<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)*
HUGOTON ENERGY CORPORATION
- --------------------------------------------------------------------------------
(NAME OF ISSUER)
COMMON STOCK WITHOUT PAR VALUE
- --------------------------------------------------------------------------------
(TITLE OF CLASS OF SECURITIES)
444-613
------------------------------------------------------------------------
(CUSIP NUMBER)
MS. ELIZABETH FOLEY
FIRST RESERVE CORPORATION
475 STEAMBOAT ROAD, GREENWICH, CT 06830 (203) 625-2506
- --------------------------------------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS)
APRIL 17, 1997
------------------------------------------------------------------------
(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 SUBJECT OF THIS SCHEDULE 13D, AND IS FILING THIS
SCHEDULE BECAUSE OF RULE 13D-1(B)(3) OR (4), CHECK THE FOLLOWING BOX [ ].
CHECK THE FOLLOWING BOX IF A FEE IS BEING PAID WITH THIS STATEMENT [ ] (A FEE IS
NOT REQUIRED ONLY IF THE REPORTING PERSON: (1) HAS A PREVIOUS STATEMENT ON FILE
REPORTING BENEFICIAL OWNERSHIP OF MORE THAN FIVE PERCENT OF THE CLASS OF
SECURITIES DESCRIBED IN ITEM 1; AND (2) HAS FILED NO AMENDMENT SUBSEQUENT
THERETO REPORTING BENEFICIAL OWNERSHIP OF FIVE PERCENT OR LESS OF SUCH CLASS.)
(SEE RULE 13D-7.)
NOTE: SIX COPIES OF THIS STATEMENT, INCLUDING ALL EXHIBITS, SHOULD BE FILED
WITH THE COMMISSION. SEE RULE 13D-1(A) FOR OTHER PARTIES TO WHOM COPIES ARE TO
BE SENT.
* THE REMAINDER OF THIS COVER PAGE SHALL BE FILLED OUT FOR A REPORTING PERSON'S
INITIAL FILING ON THIS FORM WITH RESPECT TO THE SUBJECT CLASS OF SECURITIES, AND
FOR ANY SUBSEQUENT AMENDMENT CONTAINING INFORMATION WHICH WOULD ALTER
DISCLOSURES PROVIDED IN A PRIOR COVER PAGE.
THIS INFORMATION REQUIRED ON THE REMAINDER OF THIS COVER PAGE SHALL NOT BE
DEEMED TO BE "FILED" FOR THE PURPOSE OF SECTION 18 OF THE SECURITIES EXCHANGE
ACT OF 1934 ("ACT") OR OTHERWISE SUBJECT TO THE LIABILITIES OF THAT SECTION OF
THE ACT BUT SHALL BE SUBJECT TO ALL OTHER PROVISIONS OF THE ACT (HOWEVER, SEE
THE NOTES).
Page 1 of 34 pages
<PAGE> 2
SCHEDULE 13D
<TABLE>
<S> <C>
CUSIP NO. 444-613 PAGE 2 OF 34 PAGES
- -----------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve Corporation
I.R.S. No.: 06-1210123
- -------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- -------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT 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 4,268,441
REPORTING -------------------------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
4,268,441
- -------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,268,441
- -------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.6
- -------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE> 3
SCHEDULE 13D
<TABLE>
<S> <C>
CUSIP NO. 444-613 PAGE 3 OF 34 PAGES
- -----------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve Secured Energy Assets Fund, Limited Partnership
I.R.S. Identification No. 06-1232433
- -------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- -------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT 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 1,727,896
REPORTING -------------------------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,727,896
- -------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,727,896
- -------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.7
- -------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE> 4
SCHEDULE 13D
<TABLE>
<S> <C>
CUSIP NO. 444-613 PAGE 4 OF 34 PAGES
- ------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Reserve Fund V, Limited Partnership
I.R.S. Identification No.: 06-1295657
- -------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- -------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT 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 DISPOSITIVE 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)
10.8
- -------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE> 5
ITEM 1. SECURITY AND ISSUER
This Amendment No. 3 to Schedule 13D (this "Amendment No. 3") relates to
shares of the common stock, no par value (the "Common Stock"), of Hugoton Energy
Corporation, a Kansas corporation (the "Company"). This amendment No. 3 amends
the Statement on Schedule 13D dated September 7, 1995 (the "1995 Filing") filed
by First Reserve Corporation ("First Reserve"), First Reserve Secured Energy
Assets Fund, Limited Partnership ("FRSEA") and First Reserve Fund V, Limited
Partnership ("Fund V"), as amended by Amendment No. 1, dated January 28, 1997
and Amendment No. 2, dated February 26, 1997. Except as otherwise specified
herein, capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the 1995 Filing.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 is hereby amended by adding the following paragraph:
Jonathan S. Linker is a Managing Director of First Reserve. Mr.
Linker's business address is First Reserve Corporation, 6000 Texas Commerce
Tower, Houston, Texas 77002. Mr. Linker's principal occupation is as
Managing Director of First Reserve. In the last five years, Mr. Linker (i)
has not been convicted in a criminal proceeding (excluding traffic
violations, or similar misdemeanors) and (ii) has not been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in (x) Mr. Linker 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 (y) a
finding of any violation with respect to such laws.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 is hereby amended by adding the following paragraph:
As described in Item 6 below, on April 14, 1997, the Company, Odyssey
Partners, L.P. ("Odyssey Partners"), FRSEA, American Gas & Oil Investors,
Limited Partnership ("AmGO") and AmGO II, Limited Partnership ("AmGO II")
entered into a purchase agreement (the "Purchase Agreement") with Salomon
Brothers Inc and Jefferies & Company, Inc. (the "Purchasers") providing
for, among other things, the sale to the Purchasers by FRSEA, AmGO and AmGO
II of 106,060 shares of Common Stock, 196,970 shares of Common Stock and
196,970 shares of Common Stock, respectively, at a purchase price of $9.125
per share. The sale of such shares of Common Stock pursuant to the Purchase
Agreement was effected on April 17, 1997. First Reserve is the managing
general partner of each of FRSEA, AmGO and AmGO II. A copy of the Purchase
Agreement is attached hereto as Exhibit I.
None of FRSEA, Fund V or First Reserve (the "Reporting Parties") has
any current intention of selling any shares of Common Stock pursuant to the
Registration Statement referenced in Amendment No. 2 to this Statement on
Schedule 13D.
Page 5 of 34 pages
<PAGE> 6
ITEM 5. INTEREST IN SECURITIES OF ISSUER
Item 5(a) is hereby amended by adding the following paragraphs:
As of the date of this Amendment No. 3, the Reporting Parties are the
beneficial owners of the Company Common Stock in the numbers and
percentages set forth in the table below. In addition, Jonathan S. Linker,
a Managing Director of First Reserve, beneficially owns 23,500 shares of
Common Stock in his individual capacity.
<TABLE>
<CAPTION>
NUMBERS OF SHARES % OF CLASS OF
REPORTING PARTY BENEFICIALLY OWNED SECURITY OWNED
--------------------------------------------- ------------------ --------------
<S> <C> <C>
FRSEA........................................ 1,727,896 8.7%
Fund V....................................... 2,138,802 10.8%
First Reserve (1)............................ 4,268,441 21.6%
</TABLE>
- ---------------
(1) Includes shares beneficially owned by FRSEA and Fund V.
The shares listed as beneficially owned by First Reserve are owned of
record and beneficially by FRSEA, Fund V, AmGO and AmGO II. First Reserve is the
managing general partner of each of FRSEA, Fund V, AmGO and AmGO II. Through
their ownership of shares of First Reserve, William E. Macaulay and John A. Hill
may be deemed to share beneficial ownership of the shares of Common Stock shown
as owned by First Reserve. Messrs. Macaulay and Hill disclaim beneficial
ownership of such shares.
Item 5(b) is hereby amended by adding the following paragraphs:
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. The Reporting Parties
have the following powers with respect to the Company Common Stock they
beneficially own:
<TABLE>
<CAPTION>
SOLE SHARED SOLE SHARED
VOTING VOTING DISPOSITIVE DISPOSITIVE
REPORTING PARTY POWER POWER POWER POWER
--------------------------------- ----- --------- ----------- -----------
<S> <C> <C> <C> <C>
FRSEA............................ 0 1,727,896 0 1,727,896
Fund V........................... 0 2,138,802 0 2,138,802
First Reserve Corporation........ 0 4,268,441(1) 0 4,268,441
</TABLE>
- ---------------
(1) Includes ownership of FRSEA and Fund V.
Mr. Linker has sole power to vote or to direct the vote and sole power to
dispose or direct the disposition of the 23,500 shares beneficially owned by Mr.
Linker.
Page 6 of 34 pages
<PAGE> 7
Item 5(c) is hereby amended by adding the following paragraphs:
As described in Item 6 below, on April 17, 1996, FRSEA sold 106,060
shares of Common Stock and two other limited partnerships for which First
Reserve is the managing general partner sold an aggregate of 393,940 shares
of Common Stock. Such sales of Common Stock were effected pursuant to the
Purchase Agreement at a price of $9.125 per share of Common Stock.
Except as disclosed above, within the knowledge of the Reporting
Parties, no transactions in shares of Common Stock were effected during the
past 60 days by such persons or the executive officers, directors and
controlling persons (if any) of such persons.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS
Item 6 is hereby amended by adding the following paragraphs:
On April 14, 1997, the Company, Odyssey Partners, L.P., FRSEA, and
AmGO and AmGO II entered into the Purchase Agreement with the Purchasers
providing for, among other things, the sale to the Purchasers by FRSEA,
AmGO and AmGO II of 106,060 shares of Common Stock, 196,970 shares of
Common Stock and 196,970 shares of Common Stock, respectively, at a
purchase price of $9.125 per share. The sale of such shares of Common
Stock pursuant to the Purchase Agreement was effected on April 17, 1997.
A copy of the Purchase Agreement is attached hereto as Exhibit I.
ITEM 7. EXHIBITS
Exhibit A -- Agreement Concerning Filing of Schedule 13D
Exhibit I -- Purchase Agreement
Page 7 of 34 pages
<PAGE> 8
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 3 to the statement
of Schedule 13D is true, complete and correct.
Dated April 18, 1997
First Reserve Secured Energy Assets
Fund, Limited Partnership, a Delaware
limited partnership
By: First Reserve Corporation, a
Delaware corporation, as
managing general partner
/s/ David H. Kennedy
--------------------------------------
Name: David H. Kennedy
Title: Managing Director and Director
Page 8 of 34 pages
<PAGE> 9
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 3 to the statement
of Schedule 13D is true, complete and correct.
Dated April 18, 1997
First Reserve Fund V, Limited
Parternership, a Delaware limited
partnership
By: First Reserve Corporation, as
managing general partner
/s/ David H. Kennedy
--------------------------------------
Name: David H. Kennedy
Title: Managing Director and Director
Page 9 of 34 pages
<PAGE> 10
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 3 to the statement
of Schedule 13D is true, complete and correct.
Dated April 18, 1997
First Reserve Corporation
/s/ David H. Kennedy
--------------------------------------
Name: David H. Kennedy
Title: Managing Director and Director
Page 10 of 34 pages
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Name Page
- ------------- ---- ----
<S> <C>
A -- Agreement Concerning Filing of
Schedule 13D 12
I -- Purchase Agreement 13
</TABLE>
Page 11 of 34 pages
<PAGE> 1
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"), and First Reserve Corporation, a
Delaware Corporation ("First Reserve"), 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 the 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 and First Reserve 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 concerned 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 such constitute on and the same instrument.
Dated as of April 18, 1997.
First Reserve Secured Energy Assets
Fund Limited Partnership, a Delaware
limited Partnership
By: First Reserve Corporation, a
Delaware corporation, a
managing general partner
/s/ David H. Kennedy
Name: David H. Kennedy
Title: Managing Director and Director
First Reserve Fund V, Limited
Partnership, a Delaware limited
partnership
By: First Reserve Corporation, as
managing general partner
/s/ David H. Kennedy
Name: David H. Kennedy
Title: Managing Director and Director
First Reserve Corporation, a Delaware
corporation
/s/ David H. Kennedy
Name: David H. Kennedy
Title: Managing Director and Director
Page 12 of 34 pages
<PAGE> 1
EXHIBIT I
Hugoton Energy Corporation
Common Stock
(no par value)
Purchase Agreement
April 14, 1997
Salomon Brothers Inc and
Jefferies & Company, Inc.
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
The persons named in Schedule II hereto (the "Selling
Stockholders") severally propose to sell to you (the "Purchasers") the number of
shares of Common Stock, no par value ("Common Stock"), of Hugoton Energy
Corporation, a Kansas corporation (the "Company") indicated on Schedule I (said
shares to be sold by the Selling Stockholders collectively being hereinafter
called the "Securities").
1. Representations and Warranties.
(a) The Company represents and warrants to, and agrees with,
each Purchaser as set forth below in this Section 1. Certain terms used in this
Section 1 are defined in paragraph (iii) hereof.
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") the registration statements (file numbers
33-97366 and 333-22189) on Form S-3, including a related preliminary
prospectus, for the registration under the Securities Act of 1933 (the
"Act") of the offering and sale of the Securities. The Company may have
filed one or more amendments thereto, including the related preliminary
prospectus, each of which has previously been furnished to you. The
Company has filed or will file with the Commission either after
effectiveness of such registration statement, a final prospectus in
accordance with Rule 424(b)(1) or (4). The Company has included in such
registration statement, as amended at the Effective Date of each
registration statement, all information required by the Act and the
rules thereunder to be included in the Prospectus with respect to the
Securities and the offering thereof. As filed, such amendment and form
of final
Page 13 of 34 pages
<PAGE> 2
prospectus, or such final prospectus, shall contain all required
information, with respect to the Securities and the offering thereof
and, except to the extent the Purchasers shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(ii) On the Effective Date, each Registration Statement did or
will, and when the Prospectus is or was first filed (if required) in
accordance with Rule 424(b) with respect to each registration statement
and on the Closing Date, the Prospectus (and any supplements thereto)
with respect to each registration statement will, comply in all
material respects with the applicable requirements of the Act and the
rules thereunder; on the Effective Date, each Registration Statement
did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and,
on the Effective Date, each Prospectus, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date, each Prospectus ( together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from either Registration Statement, or the
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Selling Stockholder specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto).
(iii) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "the Effective Date" with
respect to each Registration Statement shall mean each date that the
Registration Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall mean the
date and time that this Agreement is executed and delivered by the
parties hereto. "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in paragraph (i) above. "Prospectus" with
respect to each Registration Statement shall mean the prospectus
(including all documents incorporated by reference therein) relating to
the Securities that is first filed pursuant to Rule 424(b) or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities included in the
Registration Statement at the Effective Date. "Registration Statement"
shall mean with respect to each Registration Statement the registration
statement referred to in paragraph (i) above (including all documents
incorporated by reference therein), exhibits and financial statements,
as amended at the Execution Time (or, if not effective at the Execution
Time, in the form in which it shall become effective) and, in the event
any post-effective amendment thereto becomes effective prior to the
Closing Date (as hereinafter defined), shall also mean such
registration statement as so amended and Registration Statements shall
refer to both such Registration Statements. "Rule 424" refers to such
rule under the Act.
Page 14 of 34 pages
<PAGE> 3
(iv) The financial statements, including the notes thereto,
and supporting schedules included in the Registration Statement or
incorporated by reference therein present fairly the financial position
of the Company and its consolidated subsidiaries as at the dates
indicated and the results of their operations for the periods
specified; except as otherwise stated in the Registration Statement,
such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis;
and the supporting schedules included in the Registration Statement or
incorporated by reference therein present fairly the information
required to be stated therein.
(v) The information on the basis of which the reserve
estimates and related information included in the Registration
Statements or incorporated by reference therein were prepared by the
Company, its subsidiaries, Ryder Scott Company Petroleum Engineers or
any other person is true and correct in all material respects.
(vi) Since the respective dates as of which information is
given in each Registration Statement and the related Prospectus, except
as otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or the earnings,
business or properties of the Company and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of
business, (B) there have been no transactions entered into by the
Company or any of its subsidiaries other than those in the ordinary
course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Kansas with corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Prospectus.
(viii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the financial statements incorporated by
reference in the Registration Statements (except for issuances, if any,
subsequent to the date of the Prospectus pursuant to employee benefit
plans); the shares of issued and outstanding Common Stock have been
duly authorized and validly issued and are fully paid and
nonassessable; the Securities to be purchased by the Purchasers from
the Company have been duly authorized for issuance and sale to pursuant
to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment therefor, will be validly
issued and fully paid and non-assessable; the issuance of the
Securities is not subject to preemptive or other similar rights; and
the Common Stock conforms to all statements relating thereto contained
in the Prospectus.
(ix) This Agreement has been duly and validly authorized by
the Company.
Page 15 of 34 pages
<PAGE> 4
(x) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated have been
duly and validly authorized by all necessary corporate action and will
not conflict with or constitute a breach or violation of, or default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any
of its subsidiaries is subject, nor will such action result in any
breach or violation of, or default under, the provisions of the charter
or by-laws of the Company or of any applicable law, administrative
regulation or administrative or court decree.
(b) Each Selling Stockholder represents and warrants to, and
agrees with, each Purchaser that:
(i) Such Selling Stockholder is the lawful owner of the
Securities to be sold by such Selling Stockholder hereunder and upon
sale and delivery of, and payment for, such Securities, as provided
herein, such Selling Stockholder will convey good and marketable title
to such Securities, free and clear of all liens, encumbrances, equities
and claims whatsoever.
(ii) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities and has not effected any sales of shares of Common
Stock which, if effected by the issuer, would be required to be
disclosed in response to Item 701 of Regulation S-K.
(iii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Purchasers and
such other approvals as have been obtained.
(iv) Neither the sale of the Securities being sold by such
Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law or the charter or by-laws of such Selling
Stockholder or the terms of any indenture or other agreement or
instrument to which such Selling Stockholder or any of its subsidiaries
is a party or bound, or any judgement, order or decree applicable to
such Selling Stockholder or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over such Selling Stockholder or any of its
subsidiaries.
Page 16 of 34 pages
<PAGE> 5
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Selling Stockholders agree, severally and not jointly, to sell to each
Purchaser, and each Purchaser agrees, severally and not jointly, to purchase
from the Selling Stockholders, at a purchase price of $9.125 per share, the
amount of the Securities set forth opposite such Purchaser's name in Schedule I
hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 AM, New York City time, on April 17, 1997, or
such later date (not later than April 24, 1997) as the Purchasers shall
designate, which date and time may be postponed by agreement among the
Purchasers, the Company and the Selling Stockholders or as provided in Section 9
hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Purchasers against payment by the several Purchasers of the respective
aggregate purchase prices of the Securities being sold by the Company and each
of the Selling Stockholders to or upon the order of the Company and the Selling
Stockholders by wire transfer of same day funds to accounts designated by each
of them. Delivery of the Securities shall be made at such location as the
Purchasers shall reasonably designate at least one business day in advance of
the applicable Closing Date and payment for such Securities shall be made at the
office of Vinson & Elkins L.L.P., 2300 First City Tower, 1001 Fannin, Houston,
Texas. Certificates for the Securities shall be registered in such names and in
such denominations as the Purchasers may request not less than three full
business days in advance of the Closing Date.
The Company and the Selling Stockholders agree to have the
Securities available for inspection, checking and packaging by the Purchasers in
New York, New York, not later than 1:00 PM on the business day prior to the
Closing Date.
Each Selling Stockholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the several Purchasers of
the Securities to be purchased by them from such Selling Stockholder and the
respective Purchasers will pay any additional stock transfer taxes involved in
further transfers.
4. Offering by Purchasers. It is understood that the several
Purchasers propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
(a) The Company agrees with the several Purchasers that:
(i) Prior to the termination of the offering of the
Securities, the Company will not file any amendment of the Registration
Statements or supplement to the Prospectus without your prior consent.
Subject to the foregoing sentence, if either Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), the Company will
cause the Prospectus, properly completed, and any supplement thereto to
be filed with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide
Page 17 of 34 pages
<PAGE> 6
evidence satisfactory to the Purchasers of such timely filing. The
Company will promptly advise the Purchasers (A) when the Prospectus,
and any supplement thereto, shall have been filed (if required) with
the Commission pursuant to Rule 424(b), (B) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (C) of any request
by the Commission for any amendment of either Registration Statement or
supplement to the Prospectus or for any additional information, (D) of
the issuance by the Commission of any stop order suspending the
effectiveness of either Registration Statement or the institution or
threatening of any proceeding for that purpose and (E) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order and, if issued, to obtain as soon as possible the withdrawal
thereof.
(ii) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend either Registration Statement or supplement
either Prospectus to comply with the Act or the rules thereunder, the
Company promptly will (i) prepare and file with the Commission, subject
to the second sentence of paragraph (a) of this Section 5, an amendment
or supplement which will correct such statement or omission or effect
such compliance and (ii) supply any supplemented Prospectus to you in
such quantities as you may reasonably request.
(iii) As soon as practicable, the Company will make generally
available to its security holders and to the Purchasers an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(iv) The Company will furnish to the Purchasers and counsel
for the Purchasers, without charge, copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by an Purchaser or dealer may be required by the Act, as
many copies of each Prospectus and any supplement thereto as the
Purchasers may reasonably request. The Company will pay the expenses of
printing or other production of all documents relating to the offering.
(v) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Purchasers may designate, and will maintain such qualifications in
effect so long as required for the distribution of the Securities and
will pay the fee of the National Association of Securities Dealers,
Inc., in connection with its review of the offering.
Page 18 of 34 pages
<PAGE> 7
(vi) The Company will not, for a period of 90 days following
the Execution Time, without the prior written consent of Salomon
Brothers Inc, offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any other shares
of Common Stock or any securities convertible into, or exchangeable
for, shares of Common Stock; provided, however, that the Company may
issue and sell Common Stock pursuant to any employee stock option plan,
stock ownership plan or dividend reinvestment plan of the Company in
effect at the Execution Time; and, provided, further, that the Company
may issue Common Stock in connection with an acquisition provided that
the recipient of such Common Stock agrees to the foregoing restriction.
(b) Each Selling Stockholder agrees with the several
Purchasers that it will not and will cause its affiliates to not during the
period of 45 days following the Execution Time, without the prior written
consent of Salomon Brothers Inc, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any other
shares of Common Stock beneficially owned by such person, or any securities
convertible into, or exchangeable for, shares of Common Stock.
6. Conditions to the Obligations of the Purchasers. The
obligations of the Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Selling Stockholders contained herein as of the Execution Time, the Closing
Date and any settlement date pursuant to Section 3 hereof, to the accuracy of
the statements of the Company and the Selling Stockholders made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and the Selling Stockholders of their respective obligations hereunder
and to the following additional conditions:
(a) If filing of either Prospectus, or any supplement thereto,
is required pursuant to Rule 424(b), the Prospectus, and any such
supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness
of either Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Purchasers the
opinion of Vinson & Elkins L.L.P., counsel for the Company, dated the Closing
Date, to the effect that:
(i) each of the Company and Hugoton Exploration Company, HEC
Trading Company, AmGas Corporation, and Tiffany Gathering, Inc.
(individually a "Subsidiary" and collectively the "Subsidiaries") has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority to own
its properties and conduct its business as described in the Prospectus;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
either Prospectus, all outstanding shares of capital stock of the
Subsid-
Page 19 of 34 pages
<PAGE> 8
iaries are owned of record by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the financial statements of the Company included in each
Prospectus; the capital stock of the Company conforms to the
description thereof contained in the Prospectus; the outstanding shares
of Common Stock (including the Securities being sold hereunder by the
Selling Stockholders) have been duly and validly authorized and issued
and are fully paid and nonassessable; the certificates for the
Securities are in valid and sufficient form; and the holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities;
(iv) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries of a character required to be dis-
closed in the Registration Statement which is not adequately disclosed
in the Prospectus, and there is no franchise, contract or other
document of a character required to be described in either Registration
Statement or Prospectus, or to be filed as an exhibit, which is not
described or filed as required;
(v) each Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); to the best knowledge of such
counsel, no stop order suspending the effectiveness of either
Registration Statement has been issued, no proceedings for that purpose
have been instituted or threatened and each Registration Statement and
the Prospectus (other than the financial statements and other financial
and statistical information and oil and gas reserve reports and data
contained therein as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act and the rules thereunder; and such counsel has
no reason to believe that at the Effective Date and as of the Closing
Date either Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that either Prospectus includes any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
of the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction or the National Association of Securities
Dealers, Inc. in
Page 20 of 34 pages
<PAGE> 9
connection with the purchase and distribution of the Securities by the
Purchasers and such other approvals (specified in such opinion) as have
been obtained;
(viii) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or constitute a default under any law or the
charter or by-laws of the Company or the terms of any indenture or
other agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound or any judgment,
order or decree known to such counsel to be applicable to the Company
or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries; and
(ix) no holders of securities of the Company have rights to
the registration of such securities under the Registration Statement
except such holders who have elected not to participate in the offering
contemplated thereby.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Delaware or
Texas or the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Purchasers and (B) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. Reference to the Prospectus in
this paragraph (b) include any supplements thereto at the Closing Date.
(c) The Selling Stockholders shall have furnished to the
Purchasers the opinion of Martin Byman, Esq., counsel for Odyssey Partners,
L.P., and Simpson Thacher & Bartlett, counsel for the other Selling Stockholders
(each with respect to the Selling Stockholder or Selling Stockholders it
represents), dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Selling Stockholder(s) and each Selling Stockholder
has full partnership power and authority to sell, transfer and deliver
in the manner provided in this Agreement the Securities being sold by
such Selling Stockholder hereunder;
(ii) each Purchaser that is a "bona fide purchaser" (within
the meaning of Section 8-302(1) of the New York Uniform Commercial Code
(the "NY-UCC")), will, upon delivery by such Selling Stockholder to
such Purchaser of certificates for the Securities being sold hereunder
by such Selling Stockholder against payment therefor as provided
herein, acquire such Securities free of any "adverse claim" (within the
meaning of Section 8-302(2) of the NY-UCC);
(iii) no consent, approval, authorization or order of any
federal or New York governmental agency or body or, with respect to
First Reserve Secured Energy Asset Fund,
Page 21 of 34 pages
<PAGE> 10
Limited Partnership ("SEA") or First Reserve Fund V, Limited
Partnership ("Fund V"), any Delaware governmental agency or body acting
pursuant to the Delaware Limited Partnership Act or, to such counsel's
knowledge, any Federal or New York court or, with respect to SEA or
Fund V, any Delaware court acting pursuant to the Delaware Limited
Partnership Act is required for the consummation by any such Selling
Stockholder of the transactions provided for herein, except for
registration under the Act and the Securities Exchange Act of 1934, as
amended, and such as may be required under the blue sky laws of New
York in connection with the purchase and distribution of the Securities
by the Purchasers and such other approvals (specified in such opinion)
as have been obtained; and
(iv) neither the sale of the Securities being sold by any such
Selling Stockholder nor the consummation of any other of the
transactions provided for herein by any such Selling Stockholder will
result in a violation of any federal or New York law or the Delaware
Limited Partnership Act or breach or result in a default under the
Agreement of Limited Partnership or Certificate of Limited Partnership
of such Selling Stockholder or the terms of any indenture or other
agreement or instrument known to such counsel and to which any such
Selling Stockholder is a party or bound, nor will such action violate
any judgment, order or decree known to such counsel to be issued
pursuant to any Federal or New York statute or the Delaware Limited
Partnership Act by any court, regulatory body, administrative agency or
governmental body having jurisdiction over any Selling Stockholder.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of the Selling Stockholders and public
officials.
(d) The Purchasers shall have received from Baker & Botts,
L.L.P., counsel for the Purchasers, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, each Registration
Statement, each Prospectus (together with any supplement thereto) and other
related matters as the Purchasers may reasonably require, and the Company and
each Selling Stockholder shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Purchasers a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
Page 22 of 34 pages
<PAGE> 11
(ii) no stop order suspending the effectiveness of either
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in each Prospectus (exclusive of any supplement thereto),
there has been no material adverse change in the condition (financial
or other), earnings, business or properties of the Company and its
subsidiaries, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(f) Each Selling Stockholder shall have furnished to the
Purchasers a certificate, signed by the Chairman of the Board or the President
or the principal financial or accounting officer (or a Managing Director or
comparable official of the general partner) of such Selling Stockholder, dated
the Closing Date, to the effect that the representations and warranties of such
Selling Stockholder in this Agreement are true and correct in all material
respects on and as of the Closing Date to the same effect as if made on the
Closing Date.
(g) At the Execution Time and at the Closing Date, Ernst &
Young shall have furnished to the Purchasers a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Purchasers, confirming that they are independent
accountants within the meaning of the Act and the applicable published rules and
regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in each Registration Statement
and each Prospectus and reported on by them comply in form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and committees of the
Company and the Subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters of
the Company and its subsidiaries as to transactions and events
subsequent to December 31, 1996, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements included in
each Registration Statement and each Prospectus do not comply
in form in all material respects with applicable accounting
requirements of the Act and with the published rules and
regulations of the Commission with respect to registration
statements on Form S-3; and said unaudited financial
statements are not in conformity with generally accepted
Page 23 of 34 pages
<PAGE> 12
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in such Registration Statement and such Prospectus;
or
(2) with respect to the period subsequent to December
31, 1996, there were any changes, at a specified date not more
than five business days prior to the date of the letter, in
the long-term debt of the Company and its subsidiaries or
capital stock of the Company or decreases in the stockholders'
equity of the Company as compared with the amounts shown on
the December 31, 1996 consolidated balance sheet included in
each Registration Statement and each Prospectus, or for the
period from December 31, 1996 to such specified date there
were any decreases, as compared with the corresponding period
in the preceding year, in net revenues or income before income
taxes or in total or per share amounts of net income of the
Company and its subsidiaries, except in all instances for
changes or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said explanation
is not deemed necessary by the Purchasers.
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in each Registration Statement and each Prospectus, agrees with
the accounting records of the Company and its subsidiaries, excluding
any questions of legal interpretation.
References to Prospectus in this paragraph (g) include any supplement
thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in each Registration Statement (exclusive of
any amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (g) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the business or
properties of the Company and its subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the Purchasers,
so material and adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of the Securities as contemplated by each Registration
Statement (exclusive of any amendment thereof) and each Prospectus (exclusive of
any supplement thereto).
(i) At the Closing Date, the Company shall have furnished to
the Purchasers a letter substantially in the form of Exhibit A hereto from each
officer and director of the Company. addressed to the Purchasers, in which each
such person agrees not to offer, sell or contract to sell, or otherwise dispose
of, directly or indirectly, or announce an offering of, any shares of Common
Stock beneficially owned by such person or any securities convertible into, or
exchangeable for,
Page 24 of 34 pages
<PAGE> 13
shares of Common Stock for a period of 90 days following the Execution Time
without the prior written consent of the Purchasers.
(j) At the Execution Time, Ryder Scott Company Petroleum
Engineers shall have furnished to the Purchasers a letter dated as of the
Execution Time substantially in the form heretofore approved by you.
(k) Prior to the Closing Date, the Company shall have
furnished to the Purchasers such further information, certificates and documents
as the Purchasers may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchasers and counsel for the
Purchasers, this Agreement and all obligations of the Purchasers hereunder may
be canceled at, or at any time prior to, the Closing Date by the Purchasers.
Notice of such cancellation shall be given to the Company and each Selling
Stockholder in writing or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Purchasers set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Company or any Selling Stockholder to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Purchasers, the Company will reimburse the Purchasers
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities. If the Company
is required to make any payments to the Purchasers under this Section 7 because
of any Selling Stockholder's refusal, inability or failure to satisfy any
condition to the obligations of the Purchasers set forth in Section 6, such
Selling Stockholders shall reimburse the Company on demand for all amounts so
paid, pro rata in proportion to the percentage of Securities to be sold by each.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Purchaser, the directors, officers, employees
and agents of each Purchaser and each person who controls any Purchaser within
the meaning of either the Act or the Securities Exchange Act of 1934 (the
"Exchange Act") against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law 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 a material fact contained in the
registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in any Preliminary Prospectus or each
Prospectus, or in any amendment thereof or
Page 25 of 34 pages
<PAGE> 14
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 therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Purchaser through the Purchasers specifically
for inclusion therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Selling Stockholder, severally and not jointly,
agrees to indemnify and hold harmless each Purchaser, the directors, officers,
employees and agents of each Purchaser and each person who controls any
Purchaser within the meaning of either the Act or the Exchange Act to the same
extent as the foregoing indemnity from the Company to each Purchaser, but only
with reference to written information furnished to the Company by or on behalf
of such Selling Stockholder specifically for inclusion in the documents referred
to in the foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Selling Stockholder may otherwise have.
(c) [Intentionally Omitted]
(d) Promptly after receipt by an indemnified party under this
Section 8 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 this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party
Page 26 of 34 pages
<PAGE> 15
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each indemnifying party agrees to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the indemnified party may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and by the
Purchasers on the other from the offering of the Securities; provided, however,
that in no case shall any Purchaser (except as may be provided in any agreement
among Purchasers relating to the offering of the Securities) be responsible for
any amount in excess of the underwriting discount or commission applicable to
the Securities purchased by such Purchaser hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, each
indemnifying party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the Selling Stockholders on the one hand and of the Purchasers on
the other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company and the Selling Stockholders shall be deemed to be equal to the
total net proceeds from the offering (before deducting expenses), and benefits
received by the Purchasers shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of the
Prospectus. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company, the Selling Stockholders or the Purchasers. The Company, the Selling
Stockholders and the Purchasers agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (e), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Purchaser within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Purchaser shall have the
same rights to contribution as such Purchaser, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each officer
of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (e).
Page 27 of 34 pages
<PAGE> 16
(f) The liability of each Selling Stockholder under such
Selling Stockholder's representations and warranties contained in Section 1
hereof and under the indemnity and contribution agreements contained in this
Section 8 shall be limited to an amount equal to the purchase price of the
Securities sold by such Selling Stockholder to the Purchasers.
9. Default by any Purchaser. If any one or more Purchasers
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Purchaser or Purchasers hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Purchasers shall be obligated severally to take up and
pay for (in the respective proportions which the amount of Securities set forth
opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Purchasers) the
Securities which the defaulting Purchaser or Purchasers agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Purchaser or Purchasers agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Purchasers shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Purchasers do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Purchaser, the
Selling Stockholders or the Company. In the event of a default by any Purchaser
as set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding seven days, as the Purchasers shall determine in order
that the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Purchaser of its liability, if any, to
the Company, the Selling Stockholders and any nondefaulting Purchaser for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Purchasers, by notice given to the
Company prior to delivery of and payment for the Securities, if prior to such
time (i) trading in the Company's Common Stock shall have been suspended by the
Commission or the National Association of Securities Dealers National Market
System or trading in securities generally on the New York Stock Exchange or the
National Association of Securities Dealers National Market System shall have
been suspended or limited or minimum prices shall have been established on
either of such Exchange or Market System, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the judgment of
the Purchasers, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of any
supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Purchasers set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Purchaser,
any Selling Stockholder or the Company or any of the officers, directors or
controlling
Page 28 of 34
<PAGE> 17
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Purchasers, will be mailed,
delivered or telegraphed and confirmed to them, care of Salomon Brothers Inc, at
Seven World Trade Center, New York, New York, 10048; or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at 301 North Main,
Suite 1900, Wichita, Kansas 67202, attention of the legal department; or if sent
to the Selling Stockholders, will be mailed, delivered or telegraphed and
confirmed to them at the addresses set forth in Schedule II hereto.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
Page 29 of 34 pages
<PAGE> 18
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Stockholders and the several Purchasers.
Very truly yours,
HUGOTON ENERGY CORPORATION
By: /s/ Randall K. Click
-------------------------------
Name: Randall K. Click
Title: Vice President of Land
ODYSSEY PARTNERS, L.P.
By: /s/ Jack Nash
-------------------------------
Name: Jack Nash
Title: General Partner
Page 30 of 34
<PAGE> 19
FIRST RESERVE SECURED ENERGY ASSET FUND,
LIMITED PARTNERSHIP
AMERICAN GAS & OIL INVESTORS LIMITED
PARTNERSHIP
AMERICAN GAS & OIL INVESTORS II LIMITED
PARTNERSHIP
By: FIRST RESERVE CORPORATION,
GENERAL PARTNER
By: /s/ Jonathan Linker
------------------------
Name: Jonathan Linker
Title: Managing Director
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc and
Jefferies & Company, Inc.
By: Salomon Brothers Inc
By: /s/ Robert J. Brooks
-------------------------
Vice President
Page 31 or 34 pages
<PAGE> 20
SCHEDULE I
PURCHASERS
<TABLE>
<CAPTION>
Number of
Underwritten Securities
Purchasers To Be Purchased
- ---------- ---------------
<S> <C>
Salomon Brothers Inc .............................................. 1,321,400
Jefferies & Company, Inc........................................... 1,321,400
---------
Total.......................... 2,642,800
=========
</TABLE>
Page 32 of 34 pages
<PAGE> 21
SCHEDULE II
SELLING STOCKHOLDERS
<TABLE>
<CAPTION>
Name and Address Number of Underwritten
- ---------------- Securities to be Sold
----------------------
<S> <C>
Odyssey Partners, L.P.
31 West 52nd Street................................... 2,142,800
New York, NY 10019
Attention: Stephen Berger
First Reserve Secured Energy
Asset Fund, Limited Partnership....................... 106,060
475 Steamboat Road
Greenwich, CT 06830
Attention: William E. Macaulay
American Gas & Oil Investors
Limited Partnership................................... 196,970
475 Steamboat Road
Greenwich, CT 06830
Attention: William E. Macaulay
AmGO II, Limited Partnership............................... 196,970
475 Steamboat Road
Greenwich, CT 06830
Attention: William E. Macaulay
---------
Total............................................. 2,642,800
=========
</TABLE>
Page 33 of 34 pages
<PAGE> 22
EXHIBIT A
April 14, 1997
Salomon Brothers Inc
Jefferies & Company Inc.
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
This letter is being delivered to you in connection with the proposed
Purchase Agreement (the "Purchase Agreement"), among Hugoton Energy Corporation,
a Kansas corporation (the "Company"), the Selling Stockholders named therein and
each of you, relating to a purchase of shares of Common Stock, no par value of
the Company ("Common Stock").
In order to induce you to enter into the Purchase Agreement, the
undersigned agrees not to offer, sell, contract to sell or otherwise dispose of
directly or indirectly, or announce an offering of, any shares of Common Stock
beneficially owed by the undersigned Company or any security convertible into,
or exchangeable for, shares of Common Stock for a period of 90 days following
the day on which the Purchase Agreement is executed without the prior written
consent of Salomon Brothers Inc, except that the undersigned shall be entitled
to pledge, hypothecate or otherwise encumber shares of Common Stock, subject to
the foregoing restrictions being agreed to by the pledgee of such shares.
If, for any reason, the Purchase Agreement shall be terminated prior to
the Closing Date (as defined in the Purchase Agreement), the agreement set forth
above shall likewise be terminated.
Very truly yours,
Page 34 of 34 pages
