such underwriting agreement and may, at
their option, require that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such Holders of Registrable Securities. Any such
Holder of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, such holder's Registrable Securities and such holder's intended method
of distribution and any other representation required by law.

                  (b) Incidental Underwritten Offerings. If the Company at any
time proposes to register any of its securities under the Securities Act
pursuant to an Incidental Registration and such securities are to be distributed
by or through one or more underwriters, the Company will, if requested by any
Holder of Registrable Securities as provided in Section 2.2 and subject to the
provisions of Section 2.2(b), arrange for such underwriters to include all the
Registrable Securities to be offered and sold by such Holder among the
securities to be distributed by such underwriters. The Holders of Registrable
Securities to be distributed by such underwriters shall be parties to the
underwriting agreement between the Company and such underwriters and may, at
their option, require that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such Holders of Registrable Securities. Any such
Holder of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Holder, such Holder's Registrable Securities and such Holder's intended method
of distribution and any other representation required by law.

         2.5 Preparation: Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Holders of Registrable
Securities registered under such registration statement, and their counsel and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such reasonable access to its books and records and such reasonable
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such Holders' counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.

         2.6 Indemnification.

                  (a) Indemnification by the Company. To the extent permitted by
law, the Company will indemnify each Holder, each of their respective officers
and directors and partners, and each person controlling a Holder within the
meaning of the Securities Act, with respect to which registration, qualification
or compliance has been effected pursuant to this Agreement, and each
underwriter, if any, each person who controls any underwriter within the meaning
of the Securities Act, and all Representatives (as defined in Section 3) of the
foregoing parties, against all expenses, claims, losses, damages or liabilities

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(or actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, to the extent such
expenses, claims, losses, damages or liabilities arise out of or are based on
any untrue statement (or alleged untrue statement) of a material fact contained
in any registration statement, prospectus, offering circular or other similar
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by the Company of the
Securities Act or any rule or regulation promulgated under the Securities Act
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each Holder and each
person controlling a Holder, each such underwriter, each person who controls any
such underwriter, and each Representative of such parties for any legal and any
other expenses reasonably incurred in connection with investigating, preparing
or defending any such claim, loss, damage, liability or action; provided,
however, that the indemnity contained herein shall not apply to amounts paid in
settlement of any claim, loss, damage, liability or expense if settlement is
effected without the consent of the Company (which consent shall not
unreasonably be withheld); provided, further, that the Company will not be
liable to a particular Holder or any controlling person of such Holder or their
respective Representatives in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, in reliance upon
and in conformity with written information furnished to the Company by such
Holder or such controlling person specifically for use therein. Notwithstanding
the foregoing, insofar as the foregoing indemnity relates to any such untrue
statement (or alleged untrue statement) or omission (or alleged omission) made
in the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the Commission at the time the registration statement
becomes effective or in the final prospectus filed with the Commission pursuant
to the applicable rules of the Commission or in any supplement or addendum
thereto and such new prospectus is delivered to the underwriter, the indemnity
agreement herein shall not inure to the benefit of such underwriter, any
controlling person of such underwriter and their respective Representatives, if
a copy of the final prospectus filed pursuant to such rules, together with all
supplements and addenda thereto, was not furnished to the person or entity
asserting the loss, liability, claim or damage at or prior to the time such
furnishing is required by the Securities Act.

                  (b) Indemnification by the Holders. To the extent permitted by
law, each Holder will, if securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being
effected pursuant to terms hereof, severally but not jointly, indemnify the
Company, each person who controls the Company or such underwriter within the
meaning of the Securities Act, and each other person selling the Company's
securities covered by such registration statement, and each of the
Representatives of the foregoing parties, each person controlling such persons
within the meaning of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by such Holder of any rule or regulation
promulgated under the Securities Act applicable to such Holder and relating to
action or inaction required of such Holder in connection with any such
registration, qualification or compliance, and will reimburse such persons for
any legal or other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
specifically for use therein; provided, however, that the indemnity contained
herein shall not apply to amounts paid in settlement of any claim, loss, damage,

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liability or expense if settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld). Notwithstanding the
foregoing, the liability of such Holder under this subsection (b) shall be
limited in an amount equal to the net proceeds from the sale of Registrable
Securities sold by such Holder, unless such liability arises out of or is based
on willful conduct by such Holder. In addition, insofar as the foregoing
indemnity relates to any such untrue statement (or alleged untrue statement) or
omission (or alleged omission) made in the preliminary prospectus but eliminated
or remedied in the amended prospectus on file with the Commission at the time
the registration statement becomes effective or in the final prospectus filed
pursuant to applicable rules of the Commission or in any supplement or addendum
thereto and such new prospectus is delivered to the underwriter, the indemnity
agreement herein shall not inure to the benefit of such underwriter, any
controlling person of such underwriter and their respective Representatives, if
a copy of the final prospectus filed pursuant to such rules, together with all
supplements and addenda thereto was not furnished to the person or entity
asserting the loss, liability, claim or damage at or prior to the time such
furnishing is required by the Securities Act.

                  (c) Notices of Claims, etc. Notwithstanding the foregoing
subsections (a) and (b), each party entitled to indemnification under this
Section 2.6 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or as
to which the Indemnifying Party is asserting separate or different defenses,
which defenses are inconsistent with the defenses of the Indemnified Party (in
which case the Indemnifying Party shall pay for one separate lead counsel (and
appropriate local counsel) for those Indemnified Parties with whom such conflict
exists). No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation or as a result of which injunctive or other equitable relief would be
imposed. No Indemnified Party shall consent to entry of any judgment or enter
into any settlement without the consent of each Indemnifying Party (not to be
unreasonably withheld). The failure of an Indemnifying Party to give notice to
the Indemnified Party of its election to assume and control the defense of any
action for which notice has been given to the Indemnifying Party in accordance
with this paragraph within 30 days after receipt of such notice shall constitute
an election by the Indemnifying Party not to assume and control the defense of
such action. An Indemnifying Party who is not entitled to, or elects not to,
assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one lead counsel (and appropriate local counsel) for all
parties indemnified by such Indemnifying Party with respect to such claim,
unless in the reasonable judgment of any Indemnified Party a conflict of
interest may exist between such Indemnified Party and any other of such
Indemnified Parties or the Indemnifying Party with respect to such claim, in
which event the Indemnifying Party shall be obligated to pay the fees and
expenses of one separate lead counsel (and appropriate local counsel) for such
Indemnified Parties.

                  (d) If the indemnification provided for in this Section 2.6 is
unavailable to an Indemnified Party in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or

                                        9
<PAGE>   10

payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party on the one hand, and the Indemnified Party on the
other, in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party on the one hand,
and the Indemnified Party on the other, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Indemnifying Party or by such Indemnified Party and
the parties' relevant intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and each Selling
Security Holder agree that it would not be just and equitable if contribution
pursuant to this Section were based solely upon the number of entities from whom
contribution was requested or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section.
Notwithstanding the provisions of this Section, no Selling Security Holder shall
be required to contribute any amount or make any other payments under this
Agreement which in the aggregate exceed the proceeds received by such Selling
Security Holder. No person guilty of fraudulent misrepresentation (within the
meaning of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

                  (e) The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Party or any officer, director or controlling
person of such Indemnified Party and shall survive the transfer of securities.

         2.8 Certain Information.

                  (a) Each Holder agrees, with respect to any Registrable
Securities included in any registration, to furnish to the Company such
information regarding such Holder, the Registrable Securities and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to herein.

                  (b) The failure of a Holder to furnish the information
requested pursuant to this Section 2.8 shall not affect the obligation of the
Company to any other selling security holders who furnish such information
unless, in the reasonable opinion of counsel to the Company, such failure
impairs or may impair the legality of the registration statement or the
underlying offering.

         2.9 Expenses. All Registration Expenses shall be paid by the Company.
All Selling Expenses shall be borne by the Holders of the Registrable Securities
in proportion to the number of Registrable Securities sold by such Holders.

         2.10 Holdback Agreement. If the Company at any time pursuant to Section
2.1 or 2.2 of this Agreement shall register under the Securities Act Registrable
Securities held by Investors for sale to the public pursuant to an underwritten
offering, the Company shall not, without the prior written consent of a majority
of Holders of Registrable Securities, effect any public sale or distribution of
securities similar to those being registered, or any securities convertible into
or exercisable or exchangeable for such securities, for such period as shall be
determined by the managing underwriters, which period shall not begin more than
ten (10) days prior to the effectiveness of the Registration Statement pursuant
to which such public offering shall be made and shall not last more than one
hundred eighty (180) days after the closing of sale of securities pursuant to
such Registration Statement.

                                       10
<PAGE>   11

         2.11 Lock-Up Period. If the Company at any time shall register shares
of Common Stock under the Securities Act in a primary underwritten offering
pursuant to Section 2.2 hereof (i) pursuant to the initial public offering on
the Initial Registration Date or (ii) pursuant to any other registration, the
Holders shall not sell, make any short sale of, grant any option for the
purchase of, or otherwise dispose of any Registrable Securities (other than
those Registrable Securities included in such registration pursuant to Section
2.2) without the prior written consent of the Company for a period as shall be
determined by the managing underwriters, which period cannot begin more than ten
(10) days prior to the effectiveness of such Registration Statement and cannot
last more than one hundred eighty (180) days after the effective date of such
Registration Statement for the Company's initial public offering and ninety (90)
days for all other registrations (provided, however, that the Holders shall not
be prevented from selling their respective Registrable Securities more than once
in any twelve (12) consecutive month period).

         3. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:

                  "Affiliate" of any specified Person means any other Person
                  which directly or indirectly through one or more
                  intermediaries controls, or is controlled by, or is under
                  common control with, such specified Person. For purposes of
                  this definition, "control" (including, with correlative
                  meanings, the terms "controlling," "controlled by" and "under
                  common control with"), as used with respect to any Person,
                  means the possession, directly or indirectly, of the power to
                  direct or cause the direction of the management or policies of
                  such Person, whether through the ownership of voting
                  securities, by agreement or otherwise; provided, however, that
                  beneficial ownership of at least 10% of the voting securities
                  of a Person shall be deemed to be control.

                  Commission: The Securities and Exchange Commission or any
                  other Federal agency at the time administering the Securities
                  Act.

                  Exchange Act: The Securities Exchange Act of 1934, or any
                  similar Federal statute, and the rules and regulations of the
                  Commission thereunder, all as the same shall be in effect at
                  the time. Reference to a particular section of the Securities
                  Exchange Act of 1934 shall include a reference to the
                  comparable section, if any, of any such similar Federal
                  statute.

                  Holder: Each of the Subscribers, their Affiliates and any of
                  their successors and assigns who hold Registrable Securities.

                  Initial Registration Date: The first to occur of the
                  following: (i) the date on which the Company consummates an
                  offering of its equity securities under a registration
                  statement to be filed with the Commission with respect to an
                  initial public offering of the Company's securities pursuant
                  to the Securities Act, or (ii) the sixth anniversary of the
                  date hereof.

                  Person: A corporation, an association, a partnership, a
                  business, an individual, a governmental or political
                  subdivision thereof or a governmental agency.

                  Register, registered, and registration: A registration
                  effected by preparing and filing a registration statement in
                  compliance with the Securities Act, and the declaration or
                  ordering by the Commission of the effectiveness of such
                  registration statement.

                                       11
<PAGE>   12

                  Registrable Securities: (i) The Class A Common Stock; (ii) the
                  Class B Common Stock and (iii) any Common Stock issued or
                  issuable at any time or from time to time in respect of any of
                  the interests specified in (i) through (iii) hereof upon a
                  stock split, stock dividend, recapitalization or other similar
                  event involving the Company, of any Holder, until such
                  Registrable Securities are registered pursuant to a
                  Registration Statement or until such securities are able to be
                  sold under Rule 144(k) (or successor Rule) under the
                  Securities Act without restriction.

                  Registration Expenses: All expenses incident to the Company's
                  performance of or compliance with Section 2.1 or 2.2,
                  including, without limitation, all registration, filing and
                  National Association of Securities Dealers, Inc. fees, all
                  fees and expenses of complying with securities or blue sky
                  laws, the fees and disbursements of counsel for the Company
                  and of its independent public accountants, including the
                  expenses of any special audits or "cold comfort" letters
                  required by or incident to such performance and compliance,
                  premiums and other costs of policies of insurance against
                  liabilities arising out of the public offering of the
                  Registrable Securities being registered, the fees and
                  disbursements of one counsel for Holders of Registrable
                  Securities for the first three (3) requested registrations
                  pursuant to Section 2.1 and any fees and disbursements of
                  underwriters customarily paid by issuers or sellers of
                  securities, but excluding Selling Expenses, if any.

                  Representative: The Representative of a Person shall be
                  broadly construed and shall include such Person's partners,
                  members, officers, directors, employees, agents, counsel,
                  accountants and other representatives.

                  Securities Act: The Securities Act of 1933, or any similar
                  federal statute, and the rules and regulations of the
                  Commission thereunder, all as of the same shall be in effect
                  at the time.

                  Selling Expenses: Underwriting discounts and selling
                  commissions and stock transfer taxes relating to securities
                  owned by selling Holders of Registrable Securities being
                  registered by the Company and the fees and disbursements paid
                  to Representatives retained by the Holders of Registrable
                  Securities to be registered (including, without limitation,
                  the fees and disbursements of legal counsel to the Holders of
                  such Registrable Securities, other than one counsel referred
                           to in the definition of Registration Expenses).

         4. Miscellaneous.

                  (a) No Inconsistent Agreements. The Company has not entered
into nor will the Company on or after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's other issued and outstanding securities, if any, under any such
agreements.

                  (b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this paragraph, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of (x)
Holders of at least 66 2/3% in aggregate number of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or
consent and (y) so long as he remains chief executive officer of the Company, I.
Jon Brumley (provided, however, that any such amendments,

                                       12
<PAGE>   13
modifications or waivers that would adversely affect the rights hereunder of any
Holder, in its capacity as a Holder, without similarly affecting the rights
hereunder of all Holders of the same class, in their capacities as Holders of
such class, shall not be effective as to such Holder without its prior written
consent); provided, however, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders of Registrable Securities may be given by the Holders of
a majority of the Registrable Securities proposed to be sold.

                  (c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery to such party at the address set forth opposite such party's name on
the signature page hereof and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 4(c).

                  All such notices and communications shall be deemed to have
been duly given: (i) at the time delivered by hand, if personally delivered,
five (5) business days after being deposited in the mail, postage prepaid, if
mailed; (ii) when answered back, if telexed; (iii) when receipt is acknowledged,
if telecopied; and (iv) on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.

                  (d) Successors and Assigns. This Agreement shall inure to the
benefit of any successor, assign or transferee of any Holder so long as such
holder agrees in writing to be bound by this Agreement; provided however, that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Securities in violation of the terms and conditions
of this Agreement, the Stock Purchase Agreement or the Stockholders' Agreement.

                  (e) Rule 144 and Rule 144A: If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of the
Securities Act, the Company will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder (or, if the Company is not required to file
such reports, will, upon the request of any holder of Registrable Securities,
make publicly available other information) and will take such further action as
any holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may
be amended from time to time or (b) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any holder of Registrable
Securities, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements. In order to permit the holders
of Registrable Securities to sell the same, if they so desire, pursuant to Rule
144A promulgated by the Commission (or any successor to such rule), the Company
will comply with all rules and regulations of the Commission applicable in
connection with use of Rule 144A (or any successor thereto). Prospective
transferees of Registrable Securities that are Qualified Institutional Buyers
(as defined in Rule 144A) that would be purchasing such Registrable Securities
in reliance upon Rule 144A may request from the Company information regarding
the business, operations and assets of the Company. Within five (5) business
days of any such request, the Company shall deliver to any such prospective
transferee copies of annual audited and quarterly unaudited financial statements
of the Company and such other information as may be required to be supplied by
the Company for it to comply with Rule 144A.

                                       13
<PAGE>   14

                  (f) Counterparts. This Agreement may be executed by the
parties hereto in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement. Each
counterpart may consist of a number of copies hereof each signed by less than
all, but together signed by all, the parties hereto.

                  (g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                  (h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF DELAWARE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

                  (i) (i) The parties hereto hereby irrevocably submit to the
exclusive jurisdiction of the courts of the State of Delaware and the federal
courts of the United States of America located in Delaware, and appropriate
appellate courts therefrom, over any dispute arising out of or relating to this
Agreement or any of the transactions contemplated hereby, and each party hereby
irrevocably agrees that all claims in respect of such dispute or proceeding may
be heard and determined in such courts. The parties hereby irrevocably waive, to
the fullest extent permitted by applicable law, any objection which they may now
or hereafter have to the laying of venue of any dispute arising out of or
relating to this Agreement or any of the transactions contemplated hereby
brought in such court or any defense of inconvenient forum for the maintenance
of such dispute. Each of the parties hereto agrees that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided bylaw. This consent to jurisdiction is being given solely
for purposes of this Agreement and is not intended to, and shall not, confer
consent to jurisdiction with respect to any other dispute in which a party to
this Agreement may become involved.

                      (ii) Each of the parties hereto hereby consents to process
being served by any party to this Agreement in any suit, action, or proceeding
of the nature specified in subsection (a) above by the mailing of a copy thereof
in the manner specified by the provisions of Section 12.1 of the Stock Purchase
Agreement.

                      (iii) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT.

                  (j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

                  (k) Entire Agreement. This Agreement, together with the
Subscription Agreement, is intended by the parties as a final expression of
their agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.

                  (l) Termination. This Agreement shall terminate when no
Registrable Securities remain outstanding.

                                       14
<PAGE>   15

                  (m) Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not limit or otherwise affect the meaning hereof.

                  (n) Specific Performance. The parties hereto recognize and
agree that money damages may be insufficient to compensate the holders of any
Registrable Securities for breaches by the Company of the terms hereof and,
consequently, that the equitable remedy of specific performance of the terms
hereof will be available in the event of any such breach.

                                       15
<PAGE>   16

         IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed and delivered by their respective representatives
thereunto duly authorized, as of the date first above written.

                                    COMPANY:

                                    ENCORE ACQUISITION PARTNERS

                                    By: /s/ JON BRUMLEY
                                        ------------------------------
                                    Name:   I. Jon Brumley
                                    Title.  Chairman of the Board and Chief
                                            Executive Officer

                                    SUBSCRIBERS:

                                    CHASE VENTURE CAPITAL ASSOCIATES, L.P.

                                    By: /s/ ARNOLD L. CHAVKIN
                                        -----------------------------------
                                    Name:   Arnold L. Chavkin
                                    Title:  General Partner

                                    WARBURG, PINCUS EQUITY PARTNERS, L.P.

                                    By: /s/ HOWARD H. NEWMAN
                                        ----------------------------------
                                    Name:   Howard H. Newman
                                    Title:  Managing Director

                                    NATURAL GAS PARTNERS V, L.P.

                                    By: G.F.W. Energy V, L.P., its general
                                        partner

                                    By: GFW V, L.L.C., its general partner

                                    By: /s/
                                        -----------------------------------
                                    Name:
                                    Title:

                                    FIRST UNION CAPITAL PARTNERS, INC.

                                    By: /s/ DAVID B. CARSON
                                        ---------------------------------
                                    Name:   David B. Carson
                                    Title:  Senior Vice President

                                       16
<PAGE>   17

                                        /s/ I. JON BRUMLEY
                                    ---------------------------------
                                    I. Jon Brumley

                                        /s/ JON S. BRUMLEY
                                    ---------------------------------
                                    Jon S. Brumley

                                        /s/ BRUCE B. SELKIRK
                                    ---------------------------------
                                    Bruce B. Selkirk, III

                                        /s/ GENE CARLSON
                                    ---------------------------------
                                    Gene Carlson

                                        /s/ KYLE SCHULTZ
                                    ---------------------------------
                                    Kyle Schultz

                                       17<PAGE>   1
                                                                   EXHIBIT 4.3

                        ENCORE ACQUISITION PARTNERS, INC.

                             STOCKHOLDERS' AGREEMENT

                           DATED AS OF AUGUST 18, 1998

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                          Page
<S>                                                                                                      <C>
ARTICLE I

         DEFINITIONS AND RELATED MATTERS                                                                     1
         Section 1.1  Definitions                                                                            1
         Section 1.2  Related Definitional Matter                                                            5
         Section 1.3  Capital Stock Subject to Agreement                                                     5

ARTICLE II

         STOCKHOLDERS, CAPITAL STRUCTURE,
         OTHER STOCKHOLDER MATTERS                                                                           5
         Section 2.1  Stockholders                                                                           5
         Section 2.2  Preemptive Rights for Equity Securities Issued by the Company                          5
         Section 2.3  Initial Public Offering                                                                7

ARTICLE III

         RESTRICTIONS ON DISPOSITIONS OF CAPITAL STOCK                                                       8
         Section 3.1  Restrictions on Dispositions                                                           8
         Section 3.2  Permitted Transfers                                                                    9
         Section 3.3  Notice of Right of First Refusal                                                       9
         Section 3.4  Primary Right of First Refusal by the Company                                          9
         Section 3.5  Secondary Right of First Refusal by Other Stockholders)                               10
         Section 3.6  Purchase Price                                                                        10
         Section 3.7  Compliance Required                                                                   10
         Section 3.8  Certain Rights of Inclusion                                                           11
         Section 3.9  Drag-Along Rights                                                                     11
         Section 3.10 Endorsement of Stock Certificates                                                     13
         Section 3.11 Specific Performance                                                                  13

ARTICLE IV

         COMPANY REPURCHASE RIGHTS                                                                          13
         Section 4.1  Vesting of Management Stock                                                           13
         Section 4.2  Repurchase Option                                                                     14
         Section 4.3  Class B Common Stock                                                                  16
         Section 4.4  Buyback of Certain Shares of Common Stock                                             16

ARTICLE V

         SPECIAL MANAGEMENT/GOVERNANCE PROVISIONS                                                           18
         Section 5.1  Certificate of Incorporation; No Conflict With Agreement                              18
         Section 5.2  Board of Directors                                                                    19
         Section 5.3  Removal                                                                               19
         Section 5.4  Vacancies                                                                             20
         Section 5.5  Covenant to Vote                                                                      20
</TABLE>

<PAGE>   3

<TABLE>
<S>                   <C>
         Section 5.6  Designation of Proxy                              20
         Section 5.7  Management Compensation                           20
         Section 5.8  Financial Reports                                 20
         Section 5.9  Non-Management Options                            21
         Section 5.10 Investor Stockholder Rights                       21
         Section 5.11 Voting Rights                                     22
         Section 5.12 Regulatory Matters                                23

ARTICLE VI

         MISCELLANEOUS                                                  23
         Section 6.1  Manner of Giving Notice                           23
         Section 6.2  Waiver of Notice                                  23
         Section 6.3  Counterpart Signatures                            24
         Section 6.4  Severability                                      24
         Section 6.5  Joinder of Spouses                                24
         Section 6.6  Entire Agreement; Amendments                      24
         Section 6.7  Governing Law and Venue                           24
         Section 6.8  Consent to Jurisdiction                           25
         Section 6.9  Binding Effect                                    25
         Section 6.10 Future Actions                                    25
         Section 6.11 Headings; Exhibits                                25
         Section 6.12 Termination                                       25
</TABLE>

                                       ii
<PAGE>   4

                             STOCKHOLDERS' AGREEMENT

         THIS STOCKHOLDERS' AGREEMENT (the "Agreement") is made and entered into
this 18th day of August, 1998, between Encore Acquisition Partners, Inc., a
Delaware corporation (the "Company"), and the stockholders of the Company whose
names appear on the signature page hereto (collectively, the "Stockholders").

                                   WITNESSETH:

         WHEREAS, the Company is incorporated under the laws of the State of
Delaware with an authorized capitalization of (i) 375,000 shares of common
stock, par value $0.01 per share (the "Common Stock"), consisting of 75,000
shares of Class A Common Stock (the "Class A Common Stock") and 300,000 shares
of Class B Common Stock (the "Class B Common Stock") and (i) 1,000 shares of
Preferred Stock (the "Preferred Stock"); and

         WHEREAS, each Stockholder is the owner of the number of shares of such
issued and outstanding Common Stock of the Company set forth opposite its name
on Exhibit A which shall be amended from time to time to reflect the shares
owned by the Stockholders, their Permitted Transferees and additional
stockholders hereunder; and

         WHEREAS, each of the Stockholders has entered into the Stock Purchase
Agreement by and among the Company and the Stockholders (the "Stock Purchase
Agreement") and has executed a Subscription Agreement with the Company of even
date herewith (collectively, the "Subscription Agreements"), pursuant to which
such Stockholder has subscribed (pursuant to the Stock Purchase Agreement, the
Subscription Agreements and the Bylaws) to purchase shares of Common Stock from
the Company; and

         WHEREAS, the parties hereto deem it in their best interests and in the
best interests of the Company to set forth their respective rights and
obligations in connection with their investment in the Company; and

         WHEREAS, the parties hereto also desire to restrict the sale,
assignment, transfer, encumbrance or other disposition of the shares of the
Common Stock of the Company, as well as shares of capital stock that may be
issued hereafter, and to provide for certain rights and obligations in respect
thereto as hereinafter provided;

         NOW, THEREFORE, for and in consideration of the mutual agreements and
understandings set forth herein, the parties hereby agree as follows:

                                    ARTICLE I

                         DEFINITIONS AND RELATED MATTERS

         SECTION 1.1 DEFINITIONS. When used in this Agreement, the following
terms shall have the respective meanings set forth below:

         "AFFILIATE" shall mean, when used with respect to a specified Person,
any Person which (a) directly or indirectly controls, is controlled by or is
under common control with such specified Person, (b) is an officer, director,
general partner, trustee or manager of such Person, or of a Person described in
clause (a) of this sentence or (c) is a Relative of such specified Person or of
an individual described in clauses (a) or (b) of this sentence. As used in this
definition, the term "control" means possession, directly or indirectly (through

                                       1

<PAGE>   5

one or more intermediaries), of the power to direct or cause the direction of
management and policies of a Person through an ownership of 80% or more of the
outstanding voting interests of such Person, or through the power to appoint,
elect or direct the vote of, a majority of the members of the governing body of
such Person whether by contract, voting trust or other agreement. "Relative"
shall mean, with respect to any individual, (i) such individual's spouse, (ii)
any direct descendent, parent, grandparent, great grandparent or sibling (in
each case, whether by blood or adoption) of such individual or such individual's
spouse, and (iii) any spouse of a person described in clause (ii) of this
sentence.

         "BYLAWS" shall mean the Company's bylaws, certified by the secretary of
the Company, a copy of which is attached hereto as Exhibit B.

         "CAUSE" shall mean discharge by the Company on the following grounds:

                  (i) An employee's or director's conviction or plea of nolo
         contendere in a court of law of any crime or offense, which conviction
         or plea of nolo contendere makes him unfit for continuing employment,
         prevents him from effective management of the Company or materially
         adversely affects the reputation or business activities of the Company.

                  (ii) Willful misconduct which materially adversely affects the
         reputation or business activities of the Company and which continues
         after written notice thereof from the Board of Directors of the Company
         to such employee or director stating with specificity the alleged
         dishonesty or misconduct and, if requested by the employee within 10
         days thereafter, such employee is afforded a reasonable opportunity to
         be heard before the Board of Directors of the Company.

                  (iii) Substance abuse, including abuse of alcohol or use of
         illegal narcotics, and other drugs or substances, for which such
         employee or director fails to undertake and maintain treatment after 15
         days after requested by the Company.

                  (iv) Misappropriation of funds or other material acts of
         dishonesty involving the Company.

                  (v) Any employee's continuing material failure or refusal to
         perform his duties or to carry out in all material respects the lawful
         directives of the Board of Directors of the Company; provided that
         discharge pursuant to this subparagraph (v) shall constitute discharge
         for cause only if such employee has first received written notice from
         the Board of Directors of the Company stating with specificity the
         nature of such failure or refusal and, if requested by such employee
         within 10 days thereafter, such employee is afforded a reasonable
         opportunity to be heard before the Board of Directors of the Company.

         "CERTIFICATE OF INCORPORATION" shall mean the Company's Amended and
Restated Certificate of Incorporation, a copy of which is attached hereto as
Exhibit C, as may be amended from time to time.

         "CLASS A COMMON STOCK" shall have the meaning set forth in the
preamble.

         "CLASS B COMMON STOCK" shall have the meaning set forth in the
preamble.

         "COMMON STOCK" shall mean the Class A Common Stock and the Class B
Common Stock.

                                       2
<PAGE>   6

         "DEFAULTING STOCKHOLDER" shall have the meaning set forth in Section
4.2(a) of the Stock Purchase Agreement, and such Stockholder shall be a
Defaulting Stockholder for the purpose of such Capital Call and for all
subsequent Capital Calls.

         "DISABILITY" shall mean the total and permanent disability (whether
physical or mental) of any Management Stockholder as determined by the Board of
Directors, in good faith, 120 days from the commencement of such disability.

         "DISPOSITION" shall mean any sale, assignment, hypothecation, gift,
inter vivos transfer, pledge, mortgage or other encumbrance, or any other
disposition of capital stock of the Company whatsoever, whether voluntary or
involuntary; provided, however, that a Disposition shall not include a
Participation.

         "EQUIVALENT PRICE" shall mean in the case (a) where a share of Class A
Common Stock is being transferred, then the Equivalent Price for a share of
Class B Common Stock shall be the price of such share of Class A Common Stock
plus the amount of the then-outstanding Liquidation Preference (as such term is
defined in the Certificate of Incorporation) of such share of Class B Common
Stock and (b) where a share of Class B Common Stock is being transferred, then
the Equivalent Price for a share of Class A Common Stock shall be the price of
such share of Class B Common Stock less the amount of the then-outstanding
Liquidation Preference of such share of Class B Common Stock.

         "INITIAL PUBLIC OFFERING" shall mean the first registered public
offering of equity securities of the Company effected by the Company or one or
more Stockholders pursuant to a registration statement that has been declared
effective under the Securities Act.

         "INVESTOR STOCKHOLDERS" shall mean the Stockholders designated as such
on Exhibit A.

         "MANAGEMENT STOCK OWNERSHIP PLAN" shall mean that certain Management
Stock Ownership Plan adopted by the Company on even date herewith pursuant to
which the Management Stockholders will have the right to purchase shares of
Common Stock.

         "MANAGEMENT STOCKHOLDERS" shall mean the Stockholders designated as
such on Exhibit A.

         "NON-PARTICIPATING STOCKHOLDER" shall have the meaning set forth in
Section 4.1 of the Stock Purchase Agreement, and such Stockholder shall be a
Non-Participating Stockholder for the purpose of such Capital Call and for all
subsequent Capital Calls.

         "ORIGINAL COST" means, (i) with respect to a particular share of Class
A Common Stock, at any particular date, the amount originally paid to the
Company to purchase such share plus any capital contributions allocable to such
share pursuant to Article III of the Stock Purchase Agreement and (ii) with
respect to a particular share of Class B Common Stock, at any particular date,
the Unreturned Original Cost thereof plus the Unpaid Yield therein (as such
terms are defined in the Certificate of Incorporation).

         "PARTICIPATION" means a method, contract, arrangement or device
permitted in Section 3.1(e)(ii) of the Stock Purchase Agreement by which a
Stockholder retains nominal ownership and voting control of certain shares of
Common Stock owned by such Stockholder, but a Person other than such Stockholder
funds any or all Capital Calls made pursuant to Article III of the Stock
Purchase Agreement on such shares of Common Stock.

         "PERMITTED TRANSFEREE" with respect to a transferor Stockholder means
(i) the spouse of the transferor Stockholder, (ii) a trust, or family
partnership, the sole beneficiary of which is the transferor Stockholder, the
spouse of or, any Person related by blood or adoption to, the transferor
Stockholder, (iii) the

                                       3
<PAGE>   7

partners or stockholders of an Investor Stockholder, and in the case of an
Investor Stockholder that is an Affiliate of a state or national banking
institution (including Chase Venture Capital Associates, L.P. and First Union
Capital Partners, Inc.), any Affiliate described in clause (a) of the definition
thereof; provided that a Permitted Transferee under this clause (iii) may not
compete with the Company directly or indirectly or engage in any aspect of the
oil and gas industry other than providing financing to or investing in
businesses within such industry or (iv) any other transferee where such transfer
was made in compliance with this Agreement; provided, however, that any such
transfer does not conflict with or constitute a violation of state or federal
securities laws.

         "PERSON" shall mean an individual, partnership, limited partnership,
limited liability company, foreign limited liability company, trust, estate,
corporation, custodian, trustee-executor, administrator, nominee or entity in a
representative capacity.

         "PERSONAL REPRESENTATIVE" shall mean the executor, administrator,
guardian, or other personal representative of any natural person who has become
deceased or subject to Disability, or any successor or assignee thereof whether
by operation of law or otherwise.

         "PROPORTIONATE PERCENTAGE" means, with respect to a Stockholder, a
fraction (expressed as a percentage) the numerator of which is the number of
Shares held by such Stockholder and the denominator of which is (i) in a
situation where the Proportionate Percentage is being calculated with respect to
all Stockholders, the total number of Shares held by all Stockholders at the
time in question and (ii) in a situation where the Proportionate Percentage is
being calculated with respect to a particular group of Stockholders, the total
number of Shares held by the members of such group.

         "REQUISITE STOCKHOLDERS" shall mean (a) if I. Jon Brumley is chief
executive officer of the Company, then I. Jon Brumley and the Investor
Stockholders holding 75% of the Class B Common Stock held by all Investor
Stockholders (other than Non-Participating Stockholders and Defaulting
Stockholders), or (b) in the event I. Jon Brumley is not chief executive officer
of the Company, then 66% of all of the Shares of Common Stock held by all
Stockholders (other than Non-Participating Stockholders and Defaulting
Stockholders); provided however, that any vote requiring the Requisite
Stockholders' approval which adversely affects the rights of any Stockholder
(including a Non-Participating Stockholder or Defaulting Stockholder), in its
capacity as Stockholder, without adversely affecting the rights of all
Stockholders of the same class (i.e., Management Stockholders or Investor
Stockholders), in their capacities as Stockholders of such class, shall not be
effective as to such Stockholder without its written consent.

         "SALE OF THE COMPANY" means sale of (i) all or substantially all the
capital stock of the Company or (ii) all or substantially all of the assets of
the Company, determined on a consolidated basis, in each case to a Person or
group of Persons who are not Affiliates (as such term is defined in the Bylaws
rather than in this Agreement) of any Investor Stockholder, whether by way of
merger, share exchange, consolidation, sale of stock or assets, or otherwise.

         "SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time to time and any successor statute thereto.

         "SHARES" means shares of Class A Common Stock and Class B Common Stock.

         "UNVESTED SHARES" means shares of Management Stock that are not Vested
Shares.

         "VALUATION METHOD" shall mean that (i) cash shall be valued at the
amount of such cash; (ii) notes shall be valued at the fair market value of such
notes (giving due regard to the interest rate on such notes, the maturity date
of such notes and whether such notes are secured or subordinated) with any
disputes as to the

                                       4
<PAGE>   8

valuation of such notes to be settled by the managing underwriter of the Initial
Public Offering; (iii) common stock (whether voting or non-voting) shall be
valued at the price at which Class A Common Stock or common stock issued in
exchange for Class A Common Stock or Class B Common Stock shall be sold to the
public in the Initial Public Offering (or the mid-point of the proposed price
range if the Stockholders are not legally permitted to establish such value at
or after the pricing of the Initial Public Offering or if establishing such
value at or after the pricing of the Initial Public Offering would have adverse
liquidity, sale timing or other consequences (as reasonably determined by the
Investor Stockholders based upon the written opinion of counsel) under the
Securities Act or the Securities Exchange Act of 1934 on any of the Investor
Stockholders), and (iv) other securities of the Company shall be valued by
agreement among the Company and the Requisite Stockholders, and any disputes as
to such securities' value shall be settled by the managing underwriter of the
Initial Public Offering after the opportunity for the Company and the Requisite
Stockholders to present information to such underwriter as to the value of such
securities; provided, however, that if the managing underwriter is an Affiliate
of any Stockholder, any such disputes shall be settled only by the agreement of
the Requisite Stockholders.

         "VESTED SHARES" means shares of Management Stock that have become
vested pursuant to Section 4.1.

         SECTION 1.2 RELATED DEFINITIONAL MATTERS. As used in this Agreement,
pronouns in masculine, feminine and neuter genders shall be construed to include
any other gender, and words in the singular form shall be construed to include
the plural and vice versa, unless the context clearly otherwise requires. As
used in this Agreement, the term "including" shall be construed to be expansive
rather than limiting in nature and to mean "including, without limitation,"
except where the context clearly otherwise requires.

         SECTION 1.3 CAPITAL STOCK SUBJECT TO AGREEMENT. This Agreement shall
extend and apply to all shares of capital stock now owned by each of the
Stockholders and to all shares of capital stock as may hereafter be acquired by
any of the Stockholders, whether such shares constitute the separate property or
community property of any of the individual Stockholders, and regardless of the
capacity in which title to such shares is held or taken. This Agreement shall
also apply to all shares of capital stock to which the spouse of any Stockholder
is entitled by virtue of any community property or any other laws.

                                   ARTICLE II

                        STOCKHOLDERS, CAPITAL STRUCTURE,
                            OTHER STOCKHOLDER MATTERS

         SECTION 2.1 STOCKHOLDERS. The Stockholders of the Company and the
number of shares of capital stock held by each are set forth in Exhibit A as
such exhibit may be amended and updated from time to time.

         SECTION 2.2 PREEMPTIVE RIGHTS FOR EQUITY SECURITIES ISSUED BY THE
COMPANY.

         (a) Except in the case of Excluded Securities (as hereinafter defined),
the Company shall not, and shall cause its subsidiaries not to, issue, sell or
exchange, agree to issue, sell or exchange, or reserve or set aside for
issuance, sale or exchange any of its equity securities (including without
limitation any Shares or rights to acquire such Shares, whether or not
immediately exercisable and whether evidenced by an option, warrant, convertible
security or other instrument or agreement) (collectively, "Stock"), unless in
each case the Company shall have first offered or caused such subsidiary to
offer (the "Preemptive Offer") to sell such Stock to the Stockholders (the
"Offered Securities") by delivery to such Stockholders of written notice of such
offer stating the Company or subsidiary, as the case may be, proposes to sell
such Offered Securities, the number or amount of the Offered Securities proposed
to be sold, the proposed purchase price therefor and

                                       5

<PAGE>   9

any other terms and conditions of such offer. The Preemptive Offer shall by its
terms remain open and irrevocable for a period of 20 days from the date it is
delivered by such Company (the "Preemptive Offer Period").

         (b) Each Stockholder shall have the option, exercisable at any time
during the Preemptive Offer Period by delivering written notice to the Company
(a "Preemptive Offer Acceptance Notice"), to subscribe for (i) the number or
amount of such Offered Securities up to its Proportionate Percentage of the
total number or amount of Offered Securities proposed to be issued and (ii) up
to its Proportionate Percentage of the Offered Securities not subscribed for by
other Stockholders as specified in its Preemptive Offer Acceptance Notice;
provided, however, that in the event that the Company makes a Preemptive Offer
in connection with a Capital Call (as such term is defined in the Stock Purchase
Agreement) that will cause the termination of the Takedown Period when such
Capital Call is funded, the Proportionate Percentage of any Non-Participating
Stockholder or Defaulting Stockholder for purposes of this Section 2.2 shall be
calculated as if such Stockholder sold the requisite Shares as required under
Section 4.4 prior to the making of the Preemptive Offer. Any Offered Securities
not subscribed for by a Stockholder shall be deemed to be re-offered to and
accepted by the Stockholders exercising their options specified in clause (ii)
of the immediately preceding sentence with respect to the lesser of (A) the
amount specified in their respective Preemptive Offer Acceptance Notices and (B)
an amount equal to their respective Proportionate Percentages with respect to
such deemed offer. Such deemed offer and acceptance procedures described in the
immediately preceding sentence shall be deemed to be repeated until either (x)
all of the Offered Securities are accepted by the Stockholders or (y) no
Stockholder desires to subscribe for more Offered Securities. The Company shall
notify each Stockholder within five days following the expiration of the
Preemptive Offer Period of the number or amount of Offered Securities which such
Stockholder has subscribed to purchase.

         (c) If Preemptive Offer Acceptance Notices are not given by the
Stockholders for all the Offered Securities, the Company shall have 180 days
from the expiration of the Preemptive Offer Period to sell all or any part of
such Offered Securities as to which Preemptive Offer Acceptances Notices have
not been given by the Stockholders (the "Refused Securities") to any other
Persons, but only upon terms and conditions in all material respects, including
price, which are no more favorable, in the aggregate, to such other Persons or
less favorable to the Company than those set forth in the Preemptive Offer. Upon
the closing, which shall include full payment to the Company, of the sale to
such other Persons of all the Refused Securities, the Stockholders shall
purchase from the Company, and the Company shall sell to the Stockholders, the
Offered Securities with respect to which Preemptive Offer Acceptance Notices
were delivered by the Stockholders, at the terms specified in the Preemptive
Offer. In each case, any Offered Securities not purchased by the Stockholders or
any other Persons in accordance with this Section 2.2 may not be sold or
otherwise disposed of until they are again offered to the Stockholders under the
procedures specified in this Section 2.2.

         (d) The rights of the Stockholders under this Section 2.2 shall not
apply to the following Securities (the "Excluded Securities"):

                  (i) Stock issued to officers, employees or directors of, or
         consultants to, the Company or its subsidiaries pursuant to the terms
         of any stock option or similar stock incentive plan adopted by the
         Board of Directors of the Company (including the 1998 Stock Option Plan
         and the Management Stock Ownership Plan);

                  (ii) Stock issued as consideration as an "equity kicker" in
         connection with any debt financing;

                  (iii) Stock issued as consideration to the sellers in
         connection with an acquisition by the Company;

                                       6
<PAGE>   10

                  (iv) Stock issued upon the exercise or conversion of any Stock
         issued in compliance with this Section 2.2 or in accordance with
         Section 2.3 hereof;

                  (v) Stock issued in an Initial Public Offering;

                  (vi) Stock issued as a stock dividend or upon any stock split
         or other pro-rata subdivision or combination of the Stock; and

                  (vii) Stock issued to any Person that is not a Stockholder or
         an Affiliate (as such term is defined in the Bylaws rather than in this
         Agreement) of any Stockholder, so long as the Requisite Stockholders
         have approved the waiver of the pre-emptive rights with respect to such
         issuance.

         SECTION 2.3 INITIAL PUBLIC OFFERING.

         (a) In the event that the requisite number of Investor Nominees or
Investor Stockholders approve an Initial Public Offering, the Stockholders will
take all necessary or desirable actions in connection with the consummation of
the Initial Public Offering. Prior to the consummation of the Initial Public
Offering, the Board of Directors, with the assistance of the managing
underwriters of the Initial Public Offering, shall (i) determine in their
reasonable opinion the fair value of the Company (on an enterprise basis) and in
doing so shall take into account such factors as they consider fair and
reasonable in the circumstances, and (ii) following such determination of the
fair value of the Company, calculate the amount that would be paid to each class
of capital stock if an amount equal to the aforementioned fair value of the
Company was distributed on the anticipated closing date of the Initial Public
Offering by the Company in complete liquidation pursuant to the rights and
preferences set forth in the Certificate of Incorporation as in effect at the
time (giving effect to applicable orders of priority and the provisions of the
various agreements relating to stock or options of the Company).

         (b) After the determinations in (i) and (ii) of Section 2.3(a) have
been made and written notice thereof has been delivered to the Stockholders, the
Company and the Investor Stockholders shall negotiate, in good faith, the
consideration to be provided to holders of Class B Common Stock to redeem all
the issued and outstanding shares of Class B Common Stock, as a condition to,
and prior to the consummation of, the Initial Public Offering, with respect to
the anticipated aggregate Unreturned Original Cost and Unpaid Yield (as such
terms are defined in the Certificate of Incorporation) upon the outstanding
shares of Class B Common Stock on the anticipated closing date of the Initial
Public Offering. Such consideration shall have a fair value equal to the
aggregate Unreturned Original Cost and Unpaid Yield. The form of repayment may
be comprised of a combination of cash, not to exceed the amount of cash the
Company is contractually permitted to pay at the time in question, notes, other
securities of the Company, voting or non-voting common stock or a combination of
the foregoing; such consideration to be (i) reasonably acceptable to the
Requisite Stockholders, (ii) determined and implemented in a tax-efficient
manner by the Investor Stockholders, and (iii) valued in accordance with the
Valuation Method or on such other basis as is approved by the Requisite
Stockholders. In addition to such consideration, holders of Class B Common Stock
shall also be entitled to receive one share of Class A Common Stock for each
share of Class B Common Stock owned, as such number shall be equitably adjusted
to reflect stock splits, dividends, reclassifications, combinations or similar
adjustments to the capital structure of the Company.

         (c) Each Stockholder will, prior to the consummation of the Initial
Public Offering, vote for a redemption, recapitalization or exchange of the
Class B Common Stock to implement the foregoing provisions of this Section 2.3.

                                       7
<PAGE>   11

                                   ARTICLE III

                  RESTRICTIONS ON DISPOSITIONS OF CAPITAL STOCK

         SECTION 3.1 RESTRICTIONS ON DISPOSITIONS.

         (a) No Stockholder, any spouse of any Stockholder, any Personal
Representative of any Stockholder, or any legal representative, agent or
assignee of any Stockholder, as the case may be, shall make any Disposition of
any shares of capital stock, or any right or interest therein, except as
provided in this Article III. The parties agree that the restrictions contained
in this Agreement are fair and reasonable and in the best interests of the
Company and the Stockholders.

         (b) Anything in this Agreement to the contrary notwithstanding, no
Disposition of capital stock otherwise permitted or required by this Agreement
shall be made unless such Disposition is in compliance with federal and state
securities laws, including without limitation the Securities Act and the rules
and regulations thereunder. If any such Disposition is made pursuant to an
exemption from such laws, rules and regulations, such Disposition shall be made
only upon the Stockholder first having delivered to the Company a favorable
written opinion of counsel, reasonably satisfactory in form and substance to the
Company, to the effect that the proposed sale or transfer is exempt from
registration under the Securities Act and any applicable state securities laws;
provided, however, that no such opinion of counsel shall be required for (A) a
transfer by a Stockholder to a Permitted Transferee if, in each case, the
Permitted Transferee agrees in writing to be subject to the terms and conditions
hereof to the same extent as if such Permitted Transferee were an original
Stockholder hereunder, or (B) a sale duly made in compliance with Rule 144
promulgated under the Securities Act, or any successor or analogous rule to Rule
144, or if the Stockholder would be permitted to transfer the securities
pursuant to paragraph (k) of Rule 144 (it being agreed that the Company shall
have the right to receive evidence satisfactory to it regarding compliance with
such Rule or any successor or analogous rule prior to the registration of any
such transfer).

         (c) Anything in this Agreement to the contrary notwithstanding, unless
otherwise agreed to in writing by the Company and each of the Stockholders, no
Disposition of capital stock otherwise permitted or required by this Agreement
shall be effective unless and until any transferee who is not already a party to
this Agreement (and such transferee's spouse, if applicable) shall execute and
deliver to the Company an Addendum Agreement in the form attached hereto as
Exhibit D in which such transferee (and such transferee's spouse, if applicable)
agrees to be bound by this Agreement and to observe and comply with this
Agreement and with all obligations and restrictions imposed on Stockholders
hereby; each person to whom a Disposition of capital stock is permitted by this
Agreement who receives a Disposition of capital stock during the period when
this Agreement is in effect, and who agrees in writing to be bound by the
provisions hereof, shall thereafter become a "Stockholder" for all purposes of
this Agreement. Such transferee shall become a Management Stockholder if the
transferor was a Management Stockholder or an Investor Stockholder if the
transferor was an Investor Stockholder; provided, however, that each transferee
who receives a Disposition of capital stock that is an Affiliate of (i) an
Investor Stockholder, shall become an Investor Stockholder for all purposes of
this Agreement and (ii) a Management Stockholder or spouse thereof, shall become
a Management Stockholder for all purposes of this Agreement.

         (d) Dispositions of capital stock may only be made in strict compliance
with all applicable terms of this Agreement, and any purported Disposition of
capital stock that does not so comply with all applicable provisions of this
Agreement shall be null and void and of no force or effect, and the Company
shall not recognize or be bound by any such purported Disposition and shall not
effect any such purported Disposition on the stock transfer books of the
Company.

                                       8
<PAGE>   12

         (e) All Shares held by the Company, as treasury stock or otherwise, or
any subsidiary thereof shall not be deemed outstanding for any purpose under
this Agreement or the Bylaws of the Company.

         (f) Prior to the consummation of an Initial Public Offering, all newly
issued shares of capital stock of the Company (including newly issued Shares or
equity securities issued pursuant to Stock Equivalents) shall only be issued to
Persons who become party to this Agreement; provided however, that each
transferee who (i) is an employee or consultant of the Company shall become a
Management Stockholder for all purposes of this Agreement, and (ii) is not an
employee or consultant of the Company shall have such designation, if any, as
shall be determined by the Requisite Stockholders.

         SECTION 3.2 PERMITTED TRANSFERS.

         (a) Subject to the provisions of Section 3.1, a Stockholder or his
Personal Representative may at any time or times transfer any or all of his or
its shares of capital stock to any person who is a Permitted Transferee (other
than pursuant to clause (iv) of such definition) with respect to the transferor
Stockholder.

         (b) A transfer or disposition of any kind or character otherwise
prohibited by this Agreement may be permitted if approved by the Requisite
Stockholders. Notwithstanding anything to the contrary contained in this Section
3.2(b), a transfer or disposition otherwise permitted under Sections 3.3 through
3.6 hereof shall not be prohibited by this Section 3.2.

         SECTION 3.3 NOTICE OF RIGHT OF FIRST REFUSAL. In the event that a
Stockholder receives a bona fide offer (a "Third Party Offer") for the purchase
of all or a part of his or its capital stock (or any rights or interests
therein) that such Stockholder desires to accept, such Stockholder (the "Offeror
Stockholder") agrees to give written notice of such Third Party Offer (the
"Notice of Right of First Refusal") to the Secretary of the Company and to the
other Stockholders (the "Other Stockholders"); provided, however, that no
Management Stockholder or such Management Stockholder's Permitted Transferee may
attempt to make a transfer or Disposition of Shares of capital stock pursuant to
this Section 3.3 at any time on or before the earlier of (i) the fifth
anniversary of the date of this Agreement, (ii) an Initial Public Offering or
(iii) a Change of Control. The notice must set forth the name of the proposed
transferee (the "Third Party"), the number and class of shares to be transferred
(the "Offered Stock"), the price per share (the "Offer Price"), all details of
the payment terms and all other terms and conditions of the proposed transfer. A
Third Party Offer may not contain provisions related to any property other than
the capital stock of the Offeror Stockholder, and the Offer Price shall be
expressed only in terms of cash or credit terms contained in the proposed
transfer. The Offeror Stockholder shall deliver such Notice of Right of First
Refusal to the parties noted above immediately upon receiving such Third Party
Offer, but in any event not less than thirty (30) days prior to the date of the
proposed transfer.

         The last date that the Notice of Right of First Refusal is received by
the Other Stockholders shall constitute the "First Refusal Notice Date." The
Company shall be obligated to promptly determine the First Refusal Notice Date
following its receipt of a Notice of Right of First Refusal, and such date shall
be promptly communicated in writing by the Company to all Stockholders within
five (5) days of the determination of such date. For purposes of this Section
3.3, a "Third Party Offer" to purchase part or all of a Stockholder's Common
Stock shall mean a written offer to purchase such capital stock.

         SECTION 3.4 PRIMARY RIGHT OF FIRST REFUSAL BY THE COMPANY. The Company
shall have the sole and exclusive option to acquire all or any portion of the
Offered Stock in accordance with the provisions of the Notice of Right of First
Refusal for a period often (10) days from the First Refusal Notice Date. The
Company may exercise such option by giving written notice of exercise to the
Offeror Stockholder and to all Other Stockholders prior to the termination of
its exclusive option period. Such notice of exercise shall refer

                                       9
<PAGE>   13

to the Notice of Right of First Refusal and shall set forth the number of shares
of capital stock to be acquired by the Company.

         SECTION 3.5 SECONDARY RIGHT OF FIRST REFUSAL BY OTHER STOCKHOLDERS.

         (a) In the event the Company elects to purchase less than all of the
Offered Stock, the Other Stockholders shall have the exclusive option from the
eleventh day to the thirtieth day following the First Refusal Notice Date to
acquire the Offered Stock not purchased by the Company in accordance with the
procedure described in this Article III. The Other Stockholders may, by
agreement, allocate among themselves the right to acquire such part of the
Offered Stock that will not be acquired by the Company or the Other Management
Stockholders, if appropriate.

         (b) In the absence of such an agreement between the Other Stockholders,
each Other Stockholder will be entitled to give written notice to the Offeror
Stockholder, to the Company and to the Other Stockholders, from the eleventh day
to the twentieth day following the First Refusal Notice Date, of such Other
Stockholder's election ("Election Notice") to acquire all or any part of its
Proportionate Percentage of the Offered Stock that is not being acquired by the
subject Company or the Other Management Stockholders, as appropriate.

         (c) Any Offered Stock not subscribed for pursuant to Section 3.5(b) by
the Other Stockholders shall be deemed to be re-offered to and accepted by the
Other Stockholders exercising their rights to purchase Offered Stock with
respect to the lesser of (A) the amount specified in their respective Election
Notices and (B) an amount equal to their respective Proportionate Percentages
with respect to such deemed offer. Such deemed offer and acceptance procedures
described in the immediately preceding sentence shall be deemed to be repeated
until either (x) all of the Offered Stock is accepted by the Other Stockholders
or (y) no Other Stockholder desires to subscribe for more Offered Stock. The
Company shall notify each Other Stockholder within five days following the
expiration of the period described in Section 3.5(b) of the number or amount of
Offered Stock which such Stockholder has subscribed to purchase and shall set a
reasonable place and time from the date thereof for the closing of the purchase
and sale of the Offered Stock.

         (d) If the Company and the Other Stockholders do not purchase all of
the Offered Stock, the Offered Stock (or any remaining portion thereof) may be
sold by the Offeror Stockholder at any time within ninety (90) days after the
date of the Third Party Offer, subject to the provisions of Sections 3.1 and 3.8
hereof. Any such sale shall not be at less than the price or upon terms and
conditions more favorable to the purchaser than those specified in the Third
Party Offer. In the event the Third Party Offeror will only purchase all of the
Offered Stock, the Offeror Stockholder may rescind the Election Notices of the
Company and the Other Stockholders, if such Election Notices are, in the
aggregate, for less than all of the Offered Stock.

         SECTION 3.6 PURCHASE PRICE. The total purchase price (the "Purchase
Price") for all the capital stock to be purchased pursuant to Section 3.3 will
be the total purchase price for the proposed transfer, and upon the same terms
and conditions, as set forth in the Third Party Offer.

         SECTION 3.7 COMPLIANCE REQUIRED. Any Disposition described in Sections
3.3 through 3.6 hereof of a Stockholder's capital stock without complying with
the giving of a Notice of Right of First Refusal and the Right of First Refusal
provisions of this Article III shall be void, and the Company shall issue a
Notice of Right of First Refusal upon discovery of such transfer, a copy of
which shall be sent to the person or entity making such transfer, his or its
transferee, the Company and all Stockholders. The duty of the Company to see to
the issuance of such Notice of Right of First Refusal shall not be considered to
be elective, but shall be mandatory. Upon the giving of the Notice of Right of
First Refusal, the time periods for the exercise of the options specified in
Sections 3.4 and 3.5 shall commence running. If a Notice of Right of

                                       10
<PAGE>   14

First Refusal had already been given to the Company, but the Company is required
to issue a new Notice of Right of First Refusal under this Section, the prior
Notice of Right of First Refusal shall have no effect and the time periods under
the Notice of Right of First Refusal issued by the Company shall apply.

         SECTION 3.8 CERTAIN RIGHTS OF INCLUSION.

         (a) No Stockholder shall, individually or collectively, in any
transaction, sell or otherwise dispose of Shares held by such Stockholder to a
third party, other than to a Permitted Transferee, unless the terms and
conditions of the Third Party Offer include an offer, at the Equivalent Price
and on the same terms as the offer to the selling Stockholders, to each of the
other Stockholders (the "Offerees"), to include at the option of each Offeree,
in the sale or other disposition to the Third Party, a number of Shares owned by
each Offeree determined in accordance with this Section 3.8.

         (b) The Stockholder that receives the Third Party Offer (the "Selling
Stockholder") shall cause the Third Party Offer to be reduced in writing (which
writing shall include an offer to purchase or otherwise acquire Shares from the
Offerees as required by this Section 3.8) and shall send written notice of the
Third Party Offer together with a copy of the Third Party Offer (the "Inclusion
Notice") to each of the Offerees in the manner specified in Section 6.1 hereof.

         (c) Each Offeree shall have the right (an "Inclusion Right"),
exercisable by delivery of notice to the Selling Stockholder at any time within
twenty (20) calendar days after delivery of the Inclusion Notice, to sell
pursuant to the Third Party Offer a number of such Offeree's shares of capital
stock equal to his or its Proportionate Percentage of the selling Stockholder
and Offerees exercising their Inclusion Rights.

         SECTION 3.9 DRAG-ALONG RIGHTS.

         (a) If at any time a majority of the Investor Nominees, or holders of
75% of shares of Class B Common Stock owned by the Investor Stockholders acting
pursuant to Section 5.11 hereof, approves a Sale of the Company (an "Approved
Sale"), all Stockholders shall consent to and raise no objections against the
Approved Sale, and if the Approved Sale is structured as (A) a merger, share
exchange or consolidation of the Company, or a sale of all or substantially all
of the assets of the Company, each Stockholder shall waive any dissenters
rights, appraisal rights or similar rights in connection with such merger,
consolidation or asset sale, or (B) a sale of all the capital stock of the
Company, the Stockholders shall agree to sell all their shares of capital stock
of the Company which are the subject of the Approved Sale, on the terms and
conditions of such Approved Sale. The Stockholders shall take all necessary and
desirable actions in connection with the consummation of the Approved Sale,
including obtaining Board of Directors' consent to the Approved Sale and the
execution of such agreements and such instruments and other actions reasonably
necessary to (1) provide customary representations, warranties, indemnities, and
escrow arrangements relating to such Approved Sale and (2) effectuate the
allocation and distribution of the aggregate consideration upon the Approved
Sale as set forth in Section 3.9(c) below. The Stockholders shall be permitted
to sell their shares of capital stock pursuant to an Approved Sale without
complying with any other provisions of Article III of this Agreement.

         (b) The Investor Stockholders that have initiated an Approved Sale
pursuant to Section 3.9(a) (whether directly or through the action of their
respective Investor Nominees), shall represent and warrant to the other
Stockholders that no direct or indirect collateral benefit or supplemental
consideration (whether or not in the nature of a tangible or intangible asset,
money, property, security or other tangible benefits or opportunities) has been
or is to be paid by such prospective purchaser or any other person, in
connection with the Approved Sale and that such Approved Sale is not made as
part of or in connection with any other transaction pursuant to which the
Investor Stockholders that have initiated the Approved Sale will receive any
additional benefit or consideration. The foregoing provision shall not be deemed
to prohibit a sale of the

                                       11
<PAGE>   15

Company to any Person merely because such Person has, is currently having or
intends to have a business relationship with one or more Stockholders.

         (c) The obligations of the Stockholders pursuant to this Section 3.9
are subject to the satisfaction of the following conditions:

                  (i) upon the consummation of the Approved Sale, each
         Stockholder shall receive the same proportion of the aggregate
         consideration from such Approved Sale that such holder would have
         received if such aggregate consideration had been distributed by the
         Company in complete liquidation pursuant to the rights and preferences
         set forth in the Certificate of Incorporation of the Company as in
         effect immediately prior to such Approved Sale (giving effect to
         applicable orders of priority);

                  (ii) if any Stockholders of a class are given an option as to
         the form and amount of consideration to be received, all Stockholders
         will be given the same option;

                  (iii) all holders of options, warrants or similar rights to
         acquire capital stock of the Company ("Stock Equivalents") that are
         then currently exercisable will be given an opportunity to exercise
         such rights prior to the consummation of the Approved Sale (but only to
         the extent such Stock Equivalents are then vested or would be vested on
         an accelerated basis pursuant to the terms of their issuance) and
         participate in such sale as Stockholders;

                  (iv) no Stockholder shall be obligated to make any
         out-of-pocket expenditure prior to the consummation of the Approved
         Sale (excluding modest expenditures for postage, copies, etc.) and no
         Stockholder shall be obligated to pay any portion (or shall be entitled
         to be reimbursed by the Company for that portion paid) that is more
         than its pro rata share (based upon the amount of consideration
         received) of reasonable expenses incurred in connection with a
         consummated Approved Sale; to the extent such costs are incurred for
         the benefit of all Stockholders, and are not otherwise paid by the
         Company or the acquiring party (costs incurred by or on behalf of a
         Stockholder for its sole benefit will not be considered costs of the
         transaction hereunder), provided that a Stockholder's liability for
         such expenses shall be capped at the total purchase price received by
         such Stockholder for its shares of capital stock, plus Stock
         Equivalents; and

                  (v) no Stockholder shall be required to provide any
         representations, warranties or indemnities in connection with the
         Approved Sale, other than those required to be made pursuant to Section
         3.9(b) to other Stockholders and those representations, warranties and
         indemnities concerning each Stockholder's valid ownership of shares of
         capital stock and Stock Equivalents, free of all liens and encumbrances
         (other than those arising under applicable securities laws), and each
         Stockholder's authority, power, and right to enter into and consummate
         such purchase or merger agreement without violating any other
         agreement.

         (d) If the Company and any of the Stockholders or their
representatives, enter into any negotiation or transaction for which Rule 506
under the Securities Act (or any similar rule then in effect) may be available
with respect to such negotiation or transaction (including a merger,
consolidation or other reorganization), each Stockholder who is not an
accredited investor (as such term is defined in Rule 501 under the Securities
Act) will, at the request of the Company or the Investor Stockholders, appoint a
purchaser representative (as such term is defined in Rule 501 under the
Securities Act) reasonably acceptable to the Company or such Stockholders.

                                       12
<PAGE>   16

         SECTION 3.10 ENDORSEMENT OF STOCK CERTIFICATES.

         (a) Conformed copies of this Agreement shall be filed with the
Secretary of the Company and kept with the records at its principal office. An
officer of the Company shall endorse each certificate representing the shares of
capital stock of the Company heretofore or hereafter issued by the Company to
the Stockholders by causing to be placed on the face thereof the following:

         TRANSFER IS SUBJECT TO RESTRICTIVE STOCK LEGENDS ON BACK

and by causing to be placed on the back thereof the legend in substantially the
following form:

         THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
         TERMS OF A STOCKHOLDERS' AGREEMENT DATED AS OF AUGUST 18, 1998, BY AND
         AMONG THE COMPANY AND CERTAIN OTHER PERSONS, WHICH AGREEMENT CONTAINS,
         AMONG OTHER PROVISIONS, RESTRICTIONS ON THE TRANSFER, SALE OR OTHER
         DISPOSITION OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE. A
         COPY OF SUCH STOCKHOLDERS' AGREEMENT HAS BEEN FILED, AND IS AVAILABLE
         FOR REVIEW BY THE RECORD HOLDER OF THIS CERTIFICATE, AT THE PRINCIPAL
         OFFICE OF THE COMPANY.

         (b) In addition to the legend required under Section 3.11 (a) above,
each Stockholder agrees that each certificate representing the shares of capital
stock of the Company heretofore or hereafter issued by the Company shall also
bear such other legends as required pursuant to the Subscription Agreements.

         SECTION 3.11 SPECIFIC PERFORMANCE. Each of the parties to this
Agreement acknowledges that it shall be impossible to measure in money the
damage to the Company or the Stockholder(s), if any of them or any transferee or
any legal representative of any party hereto fails to comply with any of the
restrictions or obligations imposed by this Article III, that every such
restriction and obligation is material, and that in the event of any such
failure, the Company or the Stockholder(s) shall not have an adequate remedy at
law or in damages. Therefore, each party hereto consents to the issuance of an
injunction or the enforcement of other equitable remedies against him at the
suit of en aggrieved party without the posting of any bond or other security, to
compel specific performance of all of the terms of this Article III and to
prevent any disposition of shares of capital stock in contravention of any terms
of this Article III, and waives any defenses thereto, including, without
limitation, the defenses of: (i) failure of consideration; (ii) breach of any
other provision of this Agreement; and (iii) availability of relief in damages.

                                   ARTICLE IV

                            COMPANY REPURCHASE RIGHTS

         SECTION 4.1 VESTING OF MANAGEMENT STOCK.

         (a) Except as otherwise provided in Section 4.1 (b) and Section 4.1(c),
each Management Stockholder's shares of Class A Common Stock ("Management
Stock") will become vested in accordance with the following schedule, if, as of
each such date, the Management Stockholder is still employed by either the
Company or any of its subsidiaries:

<TABLE>
<S>                                                                  <C>
         Date of this Agreement                                        25%
         First Anniversary Date of this Agreement                      40%
         Second Anniversary Date of this Agreement                     55%
         Third Anniversary Date of this Agreement                      70%
         Fourth Anniversary Date of this Agreement                     85%
         Fifth Anniversary Date of this Agreement                     100%
</TABLE>

                                       13
<PAGE>   17

Notwithstanding the immediately preceding vesting schedule, in the event that
(i) the Company shall employ an additional person to whom the Company shall
issue shares of Class A Common Stock and (ii) the Board of Directors shall
designate such person as a Management Stockholder for inclusion on Exhibit A,
the vesting schedule set forth in the immediately preceding sentence shall
commence on the date of such person's employment with the Company rather than
the date of this Agreement.

         (b) If the Management Stockholder ceases to be employed by the Company
or any of its subsidiaries on any date other than an anniversary date, the
cumulative percentage of Management Stock to become vested will be determined on
a pro rata basis according to the number of months elapsed since the prior
anniversary date or the date of this Agreement (should such termination occur
prior to the first anniversary date).

         (c) Upon the occurrence of (i) a Sale of the Company, (ii) the closing
of an Initial Public Offering (iii) any merger, consolidation or
recapitalization pursuant to which the holders of Shares prior to such
transaction cease to hold a majority of Shares after such transaction, or (iv)
the dissolution and/or liquidation of the Company, then all shares of Management
Stock which have not yet become vested shall become vested at the time of such
event if the Management Stockholder is still employed by either the Company or
any of its subsidiaries at the time of such event.

         SECTION 4.2 REPURCHASE OPTION.

         (a) Subject to the remaining provisions of this Section 4.2, all or any
portion of the Management Stock, whether Vested Shares or Unvested Shares
(whether held by the Management Stockholder or one or more of the Management
Stockholder's Permitted Transferees) are subject to repurchase by the Company
(the "Available Shares") in the event such Management Stockholder ceases to be
employed by the Company and its subsidiaries within five years of the date
hereof or the commencement of employment, as the case may be, by reason of
termination with or without Cause, or voluntary resignation, as follows:

                  (i) If the Management Stockholder ceases to be employed by the
         Company or any of its subsidiaries by reason of death or disability, no
         shares of Management Stock, whether Vested or Unvested, owned by such
         Management Stockholder shall be subject to repurchase pursuant to this
         Section 4.2(a).

                  (ii) If the Management Stockholder ceases to be employed by
         the Company or any of its subsidiaries by reason of termination without
         Cause or by voluntary resignation, his Unvested Shares shall be subject
         to repurchase and the purchase price for each Unvested Share of
         Management Stock subject to repurchase pursuant to this Section 4.2
         shall be the Management Stockholder's Original Cost for such share.

                  (iii) If the Management Stockholder ceases to be employed by
         the Company or any of its subsidiaries by reason of termination with
         Cause, his Unvested Shares and Vested Shares shall be subject to
         repurchase and the purchase price for each Unvested Share and Vested
         Share of Management Stock subject to repurchase pursuant to this
         Section 4.2 shall be the Management Stockholder's Original Cost for
         such share.

                                       14
<PAGE>   18

         (b) The Company may elect to purchase all or any portion of the
Available Shares pursuant to the preceding subsections of this Section 4.2 by
delivering written notice (the "Repurchase Notice") to the holder or holders of
Available Shares. The Repurchase Notice will set forth the number of Available
Shares to be acquired from the Management Stockholder or his Permitted
Transferee, as the case may be, the aggregate consideration to be paid for such
shares and the time and place for the closing of the transaction. The number of
Available Shares to be repurchased by the Company shall first be satisfied to
the extent possible from the Available Shares held by the Management Stockholder
at the time of delivery of the Repurchase Notice. If the number of Available
Shares then held by the Management Stockholder is less than the number of
Available Shares that the Company has elected to purchase, the Company shall
purchase the remaining Available Shares (by class) elected to be purchased from
the Permitted Transferees of such Management Stockholder under this Agreement
pro rata, in each case according to the number of Available Shares (by class)
held by such Permitted Transferees at the time of delivery of such Repurchase
Notice (determined as nearly as practicable to the nearest whole share). All
such Available Shares repurchased by the Company will become available for
repurchase by members of management pursuant to the Management Stock Ownership
Plan.

         (c) If, for any reason the Company shall be prohibited from purchasing
all of the Available Shares pursuant to Section 4.2, all Management Stockholders
(other than the Management Stockholder (and his Permitted Transferees) whose
shares have become Available Shares) and Investor Stockholders shall agree to
form a trust, escrow or similar device that is subject to the control of the
chief executive officer of the Company (a "Trust") that shall be funded by all
such Stockholders on a pro rata basis (based upon the number of shares of
capital stock held) with an amount sufficient to purchase all such unpurchased
Available Shares; provided, however, that compliance with this Section 4.2(c)
may be waived by the affirmative vote of the Requisite Stockholders. All such
Available Shares repurchased by the Trust will be held for the benefit of
members of management pursuant to the Management Stock Ownership Plan at
Original Cost; provided, however, that Shares held by the Trust shall not be
deemed outstanding for purposes of this Agreement or Capital Calls under the
Stock Purchase Agreement. As soon as practicable after the Company has
determined that it will not purchase all of the Available Shares, but in any
event within 10 days after the delivery of the Repurchase Notice, the Company
shall give written notice (the "Option Notice") to all Stockholders and the
Trust setting forth the number of remaining Available Shares and the aggregate
purchase price for such shares. Such Trust will purchase all the remaining
Available Shares by delivering written notice (the "Election Notice") to the
Company within 30 days after receipt of the Option Notice from the Company. As
soon as practicable, and in any event within 15 days after receipt of the
Election Notice, the Company shall notify each holder of Management Stock as to
the number of Available Shares being purchased from such holder by the Trust
(the "Supplemental Repurchase Notice"). Any such Available Shares that are not
purchased by the Company or the Trust may be repurchased by Management
Stockholders pursuant to this Section 4.2 but such shares shall be subject to
repurchase (at the cost paid by such Management Stockholder plus the amount of
any Capital Calls made thereon, if actually paid by such Management Stockholder)
by the Company to hold as shares available for purchase by members of management
pursuant to the Management Stock Ownership Plan.

         (d) The closing of the purchase of Available Shares pursuant to this
Section 4.2 shall take place on the date designated by the Company in the
Repurchase Notice or Supplemental Repurchase Notice, which date shall not be
more than 60 days nor less than five days after the delivery of the later of the
Repurchase Notice or the Supplemental Repurchase Notice. The Company, the Trust
and/or the Management Stockholders will pay for Available Shares to be purchased
pursuant to this Section 4.2 by delivery of, in the case of the Trust or the
Management Stockholders, a check or wire transfer of funds and, in the case of
the Company, (i) a check or wire transfer of funds, (ii) in the event the
Company is prohibited by the Company's Certificate of Incorporation, Bylaws, or
applicable statutory or contractual provisions, a subordinated note or notes
payable on commercially reasonable terms, or (iii) both (i) and (ii) in the
aggregate amount of the

                                       15
<PAGE>   19

purchase price for such shares. Any notes issued by the Company pursuant to this
Section 4.2(d) shall be subject to any restrictive covenants (including
limitations or restrictions on the payment of interest) to which the Company is
subject at the time of such purchase. The purchasers of any Available Shares
hereunder will be entitled to require all of the signatures of each seller of
such Available Shares to be notarized and to receive representations and
warranties from each such seller regarding (A) such seller's power, authority
and legal capacity to enter into such sale and to transfer valid right, title
and interest in such Available Shares, (B) such seller's ownership of such
Available Shares and the absence of any liens, pledges, and other encumbrances
on such Available Shares, and (C) the absence of any violation, default, or
acceleration of any agreement or instrument pursuant to which such seller or the
assets of such seller are bound as the result of such sale.

         (e) The right of the Company, the Trust and the Management Stockholders
to repurchase Available Shares pursuant to this Section 4.2 shall terminate upon
the first to occur of (i) the 180th calendar day following the date on which
such Available Shares first became subject to repurchase pursuant to this
Section 4.2, (ii) the consummation of a Sale of the Company or (iii) the
consummation of a Initial Public Offering.

         (f) In the event that Available Shares are repurchased pursuant to this
Section 4.2, the holders of such Available Shares will take all steps necessary
and desirable to obtain all required third-party, governmental and regulatory
consents and approvals and take all other actions necessary and desirable to
facilitate consummation of such repurchase(s) in a timely manner.

         SECTION 4.3 CLASS B COMMON STOCK. The Company shall have no repurchase
rights or obligations under Section 4.1 and 4.2 hereof with respect to the Class
B Common Stock owned by any Management Stockholder.

         SECTION 4.4 BUYBACK OF CERTAIN SHARES OF COMMON STOCK.

         (a) (i) Upon the occurrence of an event (and its related Capital Call,
as such term is defined in the Stock Purchase Agreement) described in Section
4.1 or Section 4.2 of the Stock Purchase Agreement (either, an "Event"), the
Company, at the time of Capital Call precipitating the Event and at the time of
each Capital Call subsequent to the Event (during which the Defaulting
Stockholder and the Non-Participating Stockholder are ineligible to participate
pursuant to Section 4.3 of the Stock Purchase Agreement and the Defaulting
Stockholder is not forced to participate pursuant to Section 4.2(b) of the Stock
Purchase Agreement), shall have the right to repurchase, at Original Cost, that
number of shares of Class B Common Stock owned by such Defaulting Stockholder or
Non-Participating Stockholder (as such terms are defined in the Stock Purchase
Agreement), or his Permitted Transferees, as the case may be, equal to the
Buyback Amount plus the Penalty Amount (as such terms are defined below). Any
shares of Common Stock available for repurchase under this Section 4.4(a) shall
be referred to herein as "Eligible Shares." Upon the occurrence of an Event,
such Non-Participating Stockholder or Defaulting Stockholder, as the case may
be, hereby agrees to deliver the maximum number of Shares that the Company may
become entitled to repurchase from such Stockholder during the remainder of the
Takedown Period (as calculated pursuant to this Section 4.4(a) and assuming that
all of the Total Commitments were actually funded) to a custodial account,
escrow account or similar device (the "Account") formed by the Company on terms
and conditions reasonably agreed upon by the Non-Participating Stockholder or
the Defaulting Stockholder, as the case may be, for the purpose of holding such
Shares that may become subject to repurchase pursuant to this Section 4.4;
provided, however, that no delivery to the Account shall be required if such
Stockholder delivers a written opinion of counsel reasonably acceptable to the
Company to the effect that such delivery would cause a change in ownership of
such shares prior to the date the Company actually becomes eligible to (and
actually does) repurchase such Shares. Such maximum number of shares shall be
delivered to the Account within five business days' following such Stockholder's
receipt of notice (and such Stockholder's reasonable agreement

                                       16
<PAGE>   20

with the calculations set forth therein) from the Company as to the calculation
as to the maximum number of Shares that the Company may become entitled to
repurchase pursuant to this Section 4.4. Any Shares not repurchased by the
Company pursuant to this Section 4.4 at the end of the Takedown Period shall be
released from the Account and returned to the Non-Participating Stockholder or
Defaulting Stockholder.

               (ii) The "Buyback Amount" shall equal that number of shares of
Class B Common Stock equal to X(Y/(Y+Z)) where "X" shall equal the number of
shares of Class B Common Stock owned by such Defaulting Stockholder or
Non-Participating Stockholder, as the case may be) immediately prior to the
capital call that is the subject of such default or non-participation; "Y" shall
equal the dollar amount of such Stockholder's portion of the most recent Capital
Call made pursuant to Section 3.1 of the Stock Purchase Agreement that the
Defaulting Stockholder failed to fund or Non-Participating Stockholder declined
to fund (or such Defaulting Stockholder or Non-Participating Stockholder was
ineligible to fund, as the case may be); and "Z" shall equal the sum of (i) the
aggregate purchase price paid and capital contributions made by such Defaulting
Stockholder or Non-Participating Stockholder pursuant to Section 2.1 and Section
3.1 of the Stock Purchase Agreement and (ii) the aggregate amount of all Capital
Calls that such Defaulting Stockholder or Non-Participating Stockholder was
ineligible to fund prior to the current Capital Call, if any.

               (iii) The "Penalty Amount" shall equal that number of shares of
Class B Common Stock equal to the Buyback Amount multiplied by P; where "P"
shall equal the percentage detailed in the table below after determining the
quotient of (AB); where "A" shall equal the aggregate amount of the Capital Call
with respect to all Stockholders precipitating the Event (or in which the
Defaulting Stockholder or Non-Participating Stockholder was ineligible to
participate) and "B" shall equal the aggregate purchase price and capital
contributions pursuant to Sections 2.1 and 3.1 of the Stock Purchase Agreement
made to the Class B Common Stock by all Stockholders prior the Event:

<TABLE>
<S>                                                           <C>
If the quotient of AB is:                                     then "P" shall equal
less than 25%                                                 10%
25% or greater, but less than 60%                             8%
60% or greater, but less than 95%                             6%
95% or greater, but less than 150%                            5%
150% or greater                                               2%
</TABLE>

         (b) The Company may elect to purchase all or any portion of the
Eligible Shares by delivering written notice (the "Eligibility Notice") to the
holder or holders of Eligible Shares. The Eligibility Notice will set forth the
number of Eligible Shares to be acquired from each holder, the aggregate
consideration to be paid for such shares and the time and place for the closing
of the transaction.

         (c) If, for any reason the Company shall be prohibited from purchasing
all of the Eligible Shares pursuant to this Section 4.4, all Stockholders (other
than the Stockholder whose Common Stock has become Eligible Shares) shall be
entitled to purchase such unpurchased Eligible Shares in accordance with their
Proportionate Percentages; provided, however, that compliance with this Section
4.4 (c) may be waived by the affirmative vote of the Requisite Stockholders. As
soon as practicable after the Company has determined that it will not purchase
all of the Eligible Shares, but in any event within 10 days after the delivery
of the Eligibility Notice, the Company shall give written notice (the "Further
Eligibility Notice") to such other Stockholders setting forth the number of
remaining Eligible Shares and the aggregate purchase price for such shares. Such
other Stockholders may elect to purchase any or all of the remaining Eligible
Shares by delivering written notice (the "Eligibility Election Notice") to the
Company within 30 days after receipt of the Further Eligibility Notice from the
Company. As soon as practicable, and in any event within 15 days after receipt
of the Eligibility Notice, the Company shall notify each holder of Common Stock
as to the number of Eligible Shares being purchased from such holder by such
other Stockholders (the "Supplemental Eligibility Notice").

                                       17
<PAGE>   21

         (d) The closing of the purchase of Eligible Shares pursuant to this
Section 4.4 shall take place on the date designated by the Company in the
Eligibility Notice or Supplemental Eligibility Notice, which date shall not be
more than 60 days nor less than five days after the delivery of the later of the
Eligibility Notice or Supplemental Eligibility Notice. The Company and/or the
electing Stockholders will pay for Eligible Shares to be purchased pursuant to
this Section 4.4 by delivery of, in the case of the Stockholders, a check or
wire transfer of funds and, in the case of the Company, (i) a check or wire
transfer of funds, (ii) a subordinated note or notes bearing interest at a rate
of 7% per annum and otherwise payable on or prior to an Initial Public Offering
or Sale of the Company, or (iii) both (i) and (ii) as the Company may, in its
sole discretion, determine in the aggregate amount of the purchase price for
such Eligible Shares. Any notes issued by the Company pursuant to this Section
4.4(d) shall be subject to any restrictive covenants (including limitations or
restrictions on the payment of interest) to which to Company is subject at the
time of such purchase. The purchasers of any Eligible Shares hereunder will be
entitled to require all of the signatures of each seller of such Eligible Shares
to be notarized and to receive representations and warranties from each such
seller regarding (A) such seller's power, authority and legal capacity to enter
into such sale and to transfer valid right, title and interest in such Eligible
Shares, (B) such seller's ownership of such Eligible Shares and the absence of
any liens, pledges and other encumbrances on such Eligible Shares, and (C) the
absence of any violation, default or acceleration of any agreement or instrument
pursuant to which such seller or the assets of such seller are bound as the
result of such sale.

         (e) The right of the Company and the Stockholders to repurchase
Eligible Shares pursuant to this Section 4.4 shall terminate upon the first to
occur of (i) the 91st calendar day following the date on which such Eligible
Shares first became subject to repurchase pursuant to this Section 4.4, (ii) the
consummation of a Sale of the Company or (iii) the consummation of an Initial
Public Offering.

         (f) In the event that Eligible Shares are repurchased from a
Stockholder pursuant to this Section 4.4, such Stockholder will take all steps
necessary and desirable to obtain all required third-party, governmental and
regulatory consents and approvals and take all other actions necessary and
desirable to facilitate consummation of such repurchase(s) in a timely manner.

         (g) In the event that any Eligible Shares are purchased from a
Stockholder pursuant to this Section 4.4, such repurchased Eligible Shares may
be resold by the Company, at any time and from time to time, and Stock
Equivalents with respect to such Eligible Shares (whether before or after the
repurchase of such Eligible Shares by the Company) may also be sold by the
Company. Such repurchased Eligible Shares or Stock Equivalents shall be sold in
amounts, at prices, at times and pursuant to agreements (including without
limitation agreements containing obligations to contribute capital to the
Company) that the Board of Directors shall approve in its sole discretion;
provided, however, that any price for such Eligible Share shall be at least 90%
of amounts paid or payable with respect to such Eligible Shares pursuant to the
Stock Purchase Agreement. The provisions of this Agreement, including without
limitation the provisions of Section 2.2, shall apply to all sales of
repurchased Eligible Shares and related Stock Equivalents hereunder.

                                    ARTICLE V

                    SPECIAL MANAGEMENT/GOVERNANCE PROVISIONS

         SECTION 5.1 CERTIFICATE OF INCORPORATION: NO CONFLICT WITH AGREEMENT.
Attached hereto as Exhibits B and C are copies of the Certificate of
Incorporation and Bylaws, respectively, of the Company which are in effect as of
the date hereof. Each Stockholder shall vote his shares of capital stock, and
shall take all the actions necessary, to ensure that the Certificate of
Incorporation and Bylaws of the Company do not, from time to time, conflict with
the provisions of this Agreement.

                                       18
<PAGE>   22

         SECTION 5.2 BOARD OF DIRECTORS.

         (a) From and after the date hereof, subject to Section 5.11, the
Stockholders and their assigns shall vote their shares of capital stock, at any
regular or special meeting of stockholders called for the purpose of filling
positions on the Board of Directors of the Company, or in any written consent
executed in lieu of such meeting of stockholders and shall take all the actions
necessary, to ensure the election to the Board of Directors of the Company of
six individuals: (i) two of which shall be designated from among the officers of
the Company (other than the chief executive officer) by the Management
Stockholders holding a majority of the Shares held by all Management
Stockholder, and one of which shall be the chief executive officer of the
Company (the "Management Nominees"), (ii) one of which shall be designated by
Chase Venture Capital Associates, L.P. (the "Chase Nominee"), (iii) one of which
shall be designated by Warburg, Pincus Equity Partners, L.P. (the "Warburg
Nominee") and (iv) one of which shall be designated by Natural Gas Partners V,
L.P. (the "NGP Nominee," and together with the Chase Nominee and the Warburg
Nominee, the "Investor Nominees"); provided, however, that if I. Jon Brumley is
not chief executive officer of the Company, then the Board of Directors shall be
reduced to five members and the number of Management Nominees pursuant to clause
(i) shall be reduced to two. Notwithstanding anything to the contrary contained
in this Section 5.3, each of the Investor Nominees shall be reasonably
acceptable to the Management Stockholders.

         (b) Each Investor Nominee shall have the right to designate an
alternate director (each, an "Alternate Director") and the right to bring one
observer who may be an Alternate Director (each, an "Observer Director") and any
other person approved by the chief executive officer of the Company to each
meeting of the Board of Directors; provided, however that First Union Capital
Partners, Inc. shall have the right to send one Observer Director. Each
Alternate Director and each Observer Director shall be employees of the Investor
Stockholder whose Investor Nominee appointed such Alternate Director and/or
Observer Director; provided that First Union Capital Partners, Inc.'s Observer
Director shall be an employee of First Union Capital Partners, Inc.

         (c) Members of the Board of Directors, Alternate Directors and Observer
Directors will not be paid any fee for serving on the Board of Directors but
will be entitled to reimbursement for reasonable out-of-pocket expenses in
attending meetings of the Board of Directors.

         SECTION 5.3 REMOVAL.

         (a) If a director designated and elected pursuant to Section 5.2, (i)
has been designated by one of the Investor Stockholders pursuant to Section 5.2
and, during such director's term as director, the holders of a majority of the
capital stock held by such Investor Stockholder requests that such director be
removed (with or without Cause) by written notice to the Management Stockholders
or (ii) has been designated by the Management Stockholders pursuant to Section
5.2 and, during such director's term as director, holders of a majority of the
capital stock held by the Management Stockholders request that such director be
removed (with or without Cause) by written notice to the Investor Stockholders,
then such director may be removed, with or without Cause, upon the affirmative
vote of holders of a majority of the outstanding shares of capital stock, and
each Stockholder hereby agrees to vote all shares of capital stock owned or held
of record to effect such removal or consent in writing to effect such removal
upon such request.

         (b) Subject to Sections 5.10 and 5.11, no director shall be removed
without Cause except as provided in Section 5.3(a) hereof and any director shall
be removed for Cause if the holders of a majority of the outstanding shares of
capital stock consent in writing to such removal. Each Management Stockholder
that is a member of the Board of Directors agrees to resign as a member of the
Board of Directors upon the termination of employment (for any reason) with the
Company.

                                       19
<PAGE>   23

         SECTION 5.4 VACANCIES. In the event that a vacancy is created on the
Board of Directors at any time by the death, disability, retirement, resignation
or removal (with or without Cause) of a director, each Stockholder will cause
the directors designated by it to vote for the individual designated to fill
such vacancy by whichever of the Stockholders designated (pursuant to Section
5.2 hereof) the director whose death, disability, retirement, resignation or
removal (with or without Cause) resulted in such vacancy on the Board (in the
manner set forth in Section 5.2); provided, however, that such other individual
so designated may not previously have been a director of the Company who is
removed for Cause from the Board of Directors.

         SECTION 5.5 COVENANT TO VOTE. Each Stockholder hereby agrees to take
all actions necessary to call, or cause the Company and the appropriate officers
and directors of the Company to call, a special or annual meeting of the
stockholders of the Company and to vote all shares of the capital stock owned or
held of record by such Stockholder at any such annual or special meeting in
favor of, or take all actions by written consent in lieu of any such meeting
necessary to cause, the election as members of the Board of Directors of those
individuals so designated in accordance with, and otherwise to effect the intent
of Article V. In addition, each Stockholder agrees to vote the shares of capital
stock owned by such Stockholder upon any other matter arising under this
Agreement submitted to a vote of the Stockholders in a manner that will
implement the terms of this Agreement.

         SECTION 5.6 DESIGNATION OF PROXY. In order to effectuate the provisions
of this Article IV and in addition to and not in lieu of Sections 5.2 through
5.5 hereof, each of the Management Stockholders hereby grants to I. Jon Brumley
a proxy to vote at any meeting of Stockholders or take any action by written
consent in lieu of such meeting with respect to, all of the Shares owned or held
of record by such Management Stockholders solely for (i) the election of
directors designated in accordance with Section 5.2 hereof, and (ii) the
election of a director to fill any vacancy on the Board of Directors in
accordance with Section 5.4 hereof. Such proxy to vote is coupled with an
interest and is therefore irrevocable.

         SECTION 5.7 MANAGEMENT COMPENSATION.

         (a) During the term of each Management Stockholder's employment with
the Company, the Company shall pay to such Management Stockholders an annual
base salary of $190,000, except for I. Jon Brumley, who shall receive an annual
base salary of $300,000, subject in each case to increase at the discretion of
the Board of Directors. Each Management Stockholder's base salary is to be
payable in installments in accordance with the payroll policies of the Company
in effect from time to time.

         (b) In addition to the base salary payable to each of the Management
Stockholders, the Company may pay bonuses in an aggregate amount up to $200,000
per year, allocated among the Management Stockholders and certain other key
employees, as determined by the Board of Directors.

         (c) The Management Stockholders shall be entitled to such other
benefits in accordance with the policies, practices and procedures of the
Company from time to time in effect, including medical and dental insurance
coverage, commensurate with each Management Stockholder's position.

         (d) All Management Stockholders are "at-will" employees and nothing
herein or in any of the documents executed in connection herewith shall be
construed to the contrary.

         SECTION 5.8 FINANCIAL REPORTS.

         (a) Within 20 days after the end of each fiscal month, the Company
shall furnish to each Stockholder with a Total Commitment (as such term is
defined in the Stock Purchase Agreement) in excess of $5,000,000 a report
estimating oil and gas production for such month, which report is used by the
Company for internal control purposes.

                                       20
<PAGE>   24

         (b) Within 45 days after the end of each fiscal quarter, the Company
shall furnish to each Stockholder an unaudited balance sheet as of the end of
such quarter and an unaudited related income statement, statement of
stockholders equity and statement of cash flows for such quarter including any
footnotes thereto (if any) prepared in accordance with generally accepted
accounting principles, consistently applied.

         (c) Within 90 days after the end of each fiscal year, the Company shall
furnish to each Stockholder an audited balance sheet as of the end of such
fiscal year and the related income statement, statement of stockholders equity
and statement of cash flows for such fiscal year prepared in accordance with
generally accepted accounting principles, consistently applied and as reviewed
by (and together with the report of their review of) the Company's auditors who
shall be selected from among the nationally recognized accounting firms.

         (d) Within 45 days after the Company closes an acquisition of producing
or non-producing properties in excess of $5.0 million (an "Acquisition"), the
Company shall furnish to each Stockholder an investment summary describing the
nature and size of such Acquisition and the reasons therefor.

         (e) Within 90 days after the end of each fiscal year, the Company shall
furnish to each Stockholder a reserve report prepared by a reservoir engineer
acceptable to the Board of Directors.

         (f) Within 30 days before the end of each fiscal year, the Company
shall furnish to each Stockholder an annual budget.

         (g) Within 30 days after the occurrence of any material event, the
Company shall furnish notice of such event to each Stockholder together with a
summary describing the nature of the event and its impact on the Company.

         (h) The Company shall furnish such other information to the
Stockholders as such Stockholders or their advisors may reasonably request.

         (i) Notwithstanding anything to the contrary contained in Section 6.12,
the obligations of the Company to furnish financial information pursuant to this
Section 5.8 shall cease upon the closing of an Initial Public Offering by the
Company except that with respect to any Investor Stockholder the Company's
obligations under this Section 5.8 shall terminate only when such Investor
Stockholder and its Affiliates own less than 5% of the outstanding securities of
the Company.

         SECTION 5.9 NON-MANAGEMENT OPTIONS. Shares representing 1.0% of the
outstanding Common Stock on the Closing Date on a fully-diluted basis shall be
reserved for issuance in the form of employee stock options to non-management
employees of the Company ("Non-Management Options"), the form and terms of which
shall be subject to Board approval.

         SECTION 5.10 INVESTOR STOCKHOLDER RIGHTS.

         (a) By request of more than 75% of the shares of Class B Common Stock
held by the Investor Stockholders, the Company shall cause (i) the removal of
any or all of the Management Nominees and/or employees, (ii) the Sale of the
Company or (iii) an Initial Public Offering.

         (b) In the event a Management Stockholder is removed as a director or
an employee of the Company pursuant to Section 5.10(a) for any reason other than
Cause, the Management Stockholder's termination shall be treated as a Change of
Control for purposes of Article IV. In the event a Management

                                       21
<PAGE>   25

Stockholder is removed as a director or an employee of the Company pursuant to
Section 5.10(a) for Cause, the Management Stockholder's termination shall be
treated as a termination for Cause for purposes of Article IV.

         (c) Each Stockholder hereby covenants and agrees that it shall vote its
Shares to enforce compliance with Section 5.10(a), including without limitation,
voting to remove any director who fails to comply with a request properly made
under Section 5.10(a).

         (d) Each Investor Stockholder hereby covenants and agrees that it shall
give the chief executive officer of the Company at least five business days
written notice prior to the taking of any action by written consent, including
without limitation, any action permitted under Section 5.10(a) hereof, and
furthermore shall give the chief executive officer the opportunity to meet with
the Investor Stockholders to discuss any such action proposed to be taken by
written consent prior to the execution thereof.

         SECTION 5.11 VOTING RIGHTS.

         (a) In the event an Investor Stockholder fails to pay any portion of a
Capital Call, such Investor Stockholder shall forfeit the right to (i) vote as a
stockholder, except to the extent prohibited by law or expressly provided
herein, (ii) fund any future Capital Calls and (iii) appoint a nominee to the
Board of Directors pursuant to Section 5.2. In the event an empty Board of
Directors seat is created pursuant to this Section 5.11, such seat shall be
filled by the nominee of the Investor Stockholder with the largest Total
Commitment in the Company (such calculation to include any Total Commitment of
such Stockholder's Affiliates) that does not have a nominee on the Board of
Directors provided that such Total Commitment is at least $20,000,000; if no
such Investor Stockholder exists, then the Board of Directors shall be reduced
to four members, two of which shall be Management Nominees (one being the chief
executive officer and the other being an officer of the Company) and two of
which shall be Investor Nominees.

         (b) In the event a Management Stockholder fails to pay any portion of a
Capital Call, such Management Stockholder shall forfeit the right to (i) vote as
a stockholder, except to the extent prohibited by law or expressly provided
herein, (ii) to serve as a member of, and shall be removed from, the Board of
Directors and (iii) fund any future Capital Calls. Any unfunded Capital Call
commitment of a defaulting Management Stockholder may be reallocated to other
Management Stockholders in the manner determined by the holders of a majority of
the Shares held by all Management Stockholders.

         (c) Upon the occurrence of an Event, each Non-Participating Stockholder
or Defaulting Stockholder, as the case may be, hereby agrees to grant to the
chief executive officer of the Company a proxy (such proxy to be coupled with an
interest and therefore irrevocable) to vote such Shares owned by such
Non-Participating Stockholder or Defaulting Stockholder, as the case may be;
provided, however, that such proxy will not be in effect for any votes that (i)
are required by law to be voted by such Non-Participating Stockholder or
Defaulting Stockholder, as the case may be, (ii) are expressly required in the
Bylaws, Stock Purchase Agreement or this Agreement to be voted by such
Non-Participating Stockholder or Defaulting Stockholder, as the case may be, and
(iii) for any vote pertaining to any amendment, modification, or waiver that
would adversely affect the rights of such Non-Participating Stockholder or
Defaulting Stockholder, as the case may be, in its capacity as a Stockholder,
without similarly affecting the rights of all Stockholders of the same class, in
their capacity as Stockholders of such class. The chief executive officer will,
pursuant to such proxy, vote such Shares owned by such Non-Participating
Stockholder or Defaulting Stockholder, as the case may be, in the same manner
(i.e., in favor, abstain or against) and in the same proportion as all votes
cast by the other Stockholders.

                                       22
<PAGE>   26

         SECTION 5.12. REGULATORY MATTERS.

         (a) COOPERATION OF OTHER STOCKHOLDERS. Each Stockholder agrees to
cooperate with the Company in all commercially reasonable respects in complying
with the terms and provisions of the letter agreements between the Company and
each of First Union Capital Partners, Inc. and Chase Venture Capital Associates,
L.P., copies of which are attached hereto as EXHIBIT E, regarding small business
matters (each, a "Small Business Sideletter"), including without limitation,
voting to approve amending the Company's Certificate of Incorporation, the
Company's Bylaws or this Agreement in a manner reasonably acceptable to the
Stockholders and the Investor or any Regulated Holder (as defined in the Small
Business Sideletters) entitled to make such request pursuant to the Small
Business Sideletter in order to remedy a Regulatory Problem (as defined in the
Small Business Sideletters). Anything contained in this Section 5.12 to the
contrary notwithstanding, no Stockholder shall be required under this Section
5.12 to take any action that would adversely affect in any material respect such
Stockholder's rights under this Agreement or as a stockholder of the Company.

         (b) COVENANT NOT TO AMEND. The Company and each Stockholder agree not
to amend or waive the voting or other provisions of the Company's Certificate of
Incorporation, the Company's Bylaws or this Agreement if such amendment or
waiver would cause any Regulated Holder to have a Regulatory Problem (as defined
in the Small Business Sideletters). Any Investor Stockholder agrees to notify
the Company as to whether or not it would have a Regulatory Problem promptly
after the Investor Stockholder has notice of such amendment or waiver.

                                   ARTICLE VI

                                  MISCELLANEOUS

         SECTION 6.1 MANNER OF GIVING NOTICE. All notices required to be given
hereunder shall be in writing and shall be deemed to be duly given if personally
delivered, telecopied and confirmed, or mailed by certified mail, return receipt
requested, or overnight delivery service with proof of receipt maintained, at
the following address (or any other address that any such party may designate by
written notice to the other parties):

                          Encore Acquisition Partners, Inc.
                          201 Main Street, Suite 1455
                          Fort Worth, Texas 75102

         If to any Stockholder, at his address as set forth on Exhibit A of this
Agreement.

         Any such notice shall, if delivered personally, be deemed received upon
delivery; shall, if delivered by telecopy, be deemed received on the first
business day following confirmation; shall, if delivered by overnight delivery
service, be deemed received the first business day after being sect; and shall,
if delivered by mail, be deemed received upon the earlier of actual receipt
thereof or five business days after the date of deposit in the United States
mail.

         SECTION 6.2 WAIVER OF NOTICE. Whenever any notice is required to be
given to any Stockholder or director of the Company under the provisions of this
Agreement, a waiver thereof in writing signed by the person or persons entitled
to such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Attendance of a director at a meeting
of the Board of Directors shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting is not
lawfully called or convened.

                                       23
<PAGE>   27

         SECTION 6.3 COUNTERPART SIGNATURES. This Agreement may be executed in
any number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by each of
the Stockholders so long as each counterpart shall be signed by one or more of
the Stockholders and so long as the other Stockholder shall sign at least one
counterpart which shall be delivered to the Company.

         SECTION 6.4 SEVERABILITY. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the tern of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid or unenforceable provision, there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

         SECTION 6.5 JOINDER OF SPOUSES. The spouses of all married Stockholders
have joined in the execution of this Agreement in order to evidence their
agreement and consent to be bound by the terms and conditions hereof as to their
interest, whether as community property or otherwise, if any, in the shares of
Common Stock owned by their respective spouses.

         SECTION 6.6 ENTIRE AGREEMENT; AMENDMENTS.

         (a) This Agreement supersedes all prior agreements among the parties
with respect to the subject matter hereof. The provisions of this Agreement may
only be amended, waived or terminated with the prior written consent of the
Requisite Holders; provided, however, that (A) any such amendment, modification,
or waiver that would adversely affect the rights hereunder of any Stockholder,
in its capacity as a Stockholder, without similarly affecting the rights
hereunder of all Stockholders of the same class, in their capacities as
Stockholders of such class or that would affect a Stockholder's right to place
an individual on the Board of Directors pursuant to Section 5.2 or exercise its
preemptive rights pursuant to Section 2.2, shall not be effective as to such
Stockholder without its prior written consent, (B) Exhibit A to this Agreement
shall be deemed to be automatically amended from time to time to reflect
issuances and transfers of Shares made in compliance with this Agreement, the
Subscription Agreements and the Stock Purchase Agreement without requiring the
consent of any party, and the Company will, from time to time, distribute to the
Stockholders a revised Exhibit A to reflect any such changes and (C) any
amendment to Section 5.12 shall not be effective as to First Union Capital
Partners, Inc. or Chase Venture Capital Associates, L.P. without such
Stockholders' prior written consent.

         (b) No waiver of any provision hereof by any party shall be deemed a
waiver by any other party nor shall any such waiver by any party be deemed a
continuing waiver of any matter by such party.

         (c) No amendment, modification, supplement, discharge or waiver hereof
or hereunder shall require the consent of any person not a party to this
Agreement.

         SECTION 6.7 GOVERNING LAW AND VENUE. This Agreement shall be governed
and construed in accordance with the laws of the State of Delaware, without
regard to the conflicts of law principles of such state.

                                       24
<PAGE>   28

         SECTION 6.8 CONSENT TO JURISDICTION.

         (a) The parties hereto hereby irrevocably submit to the exclusive
jurisdiction of the courts of the State of Delaware and the federal courts of
the United States of America located in Delaware, and appropriate appellate
courts therefrom, over any dispute arising out of or relating to this Agreement
or any of the transactions contemplated hereby, and each party hereby
irrevocably agrees that all claims in respect of such dispute or proceeding may
be heard and determined in such courts. The parties hereby irrevocably waive, to
the fullest extent permitted by applicable law, any objection which they may now
or hereafter have to the laying of venue of any dispute arising out of or
relating to this Agreement or any of the transactions contemplated hereby
brought in such court or any defense of inconvenient forum for the maintenance
of such dispute. Each of the parties hereto agrees that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided bylaw. This consent to jurisdiction is being given solely
for purposes of this Agreement and is not intended to, and shall not, confer
consent to jurisdiction with respect to any other dispute in which a party to
this Agreement may become involved.

         (b) Each of the parties hereto hereby consents to process being served
by any party to this Agreement in any suit, action, or proceeding of the nature
specified in subsection (a) above by the mailing of a copy thereof in the manner
specified by the provisions of Section 6.1.

         (c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT.

         SECTION 6.9 BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the Company and each Stockholder and his
respective heirs, permitted successors, permitted assigns, permitted
distributees and legal representatives, and by their signatures hereto, the
Company and each Stockholder intends to and does hereby become bound. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the parties hereto and their respective permitted
successors and assigns any legal or equitable right, remedy or claim under, in
or in respect of this Agreement or any provision herein contained.

         SECTION 6.10 FUTURE ACTIONS. The Company and the Stockholders shall
execute and deliver all such future instruments and take such other and further
action as may be reasonably necessary or appropriate to carry out the provisions
of this Agreement and the intention of the parties as expressed herein,
including if necessary any action required to authorize and direct the officers
and directors of the Company to amend the Company's Certificate of Incorporation
so that this Agreement is enforceable under the laws of the State of Delaware.

         SECTION 6.11 HEADINGS; EXHIBITS. All article and Section headings
herein are for convenience of reference only and are not part of this Agreement,
and no construction or inference shall be derived therefrom. The Exhibits
attached hereto and referred to herein are a part of this Agreement as if fully
set forth herein. All references to Sections and Exhibits shall be deemed
references to such parts of this Agreement, unless the context shall otherwise
require.

         SECTION 6.12 TERMINATION OF THIS AGREEMENT. Except as provided herein,
this Agreement shall immediately and automatically terminate, without any
further action by any party, upon any of the following: (i) the prior written
consent of (A) the Company, (B) Investor Stockholders holding 90% of all Shares
held by Investor Stockholders, other than Non-Participating Stockholders and
Defaulting Stockholders and (C) Management Stockholders holding 75% of all
Shares held by Management Stockholders, other than Non-Participating
Stockholders and Defaulting Stockholders, (ii) the dissolution, bankruptcy,
receivership or insolvency of the Company or (iii) upon the closing of an
Initial Public Offering (provided that Sections 3.1(b) and 5.8(i) shall survive
an Initial Public Offering).

                                       25
<PAGE>   29

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day, month and year first above written.

                                        ENCORE ACQUISITION PARTNERS, INC.

                                        By:  /s/  I. JON BRUMLEY
                                          -------------------------------------
                                          I. Jon Brumley
                                          President

                                        INVESTOR STOCKHOLDERS:

                                        CHASE VENTURE CAPITAL ASSOCIATES, L.P.

                                        By: Chase Capital Partners,
                                            its general partner

                                        By:  /s/ ARNOLD L. CHAVKIN
                                           ------------------------------------
                                        Name:  Arnold L. Chavkin
                                        Title: General Partner

                                        WARBURG, PINCUS EQUITY PARTNERS, L.P.

                                        By:  /s/ HOWARD H. NEWMAN
                                           ------------------------------------
                                        Name:  Howard H. Newman
                                        Title: Managing Director

                                        NATURAL GAS PARTNERS V, L.P.

                                        By: G.F.W. Energy V, L.P.,
                                            its general partner

                                        By: GFW V, L.L.C.,
                                            its general partner

                                        By:  /s/
                                           ------------------------------------
                                        Name:
                                        Title:

                                        FIRST UNION CAPITAL PARTNERS, INC.

                                        By:  /s/ DAVID B. CARSON
                                           ------------------------------------
                                        Name:  David B. Carson
                                        Title: Sr. Vice President

                                       26
<PAGE>   30

SPOUSE:                                     MANAGEMENT STOCKHOLDERS:

/s/   REBECCA BRUMLEY                       /s/   I. JON BRUMLEY
----------------------------                -----------------------------------

/s/   LORI F. BRUMLEY                       /s/   JON S. BRUMLEY
----------------------------                -----------------------------------

                                            /s/   BRUCE B. SELKIRK, III
----------------------------                -----------------------------------

/s/   CYNTHIA L. CARLSON                    /s/   GENE CARLSON
----------------------------                -----------------------------------

/s/   SHERYL A. SCHULTZ                     /s/   KYLE SCHULTZ
----------------------------                -----------------------------------

                                       27
<PAGE>   31

                                    EXHIBIT A

                    LIST OF STOCKHOLDERS AND SHARE OWNERSHIP

<TABLE>
<CAPTION>
                                                              Percentage of                        Percentage of
                                         Shares of Class A    Total Class A     Shares of Class    Total Class B
      Stockholder                            Common Stock         Shares           B Common           Shares
   (Name and Address)                           Owned          Outstanding       Stock Owned        Outstanding
   -----------------                     -----------------   ---------------    ---------------   ---------------
<S>                                      <C>                 <C>                <C>               <C>
Investor Stockholders:

Chase Venture Capital                                   --                --            100,000            33.910%
   Associates, L.P.
380 Madison Avenue
12th Floor
New York, New York 10017

Warburg, Pincus Equity Partners, L.P.                   --                --            140,000            47.474%
466 Lexington Avenue
New York, New York 10017-3147

Natural Gas Partners V, L.P.                            --                --             30,000            10.173%
777 Main Street
Suite 2250
Fort Worth, Texas 76102

First Union Capital Partners, Inc.                      --                --             20,000             6.782%
One First Union Center
301 South College Street
Fifth Floor
Charlotte, North Carolina 28288

I. Jon Brumley                                          --                --           1,921.91             0.652%
201 Main Street, Suite 1455
Fort Worth, Texas 76102

Management Stockholders:
I. Jon Brumley                                   38,091.34            51.667%          1,539.04             0.522%
201 Main Street, Suite 1455
Fort Worth, Texas 76102

Jon S. Brumley                                    8,847.02            12.000%            357.46             0.121%
201 Main Street, Suite 1455
Fort Worth, Texas 76102

Bruce B. Selkirk, III                             4,915.01             6.667%            198.59             0.067%
201 Main Street, Suite 1455
Fort Worth, Texas 76102

Gene Carlson                                      6,143.76             8.333%            248.23             0.084%
201 Main Street, Suite 1455
Fort Worth, Texas 76102

Kyle Schultz                                      6.143.74             8.333%            248.23             0.084%
201 Main Street, Suite 1455
Fort Worth, Texas 76102

Unallocated Pursuant to Management                9,584.27            13.000%            387.24             0.131
Stock Ownership Plan(1)

                                           ---------------                      ---------------
Total                                            73,725.14                           294,900.70
</TABLE>

----------

         (1) These shares are authorized to be issued pursuant to the Management
Stock Ownership Plan, but as of the date hereof have not been issued.

                                       28
<PAGE>   32

                                    EXHIBIT B

                                     BYLAWS

                                       29
<PAGE>   33

                                    EXHIBIT C

                                   CERTIFICATE
                          OF INCORPORATION, AS AMENDED

                                       30
<PAGE>   34

                                    EXHIBIT D

                           FORM OF ADDENDUM AGREEMENT

         This Addendum Agreement is made this ___ day of ______________, 19__,
by and between ________________________________ (the "New Stockholder") and
________________, the New Stockholder's spouse, and Encore Acquisition Partners,
Inc., a Delaware corporation (the "Company"), pursuant to a certain
Stockholders' Agreement dated as of June ___, 1998 (the "Agreement"), among the
Company and all of its Stockholders.

                                   WITNESSETH:

         WHEREAS, the Company and the Stockholders and their respective spouses
entered into the Agreement to impose certain restrictions and obligations upon
themselves, and to provide certain rights, with respect to the shares of Common
Stock, par value $________ per share, of the Company; and

         WHEREAS, the New Stockholder desires to become a stockholder of the
Company; and

         WHEREAS, the Company and the Stockholders have required in the
Agreement that all persons to whom shares of the Company's Common Stock subject
to the Agreement are transferred and any other person acquiring shares of the
Company's Common Stock must enter into an Addendum Agreement binding the New
Stockholder and the New Stockholder's spouse to the Agreement to the same extent
as if they were original parties thereto and imposing the same restrictions and
obligations on the New Stockholder, the New Stockholder's spouse and the shares
of Common Stock to be acquired by the new Stockholder as are imposed upon the
Stockholders under the Agreement;

         NOW, THEREFORE, in consideration of the mutual promises of the parties
and as a condition of the purchase of the Common Stock of the Company, the New
Stockholder and the New Stockholder's spouse acknowledge that they have received
and read the Agreement and that the New Stockholder and the New Stockholder's
spouse shall be bound by, and shall have the benefit of, all of the terms and
conditions set out in the Agreement to the same extent as if they were original
parties to the Agreement. This Addendum Agreement shall not be attached to and
become a part of the Agreement.

         The New Stockholder shall become a [Management or Investor]
Stockholder.

         [The spouse of the New Stockholder joins in the execution of this
Agreement for the purpose set forth in Section 6.5 hereof.]

[Amend Section 4.1 if necessary to reflect appropriate schedule for new
Management Stockholder]

--------------------------------            --------------------------------
New Stockholder                             New Stockholder's Spouse

Address:

--------------------------------

--------------------------------

         AGREED TO on behalf of the Stockholders of the Company pursuant to
Section 3.1 of the Agreement.

-------------------------------

By:
   --------------------------------

   ---------------------, President

                                       31
<PAGE>   35

                                    EXHIBIT E

                            SMALL BUSINESS SIDELETTER

                                       32

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