UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Hugoton Energy Corporation
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(Name of Issuer)
Common Stock without par value
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(Title of Class of Securities)
444-613
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(CUSIP Number)
Thomas R. Denison, Esq.
GIBSON, DUNN & CRUTCHER
1801 California Street, Suite 4200
Denver, Colorado 80202
(303) 298-5700
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
September 7, 1995
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Statement because of Rule 13d-1(b)
(3) or (4), check the following box [ ]
Check the following box if a fee is being paid with the statement [X]
Page 1 of 19
<PAGE>
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Cusip No. 444-613
(1) NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
First Reserve Secured Energy Assets Fund, Limited Partnership
I.R.S. Identification No. 06-1232433
(2) Check the appropriate Box (a)
if a Member of a Group* (b)X
(3) SEC Use Only
(4) Source of Funds*
00
(5) Check if Disclosure of Legal Proceedings is Required to
Items 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organization
Delaware
NUMBER OF (7) Sole Voting Power
SHARES 0
BENEFICIALLY
OWNED BY (8) Shared Voting Power
EACH 1,833,956
REPORTING
PERSON (9) Sole Dispositive Power
WITH 0
(10) Shared Dispositive Power
1,833,956
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,833,956
(12) Check box if the Aggregate Amount in Row (11)
Excludes Certain Shares* [ ]
(13) Percent of Class Represented
by Amount in Row (11)
9.3%
(14) Type of Reporting Person*
PN
<PAGE>
Cusip No. 444-613
(1) NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
First Reserve Fund V, Limited Partnership.
I.R.S. Identification No.: 06-1295657
(2) Check the appropriate Box (a)
if a Member of a Group* (b)X
(3) SEC Use Only
(4) Source of Funds*
00
(5) Check if Disclosure of Legal Proceedings is Required to
Items 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organization
Delaware
NUMBER OF (7) Sole Voting Power
SHARES 0
BENEFICIALLY
OWNED BY (8) Shared Voting Power
EACH 2,138,802
REPORTING
PERSON (9) Sole Dispositive Power
WITH 0
(10) Shared Dispositve Power
2,138,802
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person
2,138,802
(12) Check box if the Aggregate Amount
in Row (11) Excludes Certain Shares* [ ]
(13) Percent of Class Represented by Amount in Row (11)
10.9%
(14) Type of Reporting Person*
PN
<PAGE>
Cusip 444-613
(1) Names of Reporting Person S.S.
or I.R.S. Identification No. of Above Persons
Comdisco, Inc.
36-2687938
(2) Check the appropriate Box (a)
if a Member of a Group* (b)
(3) SEC Use Only
(4) Source of Funds*
00,WC
(5) Check if Disclosure of Legal Proceedings is Required to
Items 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organization
Delaware
NUMBER OF (7) Sole Voting Power
SHARES 3,683,320
BENEFICIALLY
OWNED BY (8) Shared Voting Power
EACH 0
REPORTING
PERSON (9) Sole Dispositive Power
WITH 3,683,320
(10) Shared Dispositive Power
0
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,683,320
(12) Check box if the Aggregate Amount
in Row (11) Excludes Certain Shares* [ ]
(13) Percent of Class Represented by Amount in Row (11)
18.6%
(14) Type of Reporting Person*
CO
<PAGE>
Cusip No. 089324 20 6
1) Names of Reporting Person
S.S. or I.R.S. Identification No. of Above Persons
First Reserve Corporation
I.R.S. No.: 06-1210123
(2) Check the appropriate Box (a)
if a Member of a Group* (b)X
(3) SEC Use Only
(4) Source of Funds*
00
(5) Check if Disclosure of Legal Proceedings is Required to
Items 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organization
Delaware
NUMBER OF (7) Sole Voting Power
SHARES 0
BENEFICIALLY
OWNED BY (8) Shared Voting Power
EACH 5,226,936
REPORTING
WITH (9) Sole Dispositive Power
0
(10) Shared Dispositive Power
5,226,936
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
5,226,936
(12) Check box if the Aggregate Amount
in Row (11) Excludes Certain Shares* [ ]
(13) Percent of Class Represented by Amount in Row (11)
26.5%
(14) Type of Reporting Person*
CO
<PAGE>
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D (this "Schedule 13D")
relates to shares of the common stock, no par value of Hugoton Energy
Corporation, a Kansas corporation (the "Company"). The principal
executive offices of the Company are located at 301 N. Main, Suite
1900, Wichita, Kansas 67202. The Company's telephone number is
(316) 262-1522.
ITEM 2. IDENTITY AND BACKGROUND
This statement is being filed by First Reserve
Secured Energy Assets Fund, Limited Partnership ("FRSEA"), First
Reserve Fund V, Limited Partnership ("Fund V"), First Reserve
Corporation ("First Reserve") and Comdisco, Inc. ("Comdisco")
(collectively referred to herein as the "Reporting Parties"). FRSEA and
Fund V are both Delaware limited partnerships. Their principal purpose
is to make equity and debt investments in companies engaged in various
energy production, processing, transmission, distribution, marketing,
equipment manufacturing, electrical generation, and technical services,
and in energy assets such as oil and gas reserves or processing and
transmission facilities. Their principal offices are located at 475
Steamboat Road, Greenwich, CT 06830. First Reserve is a Delaware
corporation which raises funds for and manages FRSEA and Fund V (as
well as several other similar entities). First Reserve's principal
business is to act as the managing general partner and provide
investment management services to a limited number of investment
partnerships, including FRSEA and Fund V. First Reserve's offices are
also located at 475 Steamboat Road, Greenwich, CT 06830. Comdisco,
Inc., a Delaware corporation whose principal business is computer sales
and leasing, has its principal office located at 6111 North River Road,
Rosemont, IL 60018. The information required by Item 2 with respect to
the executive officers and directors of the Reporting Parties which are
corporations is found in Schedule I, attached hereto.
First Reserve Hill Partners Limited, a Delaware
corporation ("Hill") and First Reserve Hill Partners V Limited, a
Delaware corporation ("Hill V") are the special general partners of
FRSEA and Fund V, respectively. The principal business of Hill and Hill
V is to act as special general partner of the investment partnerships
FRSEA and Fund V. The principal offices of Hill and Hill V are located
at 475 Steamboat Road, Greenwich, CT 06830. The information required by
Item 2 with respect to the executive officers, directors and
controlling persons of Hill and Hill V is found in Schedule II,
attached hereto.
None of the Reporting Parties, Hill or Hill V has,
during the last five years, been convicted in a criminal proceeding.
Nor has any of the Reporting Parties, Hill or Hill V, during the last
five years, been a party to a civil proceeding or subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Reporting Parties were beneficial owners of
stock, either directly or indirectly, of Consolidated Oil & Gas, Inc.,
a Delaware corporation ("COG"). They acquired beneficial ownership of
the common stock of the Company through a merger of the Company and
COG. Pursuant to the Agreement and Plan of Merger dated May 26, 1995,
as amended, entered into between the Company and COG ("Agreement")
(attached hereto as Exhibit B), each share of COG stock held by the
Reporting Parties was exchanged for .7916 shares of Company Common
Stock and $3.0273 in cash. The source of funds for the shares of
Company Common Stock acquired by the Reporting Parties is therefore the
Reporting Parties' respective holdings of COG stock. In addition,
Comdisco has acquired a total of 47,000 shares of Company Common Stock
through market transactions using its own working capital.
Item 3 is inapplicable to Hill, Hill V and their
respective executive officers, directors and controlling persons.
<PAGE>
ITEM 4. PURPOSE OF TRANSACTION
The purpose of the transaction is for the Company to
acquire control of COG through a merger of COG with and into the
Company. Pursuant to the Agreement, each outstanding share of COG stock
was converted into the right to receive 0.7916 shares of Company Common
Stock, plus $3.0273 in cash. As a result of the Merger, COG
shareholders, in the aggregate, received $34,765,840 in cash and
9,090,736 shares of Company Common Stock (or approximately 46.2% of the
19,697,000 shares currently outstanding).
Also, as a result of the Merger, the Board of
Directors of the Company consists of nine members, three of which are
Class I members, serving a three year term ending in 1998; three of
which are Class II members, with a term ending in 1997; and three of
which are Class III members with a term ending in 1996. Pursuant to a
shareholder's agreement (attached hereto as Exhibit E and described in
Item 6), the Board of Directors was elected in the following manner:
(a) One Class II member designated by FRSEA;
(b) One Class II member designated by Fund V;
(c) One Class III member designated by First Reserve Corporation, provided
that such member be J.W.
Decker so long as he is an executive officer of the Corporation;
(d) One Class I member designated by Comdisco, Inc;
(e) Two Class III members designated by Floyd C. Wilson;
(f) One Class II member designated by Odyssey Partners, L.P.; and
(g) Two class I members designated by a vote of a majority of the
shareholders of the Corporation.
The initial directors elected pursuant to this subparagraph were
John. T. McNabb, II and David Elkouri.
ITEM 5. INTEREST IN SECURITIES OF ISSUER
(a) The Reporting Parties are the beneficial owners
of Company Common Stock in the numbers and percentages set forth in the
table below. The executive officers and directors of Comdisco and First
Reserve may be deemed beneficial owners of the shares held by Comdisco
and First Reserve, respectively. However, (i) such executive officers
and directors disclaim such beneficial ownership, and (ii) such
executive officers and directors are beneficial owners of no other
shares. Neither Hill nor any of its executive officers, directors or
controlling persons is beneficial owner of any Company Common Stock.
<TABLE>
<CAPTION>
Number of Shares Percentage of Class
Reporting Party <F1> Beneficially Owned of Security Owned
-------------------------- ------------------ -------------------
<S> <C> <C>
FRSEA .................... 1,833,956 9.3%
Fund V ................... 2,138,802 10.9%
Comdisco, Inc <F2> ....... 3,683,320 18.6%
First Reserve Corporation.<F3> 5,226,936 26.5%
<FN>
<F1> The Reporting Parties are making this single, joint filing because
they may be deemed to constitute a "group" within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
although neither the fact of this filing nor anything contained herein
shall be deemed to be an admission by the Reporting Parties that a
group exists or that First Reserve Corporation beneficially owns any of
the shares of Company Common Stock owned by the partnerships which it
manages.
<F2> Comdisco, Inc. is making this single, joint filing with the
other Reporting Persons for administrative convenience and does not
constitute an admission that it is it is a part of any "group" (as
defined above) with any other Reporting Party.
Page 7 of 19
<PAGE>
<F3> First Reserve Corporation is the managing general partner of FRSEA,
Fund V, and other entities, which collectively own 26.5% of the
outstanding shares of Company Common Stock.
</FN>
</TABLE>
(b) FRSEA and Fund V both share the power to vote or
to direct the vote and the power to dispose or direct the disposition
of all Shares held by them with their managing general partner First
Reserve. Comdisco, Inc. has the sole power to vote or to direct the
vote and sole power to dispose or direct the disposition of all Shares
held by it. The Reporting Parties have the following powers with
respect to the Company Common Stock they beneficially own. Item 5(b) is
inapplicable to Hill and Hill V and their executive officers, directors
and controlling persons.
<TABLE>
<CAPTION>
Sole Voting Shared Voting Sole Dispositive Shared Dispositive
Reporting Party Power Power Power Power
------------------------ ----------- ------------- ---------------- ------------------
<S> <C> <C> <C> <C>
FRSEA ................... 0 1,833,956 0 1,833,956
Fund V .................. 0 2,138,802 0 2,138,802
Comdisco, Inc ........... 3,683,320 0 3,683,320 0
First Reserve Corporation 0 5,226,936<F1> 0 5,226,936
<FN>
<F1> Includes ownership of FRSEA and Fund V.
</FN>
</TABLE>
(c) Comdisco purchased 41,500 shares of Company
Common Stock in the open market with a settlement date in August 1995,
12,500 shares with a settlement date of September 8, 1995, and 3,000
shares with a settlement date of September 13, 1995. Except as
disclosed above, within the knowledge of the Reporting Parties, Hill
and Hill V, no transactions in Shares other than the Merger were
effected during the past 60 days by such persons, or, with respect to
Comdisco, First Reserve, Hill and Hill V, the executive officers,
directors and controlling persons (if any) of such persons.
(d) First Reserve Corporation is the managing general
partner of FRSEA and Fund V. In this position, it has the power to
direct the receipt of dividends from, or the proceeds of sale of, any
securities beneficially owned by the Reporting Parties. No other person
is known to have the right to receive or the power to direct the
receipt of dividends from, or the proceeds of sale of, any securities
beneficially owned by the Reporting Parties.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS
a. Shareholders Agreement to Approve Merger
At the time the Agreement was entered into, holders
of 6,235,134 shares of the Company (approximately 59% of the shares
entitled to vote) entered into a Shareholders Agreement ("Shareholder
Agreement") with COG (attached hereto as Exhibit D). Under the
Shareholder Agreement, these shareholders pledged to support the Merger
and to vote all of the shares of Company Common Stock under their
control in favor of the Agreement, unless the Agreement was terminated
thereafter in accordance with its terms.
b. Registration Rights Agreement and Future Sales Rights
Pursuant to the Agreement, the Company has promised
to file a registration statement with the Securities and Exchange
Commission (the "Commission") as soon as practicable for the purpose of
registering the shares issued in the Merger under the Securities Act of
1933. The Company also promised to use all reasonable efforts to have
the registration statement declared effective by the Commission. The
Company will file the registration statement on Form S-3, and the
Agreement provides that the company shall maintain such registration
Page 8 of 19
<PAGE>
statement in effect for two years. The registration statement will
cover the offer and sale from time to time by the former stockholders
of COG of the shares of Company Common Stock to be issued to such
holders pursuant to the Merger. However, no COG stockholder receiving
such shares shall, pursuant to such registration, sell more than 1% of
the total amount of Company Common Stock outstanding during any
calendar quarter.
Further, the Company, certain existing shareholders
of the Company, and the COG shareholders entered into a Registration
Rights Agreement (attached hereto as Exhibit F). The Company must offer
the parties to the Registration Rights Agreement the opportunity to
include their shares in any registered offering made by the Company
subject to certain limitations. In addition, some shareholders of the
Company, including the Reporting Parties, have the right to require the
Company to use its best efforts to cause the registration and sale in
an underwritten public offering of all or a portion of their shares
(but not less than 200,000 shares).
c. Shareholder Agreement
The Company, the Reporting Parties (except for First
Reserve) and other Shareholders of the Company have entered into an
Agreement of Shareholders, dated as of September 7, 1995 (attached
hereto as Exhibit E), pursuant to which the parties have agreed to
cause the Board of Directors of the Company to be elected in the manner
set forth in Item 4. A party who has rights to appoint a director
pursuant to the Agreement of Shareholders will lose such right in the
event such party's ownership of Company Common Stock falls below 5%;
provided, however, that the Board shall be reduced in number so as to
eliminate the position to which such party was allowed to appoint a
director.
ITEM 7. EXHIBITS
Exhibit A Agreement Concerning Filing of Schedule 13D.
Exhibit B Agreement and Plan of Merger, dated May 26, 1995,
among the Company and COG, as amended (included as
Appendix A to the Proxy Statement incorporated by
reference herein as Exhibit G).
Exhibit C Option to Purchase COG Common Stock given to the
Company by COG shareholders.
Exhibit D Shareholder Agreement between COG and shareholders
of the Company pledging support of shareholders for
Merger.
Exhibit E Agreement of Shareholders between the Company and
shareholders of COG.
Exhibit F Registration Rights Agreement between the Company
and the shareholders of COG.
Exhibit G Proxy Statement for Special Meeting of Stockholders,
held September 7, 1995 (File No. 0-23166).
Page 9 of 19
<PAGE>
INTENTIONALLY BLANK
Page 10 of 19
<PAGE>
Schedule I
-----------
1. The name, business address, and present principal
occupation or employment of each of the executive officers and
directors of First Reserve Corporation are set forth below. Unless
otherwise indicated, (i) the business address of each is 475 Steamboat
Road, Greenwich, Connecticut 06830; (ii) each such person is a citizen
of the United States; (iii) such person does not have any other
principal occupation; (iv) in the last five years, none have been
convicted in a criminal proceeding (excluding traffic violations, or
similar misdemeanors); and (v) in the last five years, none have been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in (y) such person becoming subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to federal or state
securities laws or (z) a finding of any violation with respect to such
laws.
Name and Position with
First Reserve Corporation
-------------------------
William E. Macaulay
President and Chief Executive
Officer, Managing Director and Director
John A. Hill
Chairman, Managing Director and Director
David H. Kennedy
Managing Director and Director
Elizabeth Foley
Managing Director, Treasurer
and Secretary
Cathleen M. Ellsworth
Vice President
Bruce M. Rothstein
Vice President
Page 11 of 19
<PAGE>
Schedule I (Cont.)
------------------
2. The name, business address, and present principal occupation or
employment of each of the executive officers and directors of
Comdisco, Inc. are set forth below. Unless otherwise indicated, (i)
the business address of each is 6111 N. River Road, Rosemont, Illinois
60018; (ii) each such person is a citizen of the United States; (iii)
such person does not have any other principal occupation; (iv) in the
last five years, none have been convicted in a criminal proceeding
(excluding traffic violations, or similar misdemeanors); and (v) in
the last five years, none have been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction resulting in
(y) such person becoming subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to federal or state securities laws or (z) a finding of any
violation with respect to such laws.
Name and Position with
Comdisco, Inc.
-------------------
Alan J. Andreini Executive Vice President
Robert A. Bardagy Executive Vice President
Philip A. Hewes Senior Vice President/Legal
Nicholas K. Pontikes Executive Vice President
John J. Vosicky Executive Vice President, CFO & Treasurer
William N. Pontikes Executive Vice President
Jack Slevin President and Chief Executive Officer
David J. Keenan Vice President & Controller
John C. Kenning Senior Vice President
Page 12 of 19
<PAGE>
Schedule II
-----------
The name, business address, and present principal
occupation or employment of each of the executive officers, directors
and controlling persons of First Reserve Hill Partners Limited and
First Reserve Hill Partners V Limited are set forth below. Unless
otherwise indicated, (i) the business address of each is 475 Steamboat
Road, Greenwich, Connecticut 06830; (ii) each such person is a citizen
of the United States; (iii) such person does not have any other
principal occupation; (iv) in the last five years, none have been
convicted in a criminal proceeding (excluding traffic violations, or
similar misdemeanors); and (v) in the last five years, none have been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in (y) such person becoming subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to federal or state
securities laws or (z) a finding of any violation with respect to such
laws.
Name and Position with
First Reserve Hill Partners Limited
-----------------------------------
John A. Hill
Director, Vice President
David H. Kennedy
Director, Treasurer
William E. Macaulay
Director, President
Name and Position with
First Reserve Hill Partners V Limited
-------------------------------------
John A. Hill
Director, President
David H. Kennedy
Director, Vice President
Elizabeth Foley
Director, Secretary
William E. Macaulay
Director
Page 13 of 19
<PAGE>
EXHIBIT A
---------
Agreement Concerning Filing of Schedule 13D
First Reserve Secured Energy Assets
Fund, Limited Partnership, a Delaware limited partnership ("FRSEA"),
First Reserve Fund V, Limited Partnership, a Delaware limited
partnership ("Fund V"), First Reserve Corporation, a Delaware
corporation ("First Reserve"), and Comdisco, Inc., a Delaware
corporation ("Comdisco"), pursuant to Rule 13d-1(f) promulgated under
the Securities Exchange Act of 1934, as amended, hereby agree to the
joint filing with the other Reporting Parties on behalf of each of
them of a statement on Schedule 13D with respect to a Common Stock,
without par value, of Hugoton Energy Corporation and that this
agreement be included as an exhibit to such joint filing.
FRSEA, Fund V, First Reserve, and Comdisco separately
acknowledge that they are each responsible for the timely filing of
such statement and any amendments thereto, and for the completeness
and accuracy of the information concerning them contained therein. No
party to this Agreement is responsible for the completeness or
accuracy of the information concerning the other parties, unless such
party knows or has reason to believe that such information is
inaccurate.
This agreement may be executed in any number of counterparts
all of which taken together shall constitute one and the same
instrument.
Dated as of the 7th day of September, 1995.
First Reserve Secured Energy Assets Fund,
Limited Partnership, a Delaware limited partnership
By: First Reserve Corporation, a Delaware
corporation, as managing general partner
Name: /S/ William E. Macaulay
Title: President
First Reserve Fund V, Limited Partnership,
a Delaware limited partnership
By: First Reserve Corporation, as
managing general partner
Name: /S/ William E. Macaulay
Title: President
First Reserve Corporation, a Delaware corporation
Name: /S/ William E. Macaulay
Title: President
Page 14 of 19
<PAGE>
Comdisco, Inc., a Delaware corporation
Name: /S/ Alan J. Andreini
Title: Executive Vice President
Page 15 of 19
<PAGE>
EXHIBIT C OPTION TO PURCHASE COG COMMON STOCK
EXECUTION COPY
THE TRANSFER OF THIS OPTION IS SUBJECT TO CERTAIN RESTRICTIONS
OPTION TO PURCHASE CLASS A COMMON STOCK AND COMMON STOCK
OF
CONSOLIDATED OIL & GAS, INC.
NEITHER THIS OPTION NOR THE OPTION SHARES OF CLASS A COMMON STOCK AND COMMON
STOCK SUBJECT HERETO HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER SUCH ACT OR LAWS OR AN
OPINION OF COUNSEL FOR THE HOLDER OF THIS OPTION, OR THE OPTION SHARES SUBJECT
HERETO, REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, OFFER FOR
SALE, PLEDGE, HYPOTHECATION, OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND LAWS; OR THE COMPANY
OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.
---------------------
This certifies that, for value received, Hugoton Exploration Corporation, a
Kansas corporation ("Holder"), is entitled, subject to the terms set forth
herein, to purchase all of the shares of Class A Common Stock, par value $.01,
and common stock, par value $.01, of Consolidated Oil & Gas, Inc., a Delaware
corporation (the "Company") held by the undersigned shareholders of the Company
(the "Company Shareholders") (together, the "Option Shares").
1. Option Payment. In consideration of a promissory note from
Holder in the face amount of Three Million Dollars ($3,000,000) bearing interest
at 10% per annum from and after the Exercise Date (defined below) and payable on
demand after the Exercise Date (the "Option Payment"), secured by a letter of
credit on terms reasonably acceptable to the Company Shareholders, paid by
Holder to the Company Shareholders in proportion to their ownership of Option
Shares, receipt of which is hereby acknowledged by the Company Shareholders, the
Company Shareholders grant this Option to Holder.
2. Term. This Option and Holder's rights pursuant
hereto shall expire on the earlier of (i) 45 days after the Registration
Statement is cleared by the SEC , and (ii) November 30, 1995 (the "Exercise
Date").
3. Notice of Exercise. If Holder chooses to exercise its
rights hereunder, Holder shall deliver to the Company Shareholders a "Notice of
Exercise." The Notice of Exercise shall be written, shall state Holder's
intention to exercise its rights hereunder, and shall be delivered to the
Company Shareholders at the addresses given in the Merger Agreement (as such
term is defined below) no later than 10 days prior to the Exercise Date.
4. Exercise and Strike Price. If the Company
Shareholders receive the Notice of Exercise as provided in Section 3, the
following provisions shall take effect:
(i) For each Option Share held by the Company
Shareholders, Holder (or an affiliate thereof) shall pay an amount equal to (A)
0.7916 shares of the common stock of Holder, without par value (subject to
adjustment pursuant to subsection (iv) below, "Holder Common Stock"), plus (B)
cash in the amount of $3.0477 (collectively, with the Holder Common Stock, the
"Strike Price"). The Option Shares shall be conveyed to Holder by sale,
assignment, transfer and conveyance of the Option Shares pursuant to a stock
purchase agreement (the "Purchase Agreement") containing terms substantially
similar to those in the Agreement and Plan of Merger (the "Merger Agreement"),
by and among Holder, said wholly owned subsidiary, and Company, executed of even
date herewith, unless the Company Shareholders elect pursuant to subsection (ii)
to consummate the Merger (as that term is defined in the Merger Agreement).
(ii) Following receipt of the Notice of Exercise
and prior to the Exercise Date, the Company Shareholders may elect (by majority
vote) to cause the Merger and to receive the Strike Price as consideration for
the merger of the Company with and into a wholly owned subsidiary of Holder,
pursuant to the terms and conditions of the Merger Agreement, in lieu of
consummating the Purchase Agreement. The Company Shareholders shall make the
election contemplated by this subsection (ii) before three business days prior
to the Exercise Date by delivering to Holder a written "Notice of Election,"
executed by Company Shareholders holding a majority of the voting power of the
outstanding shares of stock of the Company entitled to vote.
(iii) Regardless of whether Company Shareholders
make the election contemplated by subsection (ii), the number of shares of
Holder Common Stock required to be given in exchange for each Option Share upon
exercise of this Option shall be adjusted as provided in Section 1.08 of the
Merger Agreement.
5. Return of Option Payment. If on the Exercise Date (i)
Parent and Subsidiary have satisfied all of their conditions to closing and
fulfilled their obligations or covenants under the Purchase Agreement (or the
Merger Agreement, as the case may be) and, (ii) Parent and Subsidiary are ready,
willing and able to close on the Exercise Date and, (iii) the Company
Shareholders and the Company have failed to fulfill any of its material
obligations or covenants under the Purchase Agreement (or the Merger Agreement,
as the case may be), the Company Shareholders shall return the Option Payment to
Holder. Provided, however, in the event that neither party can fulfill its
obligations under the Merger Agreement the Option Payment shall be returned to
Holder.
6. Transferability. This Option shall be transferable
only among affiliates of the Holder.
7. Loss of Option Certificate. Upon receipt by the Company
Shareholders of satisfactory evidence of the loss, theft, destruction or
mutilation of this Option and either (in the case of loss, theft or destruction)
reasonable indemnification, or (in the case of mutilation) the surrender of this
Option for cancellation, the Company Shareholders will execute and deliver to
Holder, without charge, a new Option of like denomination.
8. Limited Rights of Option Holder. The Holder shall not,
solely by virtue of being the Holder of this Option, have any of the rights of a
holder of voting securities of the Company, either at law or equity, until such
Option shall have been duly exercised.
9. Escrow of Option Shares. Contemporaneously with the
execution hereof, Company Shareholders shall place in escrow the Option Shares
on terms reasonably acceptable to Holder.
10. Mandatory Sale. To the extent that less than all of the
shareholders of Company have executed this Option, the Company Shareholders
agree to execute their right to a "Mandatory Sale" by all shareholders pursuant
to the Third Amended and Restated Agreement of Shareholders with the Company.
11. Tax Matters. To the extent the Company Shareholders elect
to receive the Strike Price pursuant to Section 4.(ii), each Company Shareholder
represents and warrants that he has, and as of the Exercise Date, will have, no
present plan, intention or arrangement to dispose of any of the Holder Common
Stock received in the Merger if such disposition would reduce the fair market
value of Holder Common Stock (with such fair market value measured as of the
Exercise Date) retained by such shareholder to an amount less than fifty percent
of the fair market value of the Company stock held by such shareholder
immediately before the Merger.
12. Miscellaneous.
(a) Applicable Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS, BUT NOT THE
CHOICE OF LAW PROVISIONS, OF THE STATE OF DELAWARE.
(b) Headings. The headings herein are for
convenience only and are not part of this Option and shall not affect the
interpretation thereof.
(c) Arbitration. Any controversy, dispute, or claim
arising out of, in connection with, or in relation to, the
interpretation, performance or breach of this Option, including,
without limitation, the validity, scope, and enforceability of this
Section 9(c), may at the election of any party be solely and finally
settled by arbitration conducted in Kansas, by and in accordance with
the then-existing rules for commercial arbitration of the American
Arbitration Association, or any successor organization. Judgment upon
any award rendered by the arbitrator(s) may be entered by the State or
Federal Court having jurisdiction thereof. Any of the parties may
demand arbitration by written notice to the other and to the American
Arbitration Association ("Demand for Arbitration"). Any Demand for
Arbitration pursuant to this Section 9(c) shall be made within one (1)
year from the date that the dispute upon which the demand is based
arose. The parties intend that this agreement to arbitrate be valid,
enforceable and irrevocable.
(d) Attorney's Fees. If any suit, action, or
arbitration arising out of or related to this Option is brought by any
party, the prevailing party or parties shall be entitled to recover the
costs and fees (including without limitation reasonable attorneys'
fees, the fees and costs of experts and consultants, copying, courier
and telecommunication costs, and deposition costs and all other costs
of discovery) incurred by such party or parties in such suit or action,
including without limitation any post-trial or appellate proceeding, or
in the collection or enforcement of any judgment or award entered or
made in such suit or action.
(e) Binding Effect. This Option shall be
binding upon and shall inure to the benefit of the Company Shareholders, the
Holder and their respective successors, permitted assigns, heirs and legal
representatives, as the case may be.
(f) Defined Terms. All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Merger
Agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned Company Shareholders have
caused this Option to be executed by an appropriate officer thereof as of the
26th day of May, 1995.
Company Shareholders
First Reserve Secured Energy Assets Fund, Limited
Partnership, a Delaware limited partnership
By: First Reserve Corporation, a Delaware
corporation, as managing general partner
/s/
Name: __________________________
Title: __________________________
First Reserve Fund V, Limited Partnership, a Delaware
limited partnership
By: First Reserve Corporation, as managing general
partner
/s/
Name: __________________________
Title: __________________________
American Gas & Oil Investors, Limited Partnership, a
New York limited partnership
By: First Reserve Corporation, as managing general
partner
/s/
Name: __________________________
Title: __________________________
<PAGE>
AmGO II, Limited Partnership, a New York limited
partnership
By: First Reserve Corporation, as managing general
partner
/s/
Name: __________________________
Title: __________________________
AmGO III, Limited Partnership, a New York limited
partnership
By: First Reserve Corporation, as managing general
partner
/s/
Name: __________________________
Title: __________________________
Comdisco, Inc., a Delaware corporation
/s/
Name: _____________________________
Title _____________________________
/s/
J.W. Decker
ACKNOWLEDGED AND AGREED
TO BY HOLDER:
Hugoton Exploration Corporation,
a Kansas corporation
/s/
Name: __________________
Title: __________________
<PAGE>
EXHIBIT D SHAREHOLDER AGREEMENT BETWEEN COG AND SHAREHOLDER OF COMPANY
SHAREHOLDER AGREEMENT
This Agreement of Shareholders (this "Agreement") dated as of
May 26, 1995, is entered into by and among Hugoton Energy Corporation, a Kansas
corporation (the "Parent"), Consolidated Oil & Gas, Inc., a Delaware corporation
(the "Corporation"), and the undersigned shareholders of Parent (the
"Shareholders").
RECITALS
A. The Corporation has entered into an Agreement and
Plan of Merger with Parent, Hugoton Exploration Corporation and the Corporation
dated May 26, 1995 (the "Merger Agreement").
B. As a condition to the execution of the Merger
Agreement, the Shareholders are entering into this Agreement to determine
certain aspects of the governance of the Parent regarding the issuance of
shares in connection with the Merger Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual promises
contained herein, the parties agree as follows:
ARTICLE I
SHAREHOLDER VOTING REGARDING THE MERGER
Notwithstanding any provision of Parent's certificate of
incorporation or bylaws, as amended, to the contrary, the Shareholders hereby
agree to vote all shares of equity securities of the Parent held by them
("Stock") in favor of the Merger Agreement unless the Merger Agreement has been
terminated in accordance with its terms.
ARTICLE II
MISCELLANEOUS
Section 2.1 Term. This Agreement shall terminate and be of
no further force and effect at the termination of the Merger Agreement.
Section 2.2 Execution by Transferee. Notwithstanding anything
herein to the contrary, as a condition to any sale, transfer, pledge or other
disposition of Stock, the transferee, unless he is already a signatory to this
Agreement, shall become a signatory to this Agreement.
<PAGE>
Section 2.3 Successors. This Agreement shall be binding upon
and shall operate for the benefit of Corporation, its shareholders, and their
respective successors, assigns, executors, administrators and heirs, and it
shall be binding upon any entity to whom any Stock of Parent is transferred in
accord with or in violation of the provisions of this Agreement, and the
executor or administrator of such entity.
Section 2.4 Modification.
2.4.1 No modification, amendment or waiver of any of
the provisions of this Agreement shall be effective unless in writing
and signed by all parties hereto.
2.4.2 Each Shareholder covenants not to vote any
Stock in favor of any amendment of the certificate of incorporation or
bylaws of Parent, if such amendment would materially modify the terms
or frustrate the purpose of this Agreement or the consummation or
approval of the Merger Agreement, unless the vote on such amendment is
approved unanimously by the parties to this Agreement.
Section 2.5 Non-Waiver. The failure to enforce at any time any
of the provisions of this Agreement, or to require at any time performance by
any other party of any of the Provisions hereof, shall in no way be construed to
be a waiver of such provisions.
Section 2.6 Partial Invalidity. If any clause, sentence,
paragraph, section or part of this Agreement shall be deemed invalid,
unenforceable or against public policy, the part which is invalid, unenforceable
or contrary to public policy shall not affect, impair, invalidate or nullify the
remainder of this Agreement, but the invalidity, unenforceability or
contrariness to public policy shall be confined only to the clause, sentence,
paragraph, section or part of this Agreement so invalidated, unenforceable or
against public policy.
Section 2.7 Entire Agreement. This Agreement contains the full
understanding of the parties hereto with respect to the subject matter hereof,
and there are no representations, warranties, agreements or understandings other
than expressly contained herein.
Section 2.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF KANSAS, WITHOUT REGARD TO
ITS CONFLICTS OF LAW PRINCIPLES.
<PAGE>
Section 2.9 Execution in Counterpart. This Agreement may be
executed in one or more identical counterparts, which when taken together, will
constitute one, fully executed, original document.
Section 2.10 Arbitration. Any controversy, dispute, or claim
arising out of, in connection with, or in relation to, the interpretation,
performance or breach of this Agreement, including, without limitation, the
validity, scope and enforceability of this Section 2.10, may at the election of
any party, be solely and finally settled by arbitration conducted in Kansas, by
and in accordance with the then existing rules for commercial arbitration of the
American Arbitration Association, or any successor organization. Judgment upon
any award rendered by the arbitrator(s) may be entered by the state or federal
court having jurisdiction thereof. Any of the parties may demand arbitration by
written notice to the other and to the American Arbitration Association ("Demand
for Arbitration"). Any Demand for Arbitration pursuant to this Section 2.10
shall be made before the earlier of (i) the expiration of the applicable statute
of limitations with respect to such claim, or (ii) 60 days from the date on
which a lawsuit is brought by any other party with respect to such claim. The
parties intend that this agreement to arbitrate be valid, enforceable and
irrevocable. Time is of the essence in the resolution of any such dispute, and
the parties agree to instruct the arbitrator to institute accelerated procedures
to resolve any dispute. The losing party shall reimburse the prevailing party in
such arbitration for the prevailing party's legal fees and expenses reasonably
incurred in connection with such arbitration.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
CONSOLIDATED OIL & GAS, INC. HUGOTON ENERGY CORPORATION,
a Delaware corporation a Kansas corporation
By: /s/ By: /s/
Name: J.W. Decker Name: Floyd C. Wilson
Title: Chief Executive Office Title: Chief Executive Officer
<PAGE>
ODYSSEY PARTNERS, L.P.
By: /s/
Name:
Title:
/s/
Floyd C. Wilson
<PAGE>
EXHIBIT E AGREEMENT OF SHAREHOLDERS BETWEEN THE COMPANY AND SHAREHOLDERS OF
COG
EXECUTION COPY
AGREEMENT OF SHAREHOLDERS
This Agreement of Shareholders (this "Agreement") dated as of
September 7, 1995, is entered into by and between Hugoton Energy Corporation, a
Kansas corporation ("Corporation"), and the undersigned shareholders of
Corporation (the "Shareholders").
RECITALS
A. Corporation was formed and organized under the laws
of the State of Kansas on April 23, 1987.
B. Pursuant to the Agreement and Plan of Merger by and
among Corporation, Hugoton Exploration Corporation and Consolidated Oil & Gas,
Inc. ("COG"), the shareholders of COG collectively received 9,090,736 shares of
the common stock of Corporation, without par value (the "Common Stock").
C. As of the date hereof, the Shareholders collectively
own 78.56% of the issued and outstanding shares of the Common Stock, as follows:
SHAREHOLDER SHARES PERCENTAGE
----------- --------- ----------
AmGO 780,407 3.96%
AmGO II 407,276 2.07%
AmGO III 66,495 0.34%
FRSEA 1,833,956 9.31%
Fund V 2,138,802 10.86%
J.W. Decker 237,480 1.83%
Comdisco, Inc. 3,626,320 18.41%
Floyd Wilson 4,128,048 20.96%
Odyssey Partners, L.P. 2,132,086 10.82%
---------- ------
TOTAL 15,350,870 78.56%
========== ======
D. Shareholders desire to promote their mutual interests
and the interests of Corporation by imposing certain restrictions and
obligations upon themselves, Corporation and the shares of Common Stock.
1
<PAGE>
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual promises
contained herein, it is mutually agreed that:
ARTICLE I
TRANSACTION
Shareholders acknowledge that this Agreement represents only
one aspect of a series of transactions among Shareholders, COG and Corporation.
ARTICLE II
ELECTION OF DIRECTORS
Notwithstanding any provision of Corporation's certificate of
incorporation or bylaws, as amended to the contrary, the Shareholders agree, so
long as they own such shares, to vote their shares of Common Stock to ensure
that the following shall occur.
Section 2.1 The Board of Directors of Corporation (the
"Board"), which is divided into three classes, shall initially consist of nine
members. Class I members having a three-year term ending in 1998; Class II
members having a term ending in 1997; and Class III members having terms ending
in 1996. Each class shall be subject to re-election pursuant to the terms
hereof.
Section 2.2 The Shareholders shall use their best efforts
(including voting the shares owned by them and their affiliates, in calling
special meetings of the Shareholders and executing and delivering written
consents, to elect nine members of the Board of Directors of the Corporation
(the "Board")), consisting of the following:
(a) One Class II member designated by FRSEA;
(b) One Class II member designated by Fund V;
(c) One Class III member designated by First
Reserve Corporation (provided that such
member shall be J.W. Decker so long as he is
an executive officer of the Corporation);
(d) One Class I member designated by Comdisco,
Inc.;
(e) Two Class III members designated by Floyd C.
Wilson;
(f) One Class II member designated by Odyssey
Partners, L.P.; and
(g) Two members designated by a vote of a majority of
the Shareholders of Corporation (both of which shall be members of
Class I); provided that the Shareholders agree that the initial
directors nominated for election pursuant to this subparagraph (g)
shall be John T. McNabb, II and David Elkouri.
Class I, Class II and Class III members shall have terms
expiring in accordance with the Company's by-laws.
Section 2.3 The party designating a director may remove such
director and designate his or her successor. If the director designated by a
party resigns, dies, becomes
2
<PAGE>
incapacitated or is otherwise unable to serve, the
party designating such director may designate his or her successor. All
Shareholders shall vote all shares held by them in favor of the election or
removal of the persons so designated. Action taken by any of the Shareholders in
designating or removing directors shall be in writing executed by the
Shareholder entitled to take such action and promptly delivered to the other
Shareholders and Corporation.
Section 2.4 Termination of Right to Elect Directors.
2.4.1 Each Shareholder's right to designate a director shall
terminate if such Shareholder's ownership of Common Stock is below 5% of the
outstanding Common Stock; except for Mr. Decker, whose board seat, upon
reelection or vacancy, shall be designated by First Reserve Corporation (whose
stock ownership for the purpose of this Section 2.4.1 shall be the aggregate
ownership of their managed funds). Provided, however, that if Mr. Wilson is not
the Chief Executive Officer of the Corporation and his ownership is less than
10% and more than 5% of the outstanding Common Stock, Mr. Wilson's right to
designate directors shall be reduced from two to one.
2.4.2 If a shareholder (the "Selling Shareholder") is no
longer eligible to designate a director, or, in the case of John T. McNabb, II,
he is unable to serve, then the board shall (i) shrink the size of the board,
(ii) leave the vacated seat empty, or (iii) appoint a replacement to serve until
the next election of directors by shareholders and through its normal nominating
procedure, select a nominee to fill the open seat for election by shareholders
at the next annual meeting.
ARTICLE III
RESTRICTIVE LEGEND
Each certificate evidencing Common Stock subject hereto shall
bear a legend as follows:
The shares of stock represented by this
certificate are, until sale, subject to an Agreement of
Shareholders, dated as of September 7, 1995, a copy of which
is on file in the office of Corporation.
Any certificate evidencing Common Stock subject to this
Agreement which is hereafter issued shall bear the same legend.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Term. This Agreement shall terminate and be of no
further force and effect at the close of business on September 7, 2005;
provided, however, that this Agreement may be terminated by the vote of the
holders of at least 100% of the shares of Common Stock subject hereto.
Section 4.2 Notices. Any notice to be given by any party
hereunder to any other shall be in writing, mailed by certified or registered
mail, return receipt requested, shall be addressed to all other parties at the
addresses set forth under their signatures:
All such notices shall be deemed to be given three days after
the date of mailing thereof.
3
<PAGE>
Section 4.3 Modification.
4.3.1 Notwithstanding anything to the contrary in
this Agreement or otherwise, no modification, amendment or waiver of
any of the provisions of this Agreement shall be effective unless in
writing and signed by all parties hereto.
4.3.2 Each Shareholder covenants not to vote any
shares of Common Stock in favor of any amendment of the certificate of
incorporation or bylaws of corporation, if such amendment would
materially modify the terms or frustrate the purpose of this Agreement,
unless the vote on such amendment is approved unanimously by the
parties to this Agreement.
Section 4.4 Non-Waiver. The failure to enforce at any time any
of the provisions of this Agreement, or to require at any time performance by
any other party of any of the Provisions hereof, shall in no way be construed to
be a waiver of such provisions.
Section 4.5 Partial Invalidity. If any clause, sentence,
paragraph, section or part of this Agreement shall be deemed invalid,
unenforceable or against public policy, the part which is invalid, unenforceable
or contrary to public policy shall not affect, impair, invalidate or nullify the
remainder of this Agreement, but the invalidity, unenforceability or
contrariness to public policy shall be confined only to the clause, sentence,
paragraph, section or part of this Agreement so invalidated, unenforceable or
against public policy.
Section 4.6 Entire Agreement. This Agreement contains the full
understanding of the parties hereto with respect to the subject matter hereof,
and there are no representations, warranties, agreements or understandings other
than expressly contained herein.
Section 4.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF KANSAS, WITHOUT REGARD TO
ITS CONFLICTS OF LAW PRINCIPLES.
Section 4.8 Execution in Counterpart. This Agreement may be
executed in one or more identical counterparts, which when taken together, will
constitute one, fully executed, original document.
Section 4.9 Transfer. The right to appoint directors hereunder
is a personal right and may not be transferred by operation of law or
voluntarily, except among affiliates under common control.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
COMPANY SHAREHOLDERS
HUGOTON ENERGY FIRST RESERVE FUND V, LIMITED
CORPORATION, a Kansas corporation PARTNERSHIP, a Delaware limited partnership
/s/ By: First Reserve Corporation,
as managing general partner
Name: ______________________
Title: ______________________ /s/
Name: _________________________
Title: _________________________
FIRST RESERVE SECURED ENERGY ASSETS FUND,
LIMITED PARTNERSHIP, a Delaware limited
partnership
By: First Reserve Corporation,
as managing general partner
/s/
Name: __________________________
Title: __________________________
5
<PAGE>
AMERICAN GAS & OIL INVESTORS, LIMITED
PARTNERSHIP, a New York limited partnership
By: First Reserve Corporation,
as managing general partner
/s/
Name: __________________________
Title: __________________________
AmGO II, LIMITED PARTNERSHIP,
a New York limited partnership
By: First Reserve Corporation,
as managing general partner
/s/
Name: __________________________
Title: __________________________
AmGO III, LIMITED PARTNERSHIP,
a New York limited partnership
By: First Reserve Corporation,
as managing general partner
/s/
Name: __________________________
Title: __________________________
/s/ J.W. Decker
COMDISCO, INC. a Delaware corporation
By: /s/ Alan Andreini
Name: ________________________________
Title: ________________________________
ODYSSEY PARTNERS, L.P.
By: /s/
Name: Stephen Berger
Title: General Partner
/s/
Floyd C. Wilson
6
<PAGE>
EXHIBIT F REGISTRATION RIGHTS AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDERS OF COG
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") dated as
of September 7, 1995, is entered into by and among (i) Hugoton Energy
Corporation, a Kansas corporation ("Corporation"), (ii) Odyssey Partners, L.P.
("Odyssey"), (iii) Cramer, Rosenthal, McGlynn, Inc. ("CRM"), (iv) American Gas &
Oil Investors, Limited Partnership, a New York limited partnership; AmGO II,
Limited Partnership, a New York limited partnership; AmGO III, Limited
Partnership, a New York limited partnership; First Reserve Secured Energy Assets
Fund, Limited Partnership, a Delaware limited partnership; First Reserve Fund V,
Limited Partnership, a Delaware limited partnership (collectively, the "First
Reserve Group"); (v) COMDISCO, Inc., a Delaware corporation ("Comdisco"); and
(vi) Floyd C. Wilson (collectively, Odyssey, CRM, the First Reserve Group,
Comdisco and Mr. Wilson shall be referred to as the "Shareholders").
RECITALS
A. Pursuant to the Agreement and Plan of Merger by and among
Corporation and Consolidated Oil & Gas, Inc., ("COG") executed contemporaneously
herewith (the "Merger Agreement"), the First Reserve Group and Comdisco will
collectively receive an aggregate of 9,090,736 shares of the common stock of
Corporation, without par value (the "Common Stock").
B. CRM and Odyssey have certain registration rights
pursuant to _____________________and _____________________ ("Prior Agreements").
C. As a condition of the Merger Agreement and in replacement
of all rights under Prior Agreements, Corporation has agreed to grant to
Shareholders registration rights with respect to their Common Stock, as more
fully described below.
D. All terms used but not defined in this Agreement
shall have the meaning ascribed to them in the Merger Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual promises
contained herein, it is mutually agreed as follows:
Section 1 Piggy-Back Registration Rights.
1.1 If Corporation proposes to file, on its behalf and/or on
behalf of any Shareholder, a registration statement under the Securities Act of
1933, as amended (the "Securities Act") on Form S-1, S-2 or S-3 ("Registration
Statement"), other than in connection with a dividend reinvestment, employee
stock purchase, option or similar plan or in connection with a merger,
consolidation or reorganization, Corporation shall give written notice to each
Shareholder at least thirty days before the filing with the Securities Exchange
Commission ("SEC") of such Registration Statement. Such notice shall offer to
include in such filing all or a portion of the Common Stock owned by each
Shareholder. Each Shareholder ("Selling Shareholder" or collectively, "Selling
Shareholders") who desires to include all or a portion of its shares of Common
Stock in such Registration Statement shall give written notice to Corporation
within 20 days after the date of mailing of such offer specifying the amount of
Common Stock to be registered (for the purpose of this Section 1, "Shares").
Corporation shall thereupon include in such filing the Shares and, subject to
its right to withdraw such filing, shall use its best efforts to effect
registration under the Securities Act of the Shares.
<PAGE>
1.2 The right of the Selling Shareholders to have the Shares
included in any Registration Statement in accordance with the provisions of this
Section 1 shall be subject to the following conditions:
1.2.1 Corporation shall have the right to require
that Selling Shareholders participating in such Registration Statement
agree to refrain from offering or selling any shares of Common Stock
that they own which are not included in any such Registration Statement
in accordance with this Section 1 for any reasonable time period
specified, not to exceed 180 days, by any managing underwriter of the
offering to which such Registration Statement relates;
1.2.2 If any managing underwriter of the offering to
which the Registration Statement relates informs Corporation that the
total number of Shares requested by the Selling Shareholders to be
included in the Registration Statement is sufficiently large to affect
the success of such offering adversely, then Corporation will include
only the number of shares, if any, in the Registration Statement that
such managing underwriters shall advise Corporation will not so affect
the offering, and reductions in the number of Shares will be made
proportionate to the respective percentages of ownership of the Selling
Shareholders, provided, however, if the request being made is pursuant
to a Shareholder request under Section 2, the Shares sold by such
Shareholder making the request under Section 2 shall not be reduced;
1.2.3 Corporation shall furnish each Selling
Shareholder with such number of copies of the prospectus used or
produced by Corporation in connection with the Registration Statement
(including any preliminary prospectus or supplemental or amended
prospectus) (the "Prospectus") as such Selling Shareholder may
reasonably request in order to facilitate the sale and distribution of
its shares; and
<PAGE>
1.3 Notwithstanding the foregoing, Corporation in its sole
discretion may determine not to file the Registration Statement or proceed with
the offering as to which the notice specified herein is given without any
liability to Selling Shareholders.
1.4 The rights of Shareholders under Section 1 may upon notice
to the Corporation be transferred to their respective affiliates in combination
with a transfer of shares to such affiliates (including, but not limited to,
distributions to limited partners of Odyssey or the First Reserve Group).
Section 2 Independent Registration Rights.
2.1 The Corporation hereby grants to each of (i) the First
Reserve Group, (ii) Comdisco, Inc., (iii) Odyssey and (iv) Floyd C. Wilson, if
he is no longer Chief Executive Officer of the Company, (each, a "Selling
Shareholder") a separate right to require the Corporation to use its best
efforts to cause the registration and sale in an underwritten public offering of
all or a portion (but not less than 200,000 shares) of such Selling
Shareholder's shares in accordance with this Section 2. In the event that a
Selling Shareholder wishes to exercise such right, it shall give the Corporation
written notice of its desire to sell such shares, specifying the number of
shares proposed to be sold (for the purposes of this Section 2, "Shares") and
the plan for distribution of the Shares. Corporation will thereafter:
2.1.1 Prepare and file as soon as practicable a
Registration Statement with the SEC on Form S-1 (or Form S-2 or Form
S-3, if Corporation is entitled to use such forms) and use its best
efforts to cause such Registration Statement to become effective in
order that the Shareholders may sell the Shares in accordance with the
proposed plan of distribution;
2.1.2 Prepare and file with the SEC such amendments
and supplements to such Registration Statement and 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 offer of the Shares during the period required
for distribution of the Shares, which period shall not be in excess of
60 days from the effective date of such Registration Statement; and
<PAGE>
2.1.3 Furnish to each of the Shareholders such number
of copies of the Prospectus (including any preliminary prospectus or
supplemental or amended prospectus) as the Shareholders may reasonably
request in order to facilitate the sale and distribution of the Shares.
2.2 The right of the Shareholders to register Shares pursuant
to the provisions of this Section 2 shall be subject to the following
conditions:
2.2.1 If a request for registration is made within 60
days prior to the conclusion of Corporation's then current fiscal year,
Corporation shall have the right to delay the filing of the
Registration Statement for such period of time until Corporation
receives its audited financial statements for such fiscal year;
2.2.2 Each of (i) Odyssey, (ii) the First Reserve
Group , and (iii) Comdisco, Inc. shall each separately be entitled to
request only one registration pursuant to this Section 2 and
2.2.3 Except without the consent of its board of
directors, Corporation shall not be required to file a Registration
Statement on behalf of Shareholders under this Section 2 within six
months after the effective date of a Registration Statement in which
the Shareholders are offered an opportunity to include shares pursuant
to Section 1 hereof.
Section 3 Exclusive Registration Rights and Transfer.
The registration rights granted to Shareholders pursuant to
this Agreement are the only such rights held by any shareholders of Corporation
on the date hereof. Each Shareholder hereby disclaims any other such rights they
may have had under Prior Agreements. The Corporation may not grant, without the
consent of the Shareholders, any such rights which are superior to the rights
granted herein. Except as provided in this Section 3 and Section 1.4, the rights
granted under this Agreement are granted specifically to and for the benefit of
the Shareholders and shall not pass to any transferee of Common Stock.
Section 4 Expenses. Corporation will bear all the expenses in
connection with any Registration Statement under Section 1 or Section 2 hereof,
other than transfer taxes payable on the sale of such shares, the fees and
expenses of counsel to any Shareholders and fees and commissions of brokers,
dealers and underwriters.
<PAGE>
Section 5 Recall of Prospectuses, etc. With respect to a
Registration Statement or amendment thereto filed pursuant to this Agreement,
if, at any time, Corporation notifies the Selling Shareholders that an amendment
or supplement to such Registration Statement or amendment or the Prospectus
included therein is necessary or appropriate, the Selling Shareholders will
forthwith cease selling and distributing shares thereunder and will forthwith
redeliver to Corporation all copies of such Registration Statement and
Prospectuses then in their possession or under their control, Corporation will
use its best efforts to cause any such amendment or supplement to become
effective as soon as practicable and will furnish the Selling Shareholders with
a reasonable number of copies of such amended or supplemented prospectus (and
the period during which Corporation is required to use its best efforts to
maintain such Registration Statement in effect pursuant to this Agreement will
be increased by the period from the date on which the selling Shareholders
ceased selling and distributing shares thereunder to the date on which such
amendment or supplement becomes effective).
Section 6 Cooperation of Existing Shareholder. Corporation
shall be entitled to require that each selling Shareholder cooperate with
Corporation in connection with a registration of shares of Common Stock pursuant
to this Agreement and furnish (i) such information as may be required by
Corporation or by the SEC in connection therewith and (ii) such representations,
undertakings and agreements as may be required by the SEC in connection
therewith.
Section 7 Cooperation by Corporation. The Corporation shall
take all actions necessary, appropriate or customary to effect the registration
and sale of any shares of Common Stock to be registered and sold pursuant to
Section 2 hereof, including, without limitation, (i) entering into arrangements
with underwriters selected by the selling stockholder in connection with such
sale, (ii) execution of a customary Underwriting Agreement with such
underwriters, (iii) registration of such shares under all "blue sky" laws that
the Corporation or such underwriters deem necessary or appropriate in connection
with such sale (provided that the Corporation shall not be required to execute a
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction where it is not so qualified in order to comply
with such blue sky laws), and (iv) delivery of such legal opinions and "cold
comfort" letters as the underwriters may request.
<PAGE>
Section 8 Indemnification.
8.1 In the event of any registration of any securities under
the Securities Act pursuant to this Agreement, Corporation will indemnify and
hold harmless each Selling Shareholder, any underwriter and each other person,
if any, who controls such Selling Shareholder or underwriter within the meaning
of the Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which each such Selling Shareholder or underwriter or Selling
Shareholder may become subject, under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in such Registration Statement or preliminary
prospectus (if used prior to the effective date of such Registration Statement)
or final or summary prospectus contained therein (if used during the period the
Corporation is required to keep the Registration Statement effective), or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements made therein not misleading, and
will reimburse each such Selling Shareholder, underwriter and Selling person for
any legal or any other expenses as reasonably incurred by such person in
connection with investigating or defending any such action or claim, excluding
any amounts paid in settlement of any litigation, commenced or threatened, if
such settlement is effected without the prior written consent of Corporation;
provided, however, that Corporation will not be liable to a particular Selling
Shareholder or underwriter in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon an untrue
statement or omission or alleged omission made in said Registration Statement,
said preliminary prospectus or said final or summary prospectus or any amendment
or supplement thereto, in reliance upon and in conformity with written
information furnished to Corporation by that Selling Shareholder or its
affiliates or representative, or by that underwriter, as the case may be,
specifically for use in the preparation thereof; and provided further that the
indemnity agreement contained in this Section 8 with respect to any preliminary
prospectus shall not inure to the benefit of any Selling Shareholder or
underwriter or to any person selling the same in respect of any loss, claim,
damage, liability or action asserted by someone who purchased shares from such
person if a copy of the final prospectus (as the same may be amended or
supplemented) in connection with such registration statement was not sent or
given to such person with or prior to written confirmation of the sale and if
the untrue statement or omission or alleged untrue statement or omission of a
material fact contained in such preliminary prospectus was corrected in the
final prospectus.
8.2 In the event of any registration of securities under the
Securities Act pursuant to this Agreement, each Selling Shareholder shall
indemnify and hold harmless Corporation, each of its directors and officers, any
<PAGE>
underwriter and each other person, if any, who controls Corporation or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which Corporation or any
such director, officer, underwriter or Selling Shareholder may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of, or are based upon,
any untrue statement or alleged untrue statement of any material fact contained
in such Registration Statement or preliminary prospectus or final or summary
prospectus contained therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein not misleading, and will reimburse Corporation, each such director,
officer, underwriter and Selling Shareholder for any legal or other expenses
reasonably incurred as incurred by them in connection with investigating or
defending any such action or claim, excluding any amounts paid in settlement of
any litigation, commenced or threatened, if such settlement is effected without
the prior written consent of the Selling Shareholder or its representative; but
in all such cases only if, and to the extent that, any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission therein made in
reliance upon and in conformity with written information furnished to
Corporation by the selling Shareholder or its Selling affiliates or
representative specifically for use in the preparation thereof. Notwithstanding
the foregoing, the amount of the indemnity provided by the Selling Shareholder
pursuant to this Section 8.2 shall not exceed the net proceeds received by such
Selling Shareholder in such related registration and sale.
8.3 Action commenced. Promptly after receipt by a party
entitled to indemnification under Section 8.1 or 8.2 hereof of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under either of such
Sections, notify the indemnifying party in writing of the commencement thereof.
In case any such action is brought against the indemnified party and it shall so
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it so
chooses, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party (except that if the Selling Shareholders are the
indemnifying party, such defense may be assumed only in a manner chosen by the
holders of a majority in interest of the shares of Common Stock owned by such
Selling Shareholder and included in the Registration Statement which is the
subject of such action), and, after notice from the indemnifying party that it
so chooses, such indemnifying party shall not be liable for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof; provided, however, that if the indemnifying party fails to take
reasonable steps necessary to diligently defend such claim within 20 days after
receiving notice from the indemnified party that the indemnified party believes
the indemnifying party has failed to take such steps, the indemnified party may
assume its own defense and the indemnifying party shall be liable for any
expenses therefor. The indemnity agreements in this Section shall be in addition
to any liabilities which the indemnifying parties may have pursuant to law.
<PAGE>
Section 9 Notices. Any notice to be given by any party
hereunder to any other shall be in writing, mailed by certified or registered
mail, return receipt requested, shall be addressed to all other parties at the
addresses listed in the Merger Agreement. All such notices shall be deemed to be
given three days after the date of mailing thereof.
Section 10 Modification. Notwithstanding anything to the
contrary in this Agreement or otherwise, no modification, amendment or waiver of
any of the provisions of this Agreement shall be effective unless in writing and
signed by all parties hereto.
Section 11 Non-Waiver. The failure to enforce at any time any
of the provisions of this Agreement, or to require at any time performance by
any other party of any of the provisions hereof, shall in no way be construed to
be a waiver of such provisions.
Section 12 Partial Invalidity. If any clause, sentence,
paragraph, section or part of this Agreement shall be deemed invalid,
unenforceable or against public policy, the part which is invalid, unenforceable
or contrary to public policy shall not affect, impair, invalidate or nullify the
remainder of this Agreement, but the invalidity, unenforceability or
contrariness to public policy shall be confined only to the clause, sentence,
paragraph, section or part of this Agreement so invalidated, unenforceable or
against public policy.
Section 13 Arbitration. Any controversy, dispute, or claim
arising out of, in connection with, or in relation to, the interpretation,
performance or breach of this Agreement, including, without limitation, the
validity, scope and enforceability of this Section 13, may at the election of
any party, be solely and finally settled by arbitration conducted in Kansas, by
and in accordance with the then existing rules for commercial arbitration of the
American Arbitration Association, or any successor organization. Judgment upon
any award rendered by the arbitrator(s) may be entered by the state or federal
court having jurisdiction thereof. Any of the parties may demand arbitration by
<PAGE>
written notice to the other and to the American Arbitration Association ("Demand
for Arbitration"). Any Demand for Arbitration pursuant to this Section 13 shall
be made before the earlier of (i) the expiration of the applicable statute of
limitations with respect to such claim, or (ii) 60 days from the date on which a
lawsuit is brought by any other party with respect to such claim. The parties
intend that this agreement to arbitrate be valid, enforceable and irrevocable.
Time is of the essence in the resolution of any such dispute, and the parties
agree to instruct the arbitrator to institute accelerated procedures to resolve
any dispute. The losing party shall reimburse the prevailing party in such
arbitration for the prevailing party's legal fees and expenses reasonably
incurred in connection with such arbitration.
Section 14 Construction. The language in all parts of this
Agreement shall in all cases be construed simply, according to its fair meaning,
and shall not be construed strictly for or against either of the parties hereto.
Section 15 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF KANSAS, WITHOUT REGARD TO
ITS CONFLICTS OF LAW PRINCIPLES.
Section 16 Execution in Counterpart. This Agreement may be
executed in one or more identical counterparts, which when taken together, will
constitute one, fully executed, original document.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
CORPORATION SHAREHOLDERS
HUGOTON ENERGY CORPORATION, FIRST RESERVE FUND V, LIMITED
a Kansas corporation PARTNERSHIP, a Delaware
limited partnership
/s/
By: First Reserve Corporation,
as managing general partner
Name: _____________________
Title: _____________________
/s/
Name: __________________________
Title: __________________________
<PAGE>
FIRST RESERVE SECURED ENERGY
ASSETS FUND, LIMITED
PARTNERSHIP, a Delaware limited partnership
By: First Reserve Corporation,
as managing general partner
/s/
Name: __________________________
Title: __________________________
AMERICAN GAS & OIL INVESTORS, LIMITED PARTNERSHIP, a
New York limited partnership
By: First Reserve Corporation, as
managing general partner
/s/
Name: __________________________
Title: __________________________
AmGO II, LIMITED PARTNERSHIP, a New York limited
partnership
By: First Reserve Corporation, as managing
general partner
/s/
Name: __________________________
Title: __________________________
<PAGE>
AmGO III, LIMITED PARTNERSHIP, a New York limited
partnership
By: First Reserve Corporation, as managing
general partner
/s/
Name: __________________________
Title: __________________________
COMDISCO, INC., a Delaware corporation
By: /s/
Name: _______________________________
Title: _______________________________
ODYSSEY PARTNERS, L.P.
By: /s/
Name: _______________________________
Title: _______________________________
<PAGE>
CRAMER, ROSENTHAL, McGLYNN, INC.
By: /s/
Name: _______________________________
Title: _______________________________
/s/
Floyd C. Wilson
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement of
Schedule 13D is true, complete and correct.
Dated: September 7, 1995
First Reserve Secured Energy Assets Fund,
Limited Partnership, a Delaware limited partnership
By: First Reserve Corporation, a Delaware
corporation, as managing general partner
Name: /S/ William E. Macaulay
Title: President
Page 16 of 19
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement of
Schedule 13D is true, complete and correct.
Dated: September 7, 1995
First Reserve Fund V, Limited Partnership,
a Delaware limited partnership
By: First Reserve Corporation, as managing
general partner
Name: /S/ William E. Macaulay
Title: President
Page 17 of 19
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement of
Schedule 13D is true, complete and correct.
Dated: September 7, 1995
First Reserve Corporation
Name: /S/ William E. Macaulay
Title: President
Page 18 of 19
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement of
Schedule 13D is true, complete and correct.
Dated: September 7, 1995
Comdisco, Inc., a Delaware corporation
Name: /S/ Alan J. Andreini
Title: Executive Vice President
Page 19 of 19
