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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Santa Fe Energy Resources, Inc.
(Name of Issuer)
Common Stock, $.01 par value per share
(Title of Class of Securities)
802012 10 4
(CUSIP Number)
Charles Evans Gerber
Neal Gerber & Eisenberg
Two North LaSalle Street
Suite 2200
Chicago, Illinois 60602
(312) 269-8000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 31, 1995
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the
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.
The information required on the remainder on 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).
(continued on following pages)
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1. NAME OF REPORTING PERSON
HC Associates
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC (derived from partnership capital contributions)
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 7. SOLE VOTING POWER
OF 5,203,091
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 5,203,091
WITH
10. SHARED DISPOSITIVE POWER
-0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,203,091
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.1% (based on Santa Fe Energy Resources, Inc.'s Proxy Statement
dated March 21, 1995)
14. TYPE OF REPORTING PERSON
PN
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ONLY THOSE ITEMS AMENDED ARE REPORTED HEREIN
- --------------------------------------------
Capitalized terms not otherwise defined herein are deemed to have the
same meanings as ascribed thereto in the initial Schedule 13D.
Item 2. Identity and Background.
As a result of the transactions described in Item 5 below,
Zell/Chilmark Fund, L.P., formerly a general partner of the Partnership
("ZC"), withdrew from the Partnership and no longer beneficially owns (or
has voting or dispositive power with respect to) any shares of Common
Stock.
Item 5. Interest in Securities of the Issuer.
(a) As of May 15, 1995, the Partnership entered into a partnership
withdrawal and amendment agreement (the "Withdrawal Agreement") with ZC
which, as of such date had a 49.044606 percent interest therein, and the
other general partners of the
Partnership. Pursuant to the Withdrawal Agreement, over time, ZC would be
permitted to withdraw from the Partnership and to receive, either directly
or indirectly, distributions of an aggregate of 5,007,987 shares of Common
Stock currently held by the Partnership (subject to adjustment as set
forth in the Withdrawal Agreement) (the "Distributable Shares"), in
liquidation of its interest in the Partnership. Upon any such
distribution of shares of Common Stock pursuant to the Withdrawal
Agreement, (a) ZC's percentage interest in the Partnership and the number
of remaining Distributable Shares of Common Stock would be reduced
accordingly, and (b) the percent interest of all other partners in the
Partnership will be increased accordingly. Subject to the foregoing and
certain limitations set forth in the Withdrawal Agreement, and until the
earlier to occur of (i) the termination of the Partnership or (ii) the
distribution to ZC of the balance of the Distributable Shares, ZC's
rights, interests and obligations as a partner in the Partnership would
remain in full force and effect.
On or before May 31, 1995, ZC withdrew from the Partnership, received
a distribution of all of the Distributable Shares and sold all of the
Distributable Shares to an unaffiliated purchaser at a price of $9.00 per
share, for an aggregate amount of $45,071,883. Upon conclusion of the
sale, David M. Schulte resigned from the Board of Directors of Sante Fe.
(b) As of May 31, 1995, the Partnership beneficially owned 5,203,091
shares of Common Stock or, to the best of its knowledge, approximately
5.1% of the issued and outstanding shares of Common Stock. The
Partnership has the sole power to vote and to dispose of the 5,203,091
shares of Common Stock beneficially owned thereby.
(c) Other than as described above, during the past 60 days, neither
the Partnership nor, to the best knowledge of the Partnership, any of the
persons identified in Appendix A to the initial Schedule 13D, have
effected any other transactions in the Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
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See Item 5 above.
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Item 7. Material to be Filed as Exhibits
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Exhibit 99.1: Sections 1-5 of the Withdrawal Agreement Exhibit 99.2:
Registration Rights Agreement
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
Dated: June 26, 1995.
HC ASSOCIATES, a general partnership
By: GKH INVESTMENTS, L.P., a partner
By: GKH PARTNERS, L.P., its general partner
By: JAKK HOLDING CORP., a general partner
By: /s/ Melvyn N. Klein
---------------------------
Melvyn N. Klein, President
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EXHIBIT 99.1
PARTNERSHIP WITHDRAWAL AND AMENDMENT AGREEMENT
THIS PARTNERSHIP WITHDRAWAL AND AMENDMENT AGREEMENT is entered into
as of the 15th day of May, 1995 by and between HC Associates, a Delaware
general partnership ("HC") and Zell/Chilmark Fund, L.P., a Delaware
limited partnership ("ZC").
RECITALS
Reference is made to that certain Agreement of Partnership of HC
Associates dated as of December 30, 1992 (the "Partnership Agreement").
All terms used herein bearing initial capital letters which are defined in
the Partnership Agreement shall have like meaning when used herein.
ZC is a general partner of the Partnership with a Percentage
interest, as of the date hereof, of 49.044606%. ZC desires to withdraw
from the Partnership over a period of time and to receive distributions in
kind in liquidation of its Partnership Interest. HC is willing to permit
such withdrawal by ZC, all on the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Distributions in Kind. ZC shall be entitled to request and
receive from HC an aggregate of 5,007,987 shares of common stock, par
value $.01 per share, of Santa Fe Energy Resources, Inc. (the "Company")
now held by HC, subject to adjustment as provided herein (the
"Distributable Shares"). The parties further agree that ZC shall be
entitled to receive such Distributable Shares, or cause such Distributable
Shares to be conveyed directly to its designee, from time to time, upon
delivery to HC of a written notice (a "Distribution Notice") stating the
number of Distributable Shares to be distributed, the effective date of
such distribution (a "Distribution Date"), the place of delivery of
Distributable Shares and providing other relevant information in
reasonable detail, including the name in which the certificates
representing the Distributable Shares shall be issued, whether in the name
of ZC or its designee. (Distributable Shares which are issued in the name
of a designee of ZC shall, nonetheless, be deemed to have been distributed
by HC to ZC and then transferred from ZC to such designee). On the date
specified in the Distribution Notice, HC shall use its reasonable best
efforts to cause to be delivered to ZC certificates representing the
number of Distributable Shares which are the subject of the Distribution
Notice, duly endorsed for transfer as designated in the Distribution
Notice or otherwise accompanied by a duly executed assignment separate
from certificate, in each case completed in accordance with the
instructions contained in the Distribution Notice, or on such other terms
as shall be acceptable to ZC and HC.
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2. Adjustment of Percentage Interest. In addition to any other
adjustments to the Percentage Interests of the Partners as provided in the
Partnership Agreement (other than adjustments resulting solely from the
distribution of Distributable Shares), as of each Distribution Date
(assuming delivery by HC of certificates representing Distributable
Shares, as contemplated by Paragraph 1 hereof, the Percentage Interest of
ZC in the Partnership shall be adjusted to equal the percentage derived by
dividing the number of Distributable Shares remaining after the
disposition identified in the applicable Distribution Notice by the total
number of shares of Company common stock (or other securities or assets as
contemplated by Paragraph 3 hereof) held by HC after giving effect to such
disposition, and the respective Percentage Interests of each other Partner
shall be increased pro rata based on their respective Percentage Interests
immediately prior to such disposition. The reduction of ZC's Percentage
Interest in HC shall not affect the number of then remaining Distributable
Shares, which shall be subject to adjustment from time to time pursuant to
Paragraph 3.
3. Adjustment of Number of Distributable Shares. The number of
Distributable Shares shall be subject to adjustment as follows: (i) as of
each Distribution Date, the number of Distributable Shares shall be
reduced by the number of Distributable Shares distributed with respect to
such Distribution Date; (ii) in case the Company shall at any time
subdivide or split its outstanding shares of common stock into a greater
number of shares, the number of Distributable Shares in effect immediately
prior to such subdivision shall be proportionately increased, and
conversely, in case the outstanding shares of common stock of the Company
shall be combined into a smaller number of shares, the number of
Distributable Shares in effect immediately prior to such combination shall
be proportionately reduced; (iii) in case the Company shall declare a
dividend or make any other distribution upon its common stock payable in
common stock, or other securities of the Company or any other issuer, the
number of Distributable Shares shall be increased by the number of shares
of common stock distributed in respect of the number of Distributable
Shares in effect immediately prior to such distribution; (iv) if any
capital reorganization or reclassification of the capital stock of the
Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of common
stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for common stock, then, Distributable Shares
shall mean, in lieu of the shares of the common stock of the Company, such
shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for the number of Distributable Shares in effect
immediately prior to such transaction, and in any such case appropriate
provision shall be made with respect to the rights and interests of the
parties to the end that the provisions hereof shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter constituting Distributable Shares; (v) in
the event of a merger or consolidation of the Company with or into another
corporation as a result of which a number of shares of common stock of the
surviving corporation greater or lesser than the number of shares of
common stock of the Company outstanding immediately prior to such merger
or consolidation are issuable to holders of common stock of the Company,
then the number of Distributable Shares in effect immediately prior to
such merger or consolidation shall be adjusted in the same manner as
though there were a subdivision or combination of the outstanding shares
of common stock of the
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Company outstanding immediately prior to such merger or consolidation; and
(vi) in the case of any other reorganization of the Company or in the
event HC shall acquire any securities or assets, other than as
contemplated by clauses (ii) -(v) above, the number of Distributable
Shares shall be subject to equitable adjustment to effectuate the purpose
and intent of this Agreement and to assure that ZC shall at all times be
entitled to receive Distributable Shares or other securities or assets
from time to time held by HC based on its then Percentage Interest.
4. Restriction on Disposition of Distributable Shares. HC shall
not sell, exchange, transfer or otherwise dispose of the Distributable
Shares; provided, however, that in the case of the dissolution and final
liquidation of HC, ZC shall be given at least forty-five (45) days' prior
written notice of any proposed liquidating distributions to allow ZC
sufficient time to elect to receive the Distributable Shares prior to the
consummation of such transaction. At such time as the Distributable
Shares consist only of 1,000,000 or fewer shares of Company common stock,
ZC shall accept and receive a distribution of such remaining Distributable
Shares, provided that such receipt will not require ZC to comply with the
report-and-wait requirements of the Hart Scott Rodino Improvements Act of
1976, as amended.
5. Partnership Rights Retained. Until the earlier to occur of (i)
the termination of the Partnership or (ii) the distribution to ZC of the
balance of the Distributable Shares (together with any other assets to
which ZC may be hereafter entitled in respect of its Percentage Interest)
ZC's rights, interests and obligations as a Partner, including, without
limitation, the right to receive distributions of Cash Flow and
allocations of Partnership Net Income or Net Loss, shall remain in full
force and effect, (subject to adjustment based on ZC's Percentage Interest
from time to time as contemplated hereby); provided, however, that,
without regard to any such termination or distribution, ZC shall continue
to be subject to, and entitled to benefit from, the indemnification
provisions of the Partnership Agreement with respect to the period prior
to such withdrawal or termination date. Notwithstanding the foregoing,
from and after the date hereof, (i) GKH Investments, L.P. shall be the Tax
Matters Partner of HC, (ii) ZC waives the right to participate under the
terms of the registration rights agreement entered into between HC and the
Company, and (iii) ZC shall not be entitled to vote with respect to, or
approve any matter relating to, the sale, exchange, transfer or other
disposition of assets of HC which do not constitute Distributable Shares.
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EXHIBIT 99.2
March 24, 1995
HC Associates
200 West Madison Street
27th Floor
Chicago, Illinois 60606
Re: Agreement Regarding Shelf Registration Statement
Gentlemen:
As we discussed, Santa Fe Energy Resources, Inc. (the "Company"),
agrees that upon the receipt of a written demand (which demand may be
submitted to the Company once, provided such registration is effected and
the registration statement is declared effective) from HC Associates, GKH
Partners, L.P., GKH Investments, L.P., Ernest H. Cockrell Texas
Testamentary Trust or Carol Cockrell Jennings Texas Testamentary Trust
(collectively, the "Selling Stockholders") at any time prior to March 27,
2000 to file with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 or such other form as
may be appropriate (the "Registration Statement") to register the offer
and sale, from time to time, by the Selling Stockholders of up to
5,203,091 shares of the Company's common stock, par value $0.01 per share,
that are beneficially owned by the Selling Stockholders as of the date
hereof, plus such additional number of shares of the Company's common
stock that the Selling Stockholders may own in the future as a result of
any stock split, stock distribution or stock dividend made by the Company
(collectively, the "Shares"). Such agreement to register shall be subject
to the following terms and conditions:
1. Registration Procedures. Upon your demand, the Company will use
its reasonable best efforts to effect the registration and facilitate the
sale and distribution of all of the Shares or such portion thereof as the
Selling Stockholders may elect (the "Offered Securities") in accordance
with the intended method of disposition thereof and pursuant thereto the
Company will as expeditiously as reasonably possible, but subject to the
provisions hereof:
(a) prepare and file with the Commission a registration
statement with respect to such Offered Securities and use its reasonable
best efforts to cause such registration statement to become effective
(provided that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company will furnish on a timely
basis to the counsel selected by the Selling Stockholders copies of all
such documents proposed to be filed, which documents will be subject to
the review of such counsel);
(b) subject to the terms of paragraph 3, prepare and file with
the Commission such amendments, post-effective amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
continuously effective for the period required by the intended method of
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disposition or to describe the terms of any offering made from an
effective shelf registration, and comply with the provisions of the
Securities Act of 1933, as amended (the "Securities Act") with respect to
the disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of disposition
by the Selling Stockholders set forth in such registration statement;
(c) furnish to the Selling Stockholders such number of copies
of such registration statement, each amendment, post-effective amendment
and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other documents
as the Selling Stockholders may reasonably request in order to facilitate
the disposition of the Offered Securities; the Company consents to the use
of the prospectus, including each preliminary prospectus, by the Selling
Stockholders in connection with the offering and sale of the Offered
Securities covered by the prospectus or the preliminary prospectus;
(d) use its reasonable best efforts to register or qualify such
Offered Securities under such other securities or blue sky laws of such
jurisdictions as the Selling Stockholders reasonably request and do any
and all other acts and things which may be reasonably necessary or
advisable to enable the Selling Stockholders to consummate the disposition
in such jurisdictions of the Offered Securities owned by the Selling
Stockholders (provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject
itself to taxation in any such jurisdiction, (iii) consent to general
service of process in any such jurisdiction (unless the Company is subject
to service in such jurisdiction and except as may be required by the
Securities Act), or (iv) qualify such Offered Securities in a given
jurisdiction where expressions of investment interest are not sufficient
in such jurisdiction to reasonably justify the expense of qualification in
that jurisdiction or where such qualification would require the Company to
register as a broker or dealer in such jurisdiction);
(e) promptly notify the Selling Stockholders at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any material fact necessary, in
light of the circumstances under which made, to make the statements
therein not misleading, and, at the request of the Selling Stockholders
and subject to the third paragraph of paragraph 3, the Company will
promptly prepare and furnish to the Selling Stockholders a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Offered Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
necessary, in light of the circumstances under which made, to make the
statements therein not misleading;
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(f) provide a transfer agent and registrar of all such Offered
Securities not later than the effective date of such registration
statement and thereafter maintain such a transfer agent and registrar, and
otherwise cooperate with the Selling Stockholders and any managing
underwriter of such offering to facilitate the timely preparation and
delivery of certificates representing Offered Securities to be sold, and
enable such Offered Securities to be in such denominations and registered
in such names as the managing underwriter may reasonably request at least
two business days prior to any sale of Offered Securities to the
underwriters;
(g) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions
as the Selling Stockholders or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Offered
Securities, including, without limitation:
(i) making such representations and warranties to the
underwriters in form, substance and scope reasonably
satisfactory to the managing underwriter and the Company, as
are customarily made by issuers to underwriters in primary
underwritten offerings;
(ii) obtaining opinions (and, if required, updates
thereof) of counsel, which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the managing
underwriter, if any, and addressed to the managing underwriter
covering the matters customarily covered in opinions requested
in underwritten offerings and such other matters as may be
reasonably requested by the managing underwriter;
(iii) causing the underwriting agreements to set forth
in full the indemnification provisions and procedures of
paragraph 2 (or such other substantially similar provisions and
procedures as the managing underwriter shall reasonably
request) with respect to all parties to be indemnified pursuant
to said paragraph; and
(iv) delivering such documents (including causing the
Company's independent public accountants to furnish a customary
"cold comfort" letter) and certificates as may be reasonably
requested by the Selling Stockholders to evidence compliance
with the provisions of this paragraph 1 and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company;
(h) upon receipt by the Company of reasonable confidentiality
agreements, make available for inspection by any underwriter participating
in any disposition pursuant to such registration statement and any
attorney, accountant or other agent retained by any such underwriter, all
financial and other records, pertinent corporate documents and properties
of the Company, and cause the Company's officers, directors, employees and
independent accountants to be available on a reasonable basis and
cooperate with such parties' "due diligence" and to supply all information
reasonably requested by any such underwriter, attorney, accountant or
agent in connection with such registration statement, provided that the
Company may refrain from disclosing any proprietary or other information
that is not material to the Company's financial condition or results of
operations;
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(i) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or
suspending the qualification of any Common Stock included in such
registration statement for sale in any jurisdiction, the Company will
use its reasonable best efforts promptly to obtain the withdrawal of
such order; and
(j) use its reasonable best efforts to cause the Offered
Securities covered by a registration statement to be registered with
or approved by such other governmental agencies or authorities as may
be necessary by virtue of the business and operations of the Company
to enable the Selling Stockholders to consummate the disposition of
such Offered Securities.
The Selling Stockholders agree that, upon receipt of any notice from
the Company of the occurrence of any event of the kind described in
paragraphs l(e) or 1(i) hereof, the Selling Stockholders will forthwith
discontinue disposition of the Offered Shares until receipt of the copies
of an appropriate supplement or amendment to the prospectus under
paragraph 1(e) or until the withdrawal of such order under paragraph 1(i).
2. Indemnification.
(a) The Company agrees to indemnify to the fullest extent
permitted by law, the Selling Stockholders, its officers, directors,
stockholders, partners, employees and directors and each person who
controls (within the meaning of the Securities Act) the Selling
Stockholders against all losses, claims, damages, liabilities and
expenses whatsoever, as incurred, including any of the foregoing, and
reasonable fees and expenses of counsel incurred in investigating,
preparing or defending against, or aggregate amounts paid in
settlement of, any litigation, action, investigation or proceeding by
any third party or governmental agency or body, commenced or
threatened, in each case whether or not a party, or any claim
whatsoever based upon, caused by or arising out of any untrue or
alleged untrue statement of a material fact contained in any
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as the same are caused by or contained in any information
furnished in writing to the Company by the Selling Stockholders (or
on behalf of the Selling Stockholders) expressly for use therein or
by the Selling Stockholders' failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements
thereto after the Company has furnished the Selling Stockholders with
a sufficient number of copies of the same. In connection with an
underwritten offering, the Company will indemnify such underwriters,
their officers and directors and each person who controls (within the
meaning of the Securities Act) such underwriters to the same extent
as provided above with respect to the indemnification.
(b) In connection with any registration statement in which any
of the Selling Stockholders is participating, the Selling
Stockholders will furnish to the Company in writing such information
relating to the Selling Stockholders as the Company reasonably
requests for use in connection with any such registration statement
or prospectus and, to the
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fullest extent permitted by law, will indemnify the Company, its
directors, shareholders, employees and officers and each Person who
controls (within the meaning of the Securities Act) the Company
against any losses, claims, damages, liabilities and expenses
whatsoever, as incurred, including any of the foregoing, and
reasonable fees and expenses of counsel incurred in investigating,
preparing or defending against, or aggregate amounts paid in
settlement of, any litigation, action, investigation or proceeding by
any third party or governmental agency or body, commenced or
threatened, in each case whether or not a party, or any claim
whatsoever based upon, caused by or arising out of any untrue or
alleged untrue statement of a material fact contained in the
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to
the extent that such untrue statement or omission is contained in any
information so furnished in writing by the Selling Stockholders
expressly for such purpose and is reasonably relied upon in
conformity with such written information, or by the Selling
Stockholders' failure to deliver a copy of the registration statement
or prospectus or any amendments or supplements thereto after the
Company has furnished the Selling Stockholders with a sufficient
number of copies of same.
(c) Any person entitled to indemnification hereunder will (i)
give reasonably prompt written notice to the indemnifying party of
any claim with respect to which it seeks indemnification and (ii)
unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist
with respect to such claim, permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying
party will not be subject to any liability for any settlement made by
the indemnified party without its consent (but such consent will not
be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party
and any other of such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made
by or on behalf of the indemnified party or any officer, director or
controlling Person of such indemnified party and will survive the
transfer of securities. The Company also agrees to make such
provisions, as are reasonably requested by any indemnified party, for
contribution to such party in the event the Company's indemnification
is unavailable for any reason. Such right to contribution shall be
in such proportion as is appropriate to reflect the relative fault of
and benefits to the Company on the one hand and the Selling
Stockholders on the other, in connection with the statements or
omissions which result in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations.
The relative benefits to the indemnifying party and indemnified
parties shall be determined by reference to, among other things, the
total proceeds received by the indemnifying party and indemnified
parties in connection with the offering to which such losses,
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claims, damages, liabilities or expenses relate. The relative fault
of the indemnifying party and indemnified parties shall be determined
by reference to, among other things, whether the action in question,
including any untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying
party or the indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant hereto were determined by pro rata allocation or by
any other method of allocation which does not take account of the
equitable considerations referred to in the immediate preceding paragraph.
No person found guilty of any fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation.
3. Underwritten Offerings and Black-Out Periods. The Company
agrees to maintain an effective registration statement covering the
Offered Securities until the second anniversary of the date that such
registration statement is declared effective by the Commission plus any
additional periods represented by any "Black-out Period" (defined below).
The Selling Stockholders may request permission from the Company to offer
and sell Offered Securities pursuant to an underwritten offering (an
"Underwritten Offering"). Any request (an "Underwriting Request") for an
Underwritten Offering shall be in writing and shall specify the
approximate number of Offered Securities to be included in such offering.
Within 10 days after receipt by the Company of such Underwriting Request,
the Company will provide written notice to the Selling Stockholders
indicating whether or not it consents to such request.
The Company shall be entitled to refuse its consent and to postpone
the commencement of any Underwritten Offering for a period of up to 180
days after written notice to the Selling Stockholders of its refusal to
consent to such request based upon a determination made by the Company to
promptly proceed to prepare and file a registration statement (other than
the registration pursuant to which the offer and sale of the Offered
Securities shall be registered or registration statements on Form S-8 or
other similar form) and the Company shall be entitled to postpone for up
to 90 days an Underwritten Offering if such offering (y) would require
disclosure of material information the Company has a bona fide business
purpose of retaining as confidential or (z) have a material adverse effect
on the Company or its shareholders in relation to any financing,
acquisition, corporate reorganization or other material transaction
contemplated by the Board of Directors of the Company, involving the
Company or any of its affiliates, in each case as determined by the
Company. The Company agrees to notify the Selling Stockholders promptly
upon its abandonment of any proposed offering or other material
transaction as described above, upon which notification the Selling
Stockholders shall be permitted to proceed with the Underwritten Offering.
The Selling Stockholders agree that if the Company has delivered
preliminary or final prospectuses to the Selling Stockholders and after
having done so (a) the Company determines that the prospectus needs to be
amended or supplemented to comply with the requirements of the Securities
Act, (b) a stop order suspending the effectiveness of the registration
statement is issued by the Commission or (c) the Company shall, in good
faith and for business reasons, enter into negotiations relating to or
otherwise commence a material
Page 13 of 15 Pages<PAGE>
<PAGE>
business transaction, including, without limitation, the acquisition or
divestiture of assets or the offering or sale of securities, then the
Company shall promptly notify the Selling Stockholders and the Selling
Stockholders shall immediately cease making offers of the Shares and
return all remaining prospectuses to the Company. Following such
amendment or supplement, the lifting of any stop order or the completion
or termination of any material transaction, the Company shall promptly
provide the Selling Stockholders with revised prospectuses and, following
receipt of the revised prospectuses, the Selling Stockholders shall be
free to resume making offers of the Offered Securities, or any portion
thereof.
The period during which the Company exercises its rights as described
in this paragraph 3 to postpone, delay or interrupt the offer and sale of
the Offered Securities or during the pendency of any stop order,
injunction or other order or requirement of the Commission or any other
governmental agency or court shall be referred to herein as a "Black-out
Period."
4. Holdback Agreements. The Company agrees (a) not to effect any
public sale or public distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for such
securities, during the 20-day period prior to and during the 120-day
period beginning on the commencement date of any Underwritten Offering on
behalf of the Selling Stockholders (except pursuant to (i) registrations
on Form S-8 or any successor form, (ii) registrations on Form S-4 or any
successor form, (iii) registrations of securities in connection with a
dividend reinvestment plan on form(s) applicable to such securities)
unless the underwriters managing an Underwritten Offering on behalf of the
Selling Stockholders otherwise agree, and (b) to use its reasonable best
efforts to obtain agreements from its officers and directors to agree not
to effect any public sale or public distribution of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the Underwritten
Offering on behalf of the Selling Stockholders otherwise agree.
The Selling Stockholders agree not to effect any public sale or
public distribution of the Offered Securities, during the 20-day period
prior to and during the 120-day period beginning on the effective date of
any underwritten offering on behalf of the Company unless the underwriters
managing such underwritten offering on behalf of the Company otherwise
agree; provided, however, that the Company agrees that the Selling
Stockholders need not comply with the foregoing restriction unless the
Company's directors, officers and their 5% stockholders agree to a similar
restriction in connection with such underwritten offering.
The Company will pay all costs and expenses of the registration of
the Shares (including any costs and expenses incurred, to amend or
supplement the prospectus, if required), except that the Selling
Stockholders shall pay, and the Company shall not pay, any underwriting or
brokerage discounts or commissions, any fees or disbursements of legal
counsel for the Selling Stockholders, or any of them, or any transfer or
other taxes attributable to the registration or sale of the Shares.
Each of the Selling Stockholders shall be required to furnish to the
Company such information regarding such Selling Stockholder and the
distribution proposed by such Selling Stockholder as the Company may
request and as shall be required in connection with any registration,
qualification or compliance referred to herein.
Page 14 of 15 Pages<PAGE>
<PAGE>
If the foregoing is acceptable to you, please execute this letter and
enclosed duplicate in the space provided below and return one executed
original to me.
Very truly yours,
SANTA FE ENERGY RESOURCES, INC.
By:
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Its:
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Agreed to and accepted
this the --- day of March 1995.
HC ASSOCIATES
By:
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Its:
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GKH INVESTMENT, L.P.
By:
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Its:
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GKH PARTNERS, L.P.
By:
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Its:
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ERNEST H. COCKRELL TEXAS
TESTAMENTARY TRUST
By:
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Its:
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CAROL COCKRELL JENNINGS TEXAS
TESTAMENTARY TRUST
By:
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Its:
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Page 15 of 15 Pages<PAGE>
