SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(SECOND AMENDMENT)
Under the Securities Exchange Act of 1934
PetroCorp Incorporated
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
71645N 10 1
(CUSIP Number)
FREDERIC DORWART
Old City Hall
124 East Fourth Street
Tulsa, OK 74103-5010
(918) 583-9922
(918) 583-8251 (Facsimile)
_____________________________________
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
October 9, 1996
_____________________________________
(Date of Event Which Required Filing)
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 this box [ ].
Check the following box if a fee is being paid with this statement
[ ].
<PAGE>
CUSIP No. 71645N 10 1
(1) Name of Reporting Person S.S. Kaiser-Francis Oil Co.
or I.R.S. Identification No. I.R.S. ID. #73-1006655
of Above Person
(2) Check the Appropriate Box (a) [ ]
if a Member of a Group (b) [ ]
(See instructions)
(3) SEC Use Only
(4) Source of Funds (See instructions) WC
(5) Check if Disclosure of Legal
Proceedings is Required
Pursuant to Items 2(d) or 2(e)
(6) Citizenship or Place State of Delaware
of Organization
Number of Shares Beneficially
Owned by Each Reporting
Person With:
(7) Sole Voting Power 4,092,957
(8) Shared Voting Power None
(9) Sole Dispositive Power 4,092,957
(10) Shared Dispositive Power None
(11) Aggregate Amount Beneficially Owned 4,092,957
by Each Reporting Person
(12) Check if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares
(See instructions)
(13) Percent of Class Represented by 48%
Amount in Row (11)
(14) Type of Reporting Person CO
(See instructions)
<PAGE>
SCHEDULE 13D
Filed by Kaiser-Francis Oil Company
In Connection with Transactions in the
Shares of PetroCorp Incorporated
Item 1. Security and Issuer.
This statement relates to the common stock, par value $.01 per share (the
"Common Stock"), of PetroCorp Incorporated, a Texas corporation (the
"Issuer"). The principal executive offices of the Issuer are located at
16800 Greenspoint Park Drive, Suite 300, North Atrium, Houston, Texas.
Item 2. Identity and Background.
(1) General. GBK Corporation owns all of the issued and
outstanding capital stock of Kaiser-Francis Oil Company
("Kaiser-Francis"). George B. Kaiser ("Kaiser") owns 78.23%
of the issued and outstanding capital stock of GBK
Corporation. Affiliates of Kaiser own 21.77% of the issued
and outstanding capital stock of GBK Corporation.
(2) GBK Corporation. GBK Corporation is a Delaware corporation,
whose principal business is a holding company. The address of
the principal business and principal office of GBK Corporation
is:
6733 South Yale
Tulsa, Oklahoma 74136
With respect to paragraphs (d) and (e) of this Item 2, none.
(3) Kaiser-Francis Oil Company. Kaiser-Francis is a Delaware
corporation, whose principal business is the exploration for
and production of oil and gas and the acquisition and
disposition of producing oil and gas properties. The address
of the principal business and principal office of
Kaiser-Francis Oil Company is:
6733 South Yale
Tulsa, Oklahoma 74136
With respect to paragraphs (d) and (e) of this Item 2,
none.
(4) The executive officers, directors, and each person who may be
deemed to be controlling GBK Corporation and Kaiser-Francis
are as follows:
President: George B. Kaiser
Executive Vice President: James A. Willis
Chief Financial Officer: D. Joseph Graham
Secretary: Frederic Dorwart
Treasurer: Reece A. Hembree
Director: George B. Kaiser
<PAGE>
(5) (a) George B. Kaiser
(b) 6733 South Yale
Tulsa, OK 74136
(c) Independent Oil and Gas Producer
KAISER-FRANCIS OIL COMPANY
6733 South Yale
Tulsa, OK 74136
(d) No
(e) No
(f) United States of America
(6) (a) James A. Willis
(b) 6733 South Yale
Tulsa, OK 74136
(c) Executive Vice President
KAISER-FRANCIS OIL COMPANY
6733 South Yale
Tulsa, OK 74136
(d) No
(e) No
(f) United States of America
(7) (a) D. Joseph Graham
(b) 6733 South Yale
Tulsa, OK 74136
(c) Chief Financial Officer
KAISER-FRANCIS OIL COMPANY
6733 South Yale
Tulsa, OK 74136
(d) No
(e) No
(f) United States of America
(8) (a) Frederic Dorwart
(b) Old City Hall
124 East Fourth Street
Tulsa, OK 74103-5010
<PAGE>
(c) Law
Old City Hall
124 East Fourth Street
Tulsa, OK 74103-5010
(d) No
(e) No
(f) United States of America
(9) (a) Reece A. Hembree
(b) 6733 South Yale
Tulsa, OK 74136
(c) Treasurer
KAISER-FRANCIS OIL COMPANY
6733 South Yale
Tulsa, OK 74136
(d) No
(e) No
(f) United States of America
Item 3. Source or Amount of Funds or Other Consideration.
Working capital: $13,110,170.25;
Item 4. Kaiser-Francis has acquired its shares of PetroCorp Common Stock
primarily to hold for investment. Dependent upon market conditions,
pricing, and availability, Kaiser-Francis intends to acquire
additional shares of PetroCorp. Gary R. Christopher, Acquisitions
Coordinator of Kaiser-Francis, was a director of PetroCorp.
Kaiser-Francis has no intention of attempting to effect any change
in the business plan, policies, officers or directors of PetroCorp.
Dependent upon market conditions, pricing, industry conditions and
company performance, Kaiser-Francis may determine to sell all or
part of its shareholdings.
Item 5. Interest in Securities of the Issuer.
(a) At April 21, 1996, Kaiser-Francis owned 374,300 shares of PetroCorp
Common Stock. During the period commencing April 22, 1996 and ending
as of the date of the filing of this amendment, Kaiser-Francis has
made the following purchases (sales) of Common Stock of the issuer:
No. of Shares Price Per Share Date
5,000 8.00 6/24/96
1,000 8.125 6/25/96
4,000 8.25 6/25/96
2,121,000 8.25 7/26/96
3,000 8.125 10/01/96
1,586,157 8.25 10/15/96
(b) On June 21, 1996, Kaiser-Francis entered into a definitive agreement
to purchase 2,121,000 shares of PetroCorp Common Stock from the
holder thereof in a privately negotiated transaction at a per share
price of $8.25 or an aggregate purchase price of $17,498,250. The
Kaiser-Francis Agreement provides that if during the twelve month
period following the closing, Kaiser-Francis acquires additional
shares aggregating more than two percent of the total number of
shares outstanding on the date hereof and more than one percent of
the shares has been acquired for a price that exceeds $8.25 per
share, then Kaiser-Francis shall pay to the seller of the shares the
product of (i) the highest price per share paid by Kaiser-Francis
for a share during the twelve month period less $8.25 and
(ii) 2,121,000.
(c) Kaiser-Francis consummated the purchase of the 2,121,000 shares of
PetroCorp Common Stock on July 26, 1996. In connection with the
consummation, the holder assigned to Kaiser-Francis all of the
holder's rights under a Registration Rights Agreement dated January
18, 1994. The Registration Rights Agreement provides, generally,
that the holder may require PetroCorp to register the shares of
PetroCorp Common Stock for sale by the holder in one or more
registrations on the terms set forth in the Registration Rights
Agreement.
(d) Frederic Dorwart is trustee of the George B. and Betty E. Kaiser
Foundation. At April 21, 1996, the Foundation owned 8,000 shares of
PetroCorp Common Stock. Kaiser-Francis disclaims any beneficial
interest in the shares held by the Foundation and the shares are not
included in the interests reported in this filing.
(e) On June 25, 1996, Gary R. Christopher purchased 500 shares of
Petro-Corp Common Stock at $8-1/8 per share. On May 3, 1996,
Mr. Christopher purchased 1,000 shares at $7-1/2 per share.
Kaiser-Francis disclaims any beneficial interest in the shares held
by Mr. Christopher and the shares are not included in the interests
reported in this filing.
(f) On October 9, 1996, Kaiser-Francis entered into an agreement with a
holder of 1,586,157 PetroCorp Common Stock shares to acquire then
1,586,157 shares of PetroCorp Common Stock at $8.25 per share or an
aggregate price of $13,085,795.25. The Agreement provides that if,
prior to July 26, 1997, Kaiser-Francis acquires additional shares
aggregating more than two percent of the total number of shares
outstanding on the date hereof and more than one percent of the
shares has been acquired for a price that exceeds $8.25 per share,
the Kaiser-Francis shall pay to the holder the product of (i) the
highest price per share paid by Kaiser-Francis for a share during
the twelve month period less $8.25 and (ii) 1,586,157. Pursuant to
the Agreement , the holder assigned to Kaiser-Francis all of the
holder's rights, and Kaiser-Francis accepted all of holder's
obligations. under a Registration Rights Agreement dated January 18,
1994. The Registration Rights Agreement provides, generally, that the
holder may not sell the shares without compliance with the Federal
securities laws and may require PetroCorp to register the shares of
PetroCorp Common Stock for sale by the holder in one or more
registrations on the terms set forth in the Registration Rights
Agreement.
Item 6. Contracts, Arrangements, or Understandings with Respect to
Securities of Issuer.
None; except as described in Item 5.
Item 7. Material to be Filed as Exhibits.
(a) Agreement Dated June 21, 1996 between First Reserve
Corporation and Kaiser-Francis Oil Corporation respecting
purchase of shares of PetroCorp Common Stock (Previously
Filed).
(b) Registration Rights Agreement dated January 18, 1994 (Previously
filed).
(c) Assignment Agreement dated July 26, 1996 (Previously filed).
(d) Agreement Dated October 9, 1996 between LHS Holding Company and
kaiser-Francis Oil Corporation respecting purchase of shares of
PetroCorp Common Stock.
(e) Registration Rights Agreement dated August 24, 1993 between
PetroCorp, Incorporated and L.S. Holding Company.
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.
Signed:
/s/ Gary R. Christopher
_________________________
Gary R. Christopher
Exhibit (d)
L.S. HOLDING COMPANY
One Beaver Valley Road
Wilmington, DE 19850
Tel: (302) 479-6212 Fax: (302) 479-6618
October 9, 1996
Kaiser-Francis Oil Company
P.O. Box 21468
Tulsa, Oklahoma 74121-1468
Attn: Mr. Gary R Christopher
Dear Sirs:
L.S. Holding Company ("LHS") for and in consideration of the
agreements set forth herein, agrees with Kaiser-Francis Oil Company
("KFOC") as follows:
1. Purchase of Shares by KFOC. Subject only to Section 2
below, LHS shall sell and deliver to KFOC, and KFOC shall purchase
from LHS, 1,586,157 shares of common stock ("PETR Shares") of
PetroCorp Incorporated, a Delaware corporation ("PETR"),
representing all of the shares of PETR owned of record and
beneficially by LHS (the "LHS Shares") at a price of $8.25 per
share in cash for an aggregate cash consideration of $13,085,795.25
(such amount, the "Purchase Price"). KFOC shall pay the Purchase
Price by wire transfer of immediately available funds to such bank
in the United States of America as LHS shall designate reasonably
in advance of the payment date against delivery of the stock
certificates properly representing the LHS Shares together with an
assignment of the LHS Shares to KFOC in usual and customary form
satisfactory to cause the LHS Shares to be transferred to KFOC on
the books and records of PETR free and clear of all liens, claims,
restrictions, and encumbrances except the restrictions arising
under that certain Registration Rights Agreement dated as of
January 18, 1994 between PETR and LHS (the "Registration Rights
Agreement"). The closing of the purchase by, and the sale to, KFOC
shall take place as soon as reasonably practicable when and where
the parties mutually agree and, failing such agreement, at the
offices of KFOC at 10:00 AM Tulsa Local Time on 18 October 1996
(the "Closing").
2. Excess Amount. In the event that during the period
commencing on the date hereof and ending on July 26, 1997 (the
"Price Protection Period") (i) KFOC acquires at any time, or from
time to time, in any transaction or series of transactions (whether
privately negotiated, over-the-counter, or pursuant to a tender
offer or other transaction involving the holders of PETR Shares)
additional PETR Shares aggregating more than two percent (2%) of
the total number of PETR Shares outstanding on the date hereof and
(ii) more than one percent (1%) of the outstanding PETR Shares have
been acquired by KFOC for a price that exceeds $8.25 per share,
then KFOC shall pay to LHS the "Excess Amount." The "Excess Amount"
is defined as the product of (i) the highest price per share paid
by KFOC for a PETR Share in any such transaction during the Price
Protection Period (the "Excess Price") less $8.25 and (ii)
1,586,157. The Excess Amount shall be paid in cash to LHS not later
than five business days following the date of any transaction
requiring the payment of the Excess Amount. In the event that,
following payment of any Excess Amount KFOC thereafter acquires
during the Price Protection Period additional PETR Shares at a
price that is higher than the Excess Price used for calculating the
Excess Amount, then the Excess Amount shall be recalculated using
such higher Excess Price and the difference shall be forwarded to
the Funds not later than five business days following the date of
any transaction requiring the payment of such higher Excess Amount.
3. Registration Rights Agreement. Subject only to the
Closing, LHS hereby assigns to KFOC all of its rights arising
under, and KFOC hereby agrees to be bound by, the Registration
Rights Agreement. LHS hereby represents and warrants that the
Registration Rights Agreement is in full force and affect in
accordance with its terms, has not been amended or modified, is
fully assignable by LHS to a third party, and LHS has fully
performed all of its obligations arising the Registration Rights
Agreement.
4. Representations, Warranties and Covenants.
(a) LHS represents and warrants to KFOC that (i) LHS
is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and
has all requisite corporate power and authority to execute and
deliver this agreement; (ii) its execution and delivery of this
agreement and its consummation of the transactions contemplated
hereby have been duly and validly authorized by its Board of
Directors and no other corporate proceedings are necessary to
authorize this agreement or to consummate the transactions
contemplated by this agreement; and (iii) this agreement has been
duly and validly executed and delivered by LHS and constitutes the
valid and binding agreement of LHS, enforceable against LHS in
accordance with its terms, except that such enforceability (x) may
be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting or relating to enforcement of creditors' rights
generally and (y) is subject to general principles of equity.
(b) LHS represents, warrants and covenants to KFOC
that (i) the LHS Shares are and on the date of sale to KFOC will be
owned beneficially and of record by LHS; (ii) LHS has and on the
date of sale to KFOC will have good and valid title to the LHS
Shares, free and clear of all claims, liens, encumbrances,
restrictions, security interests and charges of any nature
whatsoever, including without limitation any preemptive right or
right of first refusal or first offer of any party, excepting only
the restrictions arising under the Registration Rights Agreement;
and (iii) upon the transfer by LHS to KFOC of the PETR Shares to be
purchased by KFOC, and the registration of such shares in KFOC's
name in the stock records of PETR, KFOC shall acquire all the
rights of LHS in such shares, free of any adverse claim or any lien
in favor of LHS or any other person, except the restrictions
arising under the Registration Rights Agreement.
(c) KFOC represents, warrants and covenants to LHS
that KFOC (i) has on or before the date hereof made its own
independent investment decision with respect to entering into this
agreement and consummating the transactions contemplated hereby and
has not relied upon information provided by LHS in reaching such
conclusions; and (ii) will not sell or otherwise dispose of the
shares to be purchased by it pursuant to this agreement except in
compliance with applicable securities laws.
5. Further Undertakings. KFOC and LHS will execute such
documents and instruments as may be necessary or desirable to
effect the transfer of the shares to be purchased by KFOC
hereunder.
6. Entire Agreement; Counterparts. This agreement
represents our entire understanding, and supersedes in all respects
all other prior letters and understandings between us, with respect
to the subject matter hereof. This agreement may be executed in two
counterparts, each of which shall be deemed to be an original, but
both of which shall constitute one and the same agreement. This
agreement may be executed and delivered by facsimile transmission
of a signed counterpart.
7. Confidentiality. Except as required by applicable law,
neither of us shall disclose the terms or existence of this
agreement to any person other than PETR without the consent of the
other.
8. Governing Law. This agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State
of New York, United States of America.
If this letter accurately reflects your understanding of our
agreement, kindly sign and return a copy of this letter to
undersigned, whereupon it shall be a binding agreement between us.
Very truly yours,
L.S. Holding Company
By: /s/ William C. Hartman
-----------------------
Title: President
-----------------------
Agreed and Acknowledged:
Kaiser-Francis Oil Company
By: /s/ Gary R. Christopher
------------------------
October 9, 1996
Title: Acquisitions Coordinator
Exhibit (e)
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
August 24, 1993 between L.S. Holding Company, a Delaware corporation ("LSH"),
and PetroCorp Incorporated, a Texas corporation (the "Company"), evidences the
following:
WHEREAS, the Company is considering an initial public offering of its
common stock;
WHEREAS, in connection therewith the Company is entering into a
Simplification Agreement (the "Simplification Agreement") by and among Park
Avenue Exploration Corporation, L.S. Holding Company, PetroCorp Incorporated,
PetroCorp, PetroPartners Limited Partnership, Lealon L. Sargent, W. Neil
McBean, Don A. Turkleson, Michael L. Lord, Anthony F. Pelletier, David G.
Campbell, Fletcher S. Hicks, Craig K. Townsend, Clifford G. Zwahlen, William
M. Middleton, Melody B. Stiles, Carol C. Cook and Charles L. Zorio, dated as
of August 24, 1993 as to which agreement USF&G Corporation and CIGNA
Corporation have joined for limited purposes;
WHEREAS, in order to insure that it will have liquidity in the future,
LSH wishes to have certain registration rights and the Company wishes to grant
those rights;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto, intending to be legally bound,
hereby
agree as follows:
1. DEFINITIONS.
"Affiliate" means any Person controlling, controlled by or under common
control with LSH.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
"Common Stock" means the common stock, par value $.01 per share, of the
Company.
"Demand Registration" has the meaning set forth in Section 2(a) hereof.
"Demand Request" has the meaning set forth in Section 2(a) hereof.
"Effective Date" means the date of the initial closing of the IPO.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means LSH and, if applicable, a transferee of Registrable
Securities directly or indirectly (in a chain of title) from LSH to whom the
right to cause a Demand Registration under Section 2 has been expressly
assigned
in writing directly or indirectly (in a chain of title from Holder) in
accordance
with Section 12 hereof.
"Indemnified Party" has the meaning set forth in Section 7(c) hereof.
"Indemnifying Party" has the meaning set forth in Section 7(c) hereof.
"Inspectors" has the meaning set forth in Section 5(j) hereof.
"IPO" means the sale of Common Stock in the initial public offering of
Common Stock as contemplated by the Simplification Agreement.
"Material Adverse Effect" has the meaning set forth in Section 2(d)
hereof.
"Person" means any natural person, corporation, limited partnership,
general partnership, joint stock company, joint venture, association, company,
trust, bank, trust company, land trust, business trust or other organization,
whether or not a legal entity, and any government or agency or political
subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section 3(a)
hereof.
"Piggyback Securities" means all securities of the Company, including
Registrable Securities, entitled to be included in a Piggyback Registration
whether pursuant to this Agreement or otherwise.
"Registrable Securities" means any Common Stock received by LSH in the
transactions contemplated by the Simplification Agreement, (including, without
limitation the reclassification of the Series A-1, A-2, B. C and D Common
Stock of the Company into Common Stock), and any other securities issued or
issuable by the Company with respect to such Common Stock by way of a stock
dividend or other distribution or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or
reorganization.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933 as amended.
"Termination Date" has the meaning set forth in Section 2(a) hereof.
"Underwriter" means a securities dealer which purchases (as principal and
not as part of such dealer's market-making activities) any Registrable
Securities from the Company or from a Holder.
2. DEMAND REGISTRATION.
(a) Request for Registration.
(i) From and after the date hereof until such date as the
Holder may sell pursuant to Rule 144 promulgated under the Securities Act all
Registrable Securities then held by Holder in a three-month period (the
"Termination Date"), the Holder may make a written request of the Company (a
"Demand Request") for registration under the Securities Act (a "Demand
Registration") of all or part of its Registrable Securities;
(ii) The Demand Request shall specify the number of shares
of Registrable Securities proposed to be sold. The Company shall file a
registration statement for the Demand Registration within 45 days after
receiving a Demand Request and shall use its best efforts to cause the same to
be declared effective by the SEC as promptly as practicable after such filing.
(iii) The Company shall not be obligated to file any
registration statement pursuant to this Section 2(a), or, in the case of a
nonunderwritten offering only, file any amendment or supplement thereto, at
any time when the Company, in the reasonable and good faith judgment of its
Board of Directors, believes that the filing thereof at the time requested, or
the offering of shares of Common Stock pursuant thereto, (x) would materially
adversely affect a pending or proposed public offering of the Company's
securities which has been authorized by the Company's Board of Directors prior
to the date of a Demand Request, or a material acquisition, merger,
recapitalization, consolidation, reorganization or similar transaction or
negotiations, discussions or pending proposals with respect thereto or (y)
would materially adversely affect the business, financial condition or
prospects of the Company in view of the disclosures which may be required or
advisable thereby; provided, however, that the right of the Company to deny
registration under this paragraph may be exercised on only one occasion within
any 360-day period and in no event may delay the filing of a registration
statement by more than 90 days or the filing of a supplement or amendment by
more than 60 days. The filing of a registration statement, or any amendment or
supplement thereto, by the Company may not be deferred pursuant to clause (y)
above for more than 30 days after the abandonment or consummation of any of
the proposals or transactions set forth therein. The filing of a registration
statement, or any amendment or supplement thereto, by the Company may not be
deferred pursuant to clause (a) above for more than 5 days beyond tile first
to occur of (A) the date on which the Company is next obligated to file a
report under the Securities Exchange Act of 1934, disclosing such information
or (B) the date such information is disclosed to the public. In the event the
Company does not file an amendment or supplement under this paragraph (iii) of
this Section 2(a), such registration shall not constitute a Demand
Registration hereunder, and, if applicable, the Company will refund costs paid
by the Holder in connection with such registration.
(b) EFFECTIVE REGISTRATION AND EXPENSES: NUMBER OF DEMAND
REGISTRATIONS. A registration will not count as a Demand Registration until it
has become effective, provided that if, after it has become effective, an
offering of Registrable Securities pursuant to a registration is interfered
with by any stop order, injunction or other order or requirement of the SEC or
other governmental agency or court, such registration will be deemed not to
have been effected unless the stop order, injunction or other order is the
result of an untrue statement or omission based upon information furnished in
writing to the Company by the Holder expressly for use in a prospectus or
registration statement. The Holder shall be entitled to an unlimited number of
Demand Registrations but shall be subject to the provisions of Section 6
hereof relating to expenses for more than one Demand Registration. The
registration being effected in connection with the IPO shall not constitute a
Demand Registration by the Holder.
(c) SELECTION OF UNDERWRITERS. If the Holder informs the Company
that it wishes a registration effected pursuant to this Section 2 to be an
underwritten offering, the Holder shall select the book-running managing
Underwriter (which must be a nationally recognized underwriter reasonably
acceptable to the Company) and such additional Underwriters (selected by the
Holder but reasonably acceptable to the Company) if any, to be used in
connection with the offering.
(d) PRIORITY ON DEMAND REGISTRATIONS. No securities to be sold for
the account of any Person (including the Company) other than the Holder shall
be included in a Demand Registration if the managing Underwriter or
Underwriters shall advise the Holder that the inclusion of such securities
will adversely affect the price or success of the offering (a "Material
Adverse Effect").
3. PIGGYBACK REGISTRATION.
(a) RIGHT TO PIGGYBACK REGISTRATIONS. If, at any time prior to the
Termination Date, the Company proposes to file a registration statement under
the Securities Act with respect to an offering of any equity securities by the
Company for its own account or for the account of any of its equity holders
(other than (i) a registration statement on Form S-4 or S-8 or any substitute
form that may be adopted by the SEC or (ii) any registration statement filed
in connection with an exchange offer solely to the Company's existing security
holders or a merger or other combination involving the Company), then the
Company shall in each such case give written notice of such proposed filing to
the Holder as soon as practicable (but in no event less than 30 days before
the anticipated effective date of such registration statement), and in such
notice the Company shall offer to register such number of Registrable
Securities as the Holder may request (a "Piggyback Registration"). Subject to
Section 3(b) hereof, the Company shall include in each such Piggyback
Registration all Registrable Securities requested to be included in the
registration for such offering by written request of the Holder made within 15
days after the Holder's receipt of the Company's notice of the registration.
If at any time after giving notice of in proposal to register securities as
provided above in this Section 3 (a) and prior to the effective date of any
registration statement with respect to such securities, the Company shall
determine for any reason not to register such securities the Company may, in
its discretion, give notice of such determination to the Holder and thereupon
shall have no obligation to register any Registrable Securities in connection
with such registration.
(b) INCLUSION OF PIGGYBACK SECURITIES. If the registration of which
the Company gives notice is for a registered public offering involving an
underwriting, the Company will so advise the Holder as a part of the written
notice given pursuant to Section 3(a) hereof. In such event, the Company shall
use its commercially reasonable best efforts to cause the managing Underwriter
or Underwriters of a proposed underwritten offering to permit the Registrable
Securities and any other Piggyback Securities of the Holder requested to be
included in the registration statement for such offering under Section 3(a)
hereof to be included on the same terms and conditions as any similar
securities included therein. Notwithstanding the foregoing, the Company shall
not be required to include the Holder's Piggyback Securities in such offering
unless the Holder accepts the terms of the underwriting agreement between the
Company and the managing Underwriter or Underwriters and otherwise complies
with the provisions of Section 8 hereof. If the managing Underwriter or
Underwriters of a proposed underwritten offering advise the Company in writing
that in their opinion the total amount of securities, including Piggyback
Securities, to be included in such offering is sufficiently large to cause a
Material Adverse Effect, then in such event the securities to be included in
such offering shall be allocated first to the Company or the holder or holders
initiating such request for registration, as appropriate, and then, to the
extent that any additional securities can, in the reasonable opinion of such
managing Underwriter or Underwriters, be sold without any such Material
Adverse Effect, pro rata among the holders of Piggyback Securities on the
basis of the number of shares of Piggyback Securities requested to be included
in such registration by each such holder.
4. HOLDBACK AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALE BY HOLDER OF REGISTRABLE
SECURITIES. If the Holder's Registrable Securities are included in a
registration statement pursuant hereto, the Holder agrees not to effect any
public sale or distribution of the issue being registered or of any securities
convertible into or exchangeable or exercisable for such securities, including
a sale pursuant to Rule 144 under the Securities Act, during the 14 days prior
to, and during the 90 day period beginning on, the effective date of a
registration statement filed pursuant hereto except as part of such
registration, if and to the extent reasonably requested by the Company in the
case of a nonunderwritten public offering other than an offering on Form S-8
or any substitute form that may be adopted by the SEC or if and to the extent
reasonably requested by the managing Underwriter or Underwriters in the case
of an underwritten public offering. The Holder also agrees not to elect any
public sale or distribution of the issue being registered or of any securities
convertible into or exchangeable or exercisable for such securities, including
a sale pursuant to Rule 144 under the Securities Act, during the 14 days prior
to, and during the 90-day period beginning on, the effective date of a
registration statement filed pursuant to a demand registration (a "Park Avenue
Demand Registration") under the registration rights agreement between the
Company and Park Avenue Exploration Corporation described in Section 13 hereof
(the "Park Avenue Registration Agreement") except as part of such
registration, if and to the extent reasonably requested by the Company or Park
Avenue Exploration Corporation in the case of a nonunderwritten public
offering or if and to the extent reasonably requested by the managing
Underwriter or Underwriters in the case of an underwritten public offering.
(b) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY AND OTHERS. During
the 14 days prior to, and during the 90-day period beginning on, the effective
date of any registration statement which includes Registrable Securities, the
Company agrees not to effect any public sale or distribution (including by
registering securities held by others) of any securities the same as or
similar to those being registered by such registration statement, or any
securities convertible into or exchangeable or exercisable for such
securities, unless such sale or distribution is pursuant to such registration
statement or to a registration statement filed pursuant to a Park Avenue
Demand Registration as to which the Holder has not requested Park Avenue to
refrain from effecting a public sale as provided in Section 4(a) of the Park
Avenue Registration Agreement.
5. REGISTRATION PROCEDURES. Whenever the Holder has requested that any
Registrable Securities be registered pursuant to Section 2 hereof, the Company
will, at its expense (but subject to Section 6 hereof), use its commercially
reasonable best efforts to effect the registration and the sale of such
Registrable Securities under the Securities Act in accordance with the
intended method of disposition thereof as quickly as practicable, and in
connection with any such request the Company will as expeditiously as
practicable:
(a) prepare and file with the SEC a registration statement on any
form for which the Company then qualifies or which counsel for the Company
shall deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and use its commercially reasonable
best efforts and proceed diligently and in good faith to cause such filed
registration statement to become effective under the Securities Act; provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to the Holder and its counsel
copies of all such documents proposed to be filed, which documents will be
subject to the review of such counsel; provided, that in connection with a
Demand Registration, the Company shall not file any registration statement or
prospectus, or any amendments or supplements thereto, if the Holder, its
counsel, or the managing Underwriters shall reasonably object, in writing, on
a timely basis that such registration statement, prospectus, amendments or
supplements do not comply in all material respects with the requirements of
the Securities Act and the rules and regulations thereunder or any other
applicable rule or regulation;
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective pursuant to
Section 2, for a period (except as provided in the last paragraph of this
Section 5) of not less than 270 consecutive days or, if shorter, the period
terminating when all Registrable Securities covered by such registration
statement have been sold (but not before the expiration of the applicable
period referred to in Section 4(3) of the Securities Act and Rule 174
thereunder, if applicable) and comply with the provisions of 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 Holder set forth in such registration statement;
(c) furnish to the Holder and any underwriter such number of copies
of such registration statement, each amendment and supplement thereto (in each
case including all exhibits thereto), the prospectus included in such
registration statement (including each preliminary prospectus) and such other
documents as the Holder may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by the Holder; the Company
consents to the use of any such prospectus or any amendment or supplement
thereto by the Holder and any underwriters in connection with the offering and
sale of the Registrable Securities covered by such prospectus or any amendment
or supplement thereto that is in accordance with the intended methods of
distribution set forth in such prospectus;
(d) notify the Holder promptly, and (if requested by the Holder)
confirm such notice in writing, (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed and, with respect to a
registration statement or any post-effective amendment, when the same has
become effective under the Securities Act and each applicable state law, (ii)
of any request by the SEC or any other Federal or state governmental authority
for amendments or supplements to a registration statement or related
prospectus or for additional information, (iii) of the issuance by the SEC of
any stop order suspending the effectiveness of a registration statement or the
initiation of any proceedings for that purpose, (iv) if at any time the
representations or warranties of the Company or any Subsidiary contained in
any agreement (including any underwriting agreement) contemplated by paragraph
(i) of this Section 5 cease to be true and correct in any material respect,
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (vi) of the happening of any
event which makes any statement made in such registration statement or related
prospectus or any document incorporated or deemed to be incorporated therein
by reference untrue in any material respect or that requires the making of any
changes in such registration statement, prospectus or documents so that, in
the case of the registration statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the prospectus, it will not contain any untrue statement
of a material fact or omit to state any material act required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (vii) of the
Company's reasonable determination that a post-effective amendment to a
registration statement would be appropriate;
(e) use its commercially reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of a registration
statement or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment;
(f) cooperate with the Holder and the managing Underwriter or
Underwriters to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, which certificates shall not
bear any restrictive legends and shall be in a form eligible for deposit with
The Depositary Trust Company; and enable such Registrable Securities to be
registered in such names as the managing Underwriter or Underwriters may
request at least two business days prior to any sale of Registrable
Securities;
(g) use its commercially reasonable best efforts to register or
qualify such Registrable Securities as promptly as practicable under such
other securities or blue sky laws of such jurisdictions in the United States
and its possessions and territories as the Holder or managing Underwriter
reasonably (in light of the intended plan of distribution) requests and do any
and all other acts and things which may be reasonably necessary or advisable
to enable the Holder or managing Underwriter to consummate the disposition in
such jurisdictions of the Registrable Securities owned by the Holder, 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 paragraph (g), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
(h) use its commercially reasonable best efforts to cause such
Registrable Securities 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 Holder thereof to
consummate the disposition of such Registrable Securities;
(i) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such
Registrable Securities;
(j) make available for inspection by the Holder of such Registrable
Securities, any Underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other professional
retained by the Holder or Underwriter (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of
the Company as shall be reasonably necessary to enable them to exercise their
duediligence responsibility, and cause the Company's officer, directors and
employees to supply all information reasonably requested by any such
Inspectors in connection with such registration statement;
(k) use its commercially reasonable best effort to obtain a comfort
letter or comfort letters from the Company's independent public accountants in
customary form and covering such matters of the type customarily covered by
comfort letters as the Holder or the managing Underwriter or Underwriters
reasonably requests and, use its best efforts to furnish an opinion, dated as
of the closing date of the offering of the securities, of the counsel
representing the Company for purposes of such registration, addressed to the
Underwriters, if any, and to the Holder, covering such matters as the managing
Underwriter or Underwriters, if any, and Holder may reasonably request;
(l) otherwise use its commercially reasonable best efforts to
comply with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering a period of twelve months, beginning within three
months after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act;
(m) use its commercially reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed or quoted on any
inter-dealer quotation system on which similar securities issued by the
Company are then quoted;
(n) if any event contemplated by clause (vi) of paragraph (d) of
this Section 5 shall occur, promptly prepare a supplement or amendment or
post-effective amendment to such registration statement or the related
prospectus or any document incorporated therein by reference or promptly file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
(o) cooperate and assist in any filings required to be made with
the National Association of Securities Dealers, Inc.
The Company may require the Holder to promptly furnish in writing to
the Company such information regarding the distribution of the Registrable
Securities as it may from time to time reasonably request and such other
information as may be legally required in connection with such registration.
The Company shall have the right to exclude from any offering the Registrable
Securities of the Holder if it does not comply with the provisions of the
immediately preceding sentence in which event such offering shall not
constitute the Demand Registration referred to in the first sentence of
Section 6 hereof if the Holder reimburses the Company for its out-of-pocket
expenses in connection therewith and such Demand Registration was otherwise to
have constituted such Demand Registration so referred to in Section 6 hereof.
The Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in clause (vi) of
paragraph (d) of this Section 5, the Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until the Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by clause (vi) of
paragraph (d) of this Section, and, if so directed by the Company, the Holder
will deliver to the Company all copies, other than permanent file copies, then
in the Holder's possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event the
Company shall give such notice, the Company shall extend the period during
which such registration statement shall be maintained effective (including the
period referred to in paragraph (b) of this Section 5 by the number of days
during the period from and including the date of the giving of notice pursuant
to clause (vi) of paragraph (d) of this Section to the date when the Company
shall make available to the Holder of Registrable Securities covered by such
registration statement a prospectus supplemented or amended to conform with
the requirement of clause (vi) of paragraph (d) of this Section 5.
6. REGISTRATION EXPENSES. In connection with any registration statement
required to be filed hereunder pursuant to one Demand Registration and each
Piggyback Registration, the Company shall pay all of the following
registration expenses: (a) internal expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), (b) to the extent not already incurred, the fees and
expenses incurred in connection with the listing on an exchange of the
Registrable Security if the Company shall choose, or be required pursuant to
paragraph (m) of Section 5 hereof, to list such Registrable Securities, (c)
all registration and filing fees (including, without limitation, with respect
to filings to be made with the National Association of Securities Dealers
Inc.), (d) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Registrable Securities), (e) printing expenses
and engraving expenses, (f) reasonable fees and disbursements of counsel to
the Company (which shall be selected by the Company, but be reasonably
acceptable to the Holder) and customary fees and expenses for independent
certified public accountants and reserve engineers retained by the Company
(including the expenses of any comfort letters requested pursuant to paragraph
(k) of Section 5 hereof (g) the reasonable fees and expenses of any special
experts retained by the Company and reasonably acceptable to the Holder in
connection with such registration, (h) reasonable fees and expenses of one
counsel to the Holder reasonably acceptable to the Company selected by the
Holder (provided that in a Piggyback Registration one counsel shall serve for
all participating holders of Piggyback Securities included in such
Registration), and (i) fees and expenses of any "qualified independent
underwrites or other independent appraiser participating in an offering
pursuant to Section 3 of Schedule E to the bylaws of the National Association
of Securities Dealers, Inc., and (j) any other expenses incident to such
registration statement and offering, except as set forth below in this
Section 6. The Company shall not have any obligation to pay (x) any
underwriting fees, discounts, or commissions attributable to the sale of
Registrable Securities or (y) any out-of-pocket expenses of the Holder except
as provided in clauses (d), (h), and (i) of this Section 6. After the
completion of one Demand Registration, if the Holder shall exercise any
additional Demand Registration, the Holder shall be responsible for the items
described in clauses (b) through (j) of this Section 6. The Company will use
its commercially reasonable best efforts to minimize any costs and expenses
incurred by the Holder hereunder.
7. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Holder, each Person, if any, who controls the Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and the officers, directors, agents, general and limited
partners, accounts under management (if applicable) and employees of the
Holder and each such controlling person from and against any and all losses,
claims, damages, liabilities, and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Securities or in any amendment or
supplement hereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities, or
expenses arise out of, or are based upon, any such untrue statement or
omission or allegation thereof based upon information furnished in writing to
the Company by the Holder or on the Holder's behalf expressly for use therein;
provided, however, that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus, the
indemnity agreement contained in this paragraph shall not apply to the extent
that any such loss, claims damage, liability or expense results from the fact
that a current copy of the prospectus was not sent or given to the Persons
asserting any such loss, claim, damage, liability or expense at or prior to
the written confirmation of the sale of the Registrable Securities concerned
if it is determined that (i) it was the responsibility of the Holder or any
Underwriter or dealer for the Holder to provide such Person with a current
copy of the prospectus, (ii) the Holder was provided with a current copy of
the prospectus prior to the written confirmation of sale and (iii) such
current copy of the prospectus would have cured the defect giving rise to such
loss, claim, damage, liability or expense. The Company also agrees to
indemnify any Underwriters of the Registrable Securities, their officers and
directors and each Person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Holder provided in this
Section 7(a).
(b) INDEMNIFICATION OF HOLDER OF REGISTRABLE SECURITIES. The Holder
agrees to indemnify and hold harmless the Company, and each Person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and the officers, directors,
agents and employees of the Company and each such controlling Person to the
same extent as the foregoing indemnity from the Company to the Holder, but
only with respect to information furnished in writing by the Holder or on the
Holder's behalf expressly for use in any registration statement or prospectus
relating to the Registrable Securities. The liability of the Holder under this
Section 7(b) shall be limited to the aggregate cash and property received by
the Holder pursuant to the sale of Registrable Securities covered by such
registration statement or prospectus.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any Person entitled to indemnification under Sections 7(a) or
7(b) hereof (an Indemnified Party in respect of which indemnity may be sought
from any party who has agreed to provide such indemnification under Sections
7(a) or 7(b) hereof (an "Indemnifying Party"), the Indemnified Party shall
give prompt notice to the Indemnifying Party and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party, and shall assume the payment of all
reasonable expenses of such defense. In the event such defense is assumed by
the Indemnifying Party, it shall have the right to assume control of such
defense and the Indemnified Party shall cooperate with all reasonable requests
of the Indemnifying Party in connection with such defense. Such Indemnified
Party shall have the right to employ separate counsel in any such action or
proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Parer
unless (i) the Indemnifying Party has agreed to pay such fees and expenses or
(ii) the Indemnifying Party fails promptly to assume the defense of such
action or proceeding or fails to employ counsel reasonably satisfactory to
such Indemnified Party or (iii) the named parties to any such action or
proceeding (including any impleaded parties) include both such Indemnified
Party and Indemnifying Party (or an Affiliate of the Indemnifying Party), and
such Indemnified Party shall have reasonably concluded that there may be
defenses available to it that are different from or additional to those
available to the Indemnifying Party and such Indemnified Party shall have been
advised by its counsel that representation of such Indemnified Party and any
Indemnifying Party by the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential differing interests
between them. The Indemnifying Party shall not be liable or any settlement of
any such action or proceeding effected without its written consent (which
consent will not be unreasonably withheld), but if settled with its written
consent, or if there be a final judgment for the plaintiff in any such action
or proceeding, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Party from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. The Indemnifying Party shall
not consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release, in form and substance
satisfactory to the Indemnified Party, from all liability in respect of such
action or proceeding for which such Indemnified Party would be entitled to
indemnification hereunder.
(d) CONTRIBUTION.
(i) If the indemnification provided for in this Section 7
is unavailable to the Indemnified Parties in respect of any losses, claims,
damages, liabilities or judgments referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities and judgments as between the
Company on the one hand and the Holder on the other, in such proportion as is
appropriate to reflect the relative fault of the Company and of the Holder in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand
and of the Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by such party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(ii) The Company and the Holder agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) 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
immediately preceding paragraph. The amount paid or payable by an Indemnified
Parties as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection wide investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7(d), the Holder shall not be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities of the Holder were offered to the public exceeds the amount of any
damages which the Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. The Holder may not
participate in any underwritten registration under Section 3 hereof unless the
Holder (a) agrees to sell the Holder's Registrable Securities being
registered on the basis provided in any underwriting arrangements approved by
the Person entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable indemnities, questionnaires, powers of attorney,
underwriting agreements and other document reasonably required under the terms
of such underwriting arrangements and this Agreement.
9. EFFECTIVENESS AND TERMINATION. This Agreement shall become
effective, and shall be binding on the parties hereto, from and after the
Effective Date. This Agreement shall terminate prior to becoming effective
upon the abandonment of the IPO prior to the consummation thereof.
10. AMENDMENT. Any provision of this Agreement may be altered,
supplemented, amended or waived by the written consent of the Company and the
Holder.
11. SPECIFIC PERFORMANCE. The parties hereto and the Company recognize
that the obligations imposed on them in this Agreement are special, unique and
of extraordinary character, and that in the event of breach by any party
damages will be an insufficient remedy; consequently, it is agreed that the
parties hereto and the Company may have specific performance and injunctive
relief (in addition to damages) as a remedy for the enforcement hereof,
without proving damages.
12. ASSIGNMENT. The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the successors and assigns of the
Company and the Holder. The Holder may assign its rights hereunder to one or
more Affiliates of Holder all of whom must agree to act in concert with
respect to all matters under this Agreement. The Holder may assign its right
to any non-affiliate only if it is in connection with the assignment or the
sale of all its Registrable Securities to one transferee and such transferee
agrees to be bound by the terms hereunder.
13. NO INCONSISTENT AGREEMENTS. The Company agrees not to enter into
any agreement inconsistent with the terms of this Agreement the Company may
not grant to subsequent Persons demand rights of registration upon request
(such as those provided in Section 2 hereof) unless Holder is given an
enforceable contractual right to participate in registrations requested by
such subsequent investors (but subject to the right of priority of
registration for such subsequent Persons), such participation to be on the pro
rata basis. The Company and the Holder acknowledge that simultaneously with
the execution of this Agreement, the Company has entered into a registration
rights agreement with Park Avenue Exploration Corporation on terms
substantially similar to those of this Agreement.
14. NOTICES. Any and all notices, designations, consents, offers,
acceptances, or other communications provided for herein (each a "Notice")
shall be given in writing by overnight courier, telegram, or telecopy which
shall be addressed, or sent, to the respective addresses as follows (or such
other address as the Company or any party hereto may specify to the Company
and all other parties by Notice):
The Company:
PetroCorp Incorporated
16800 Greenspoint Park Drive
Suite 300, North Atrium
Houston, Texas 77060
Telecopy No.: (713) 875-5080
Attention: Don A. Turkelson
with a copy to:
Mayor, Day, Caldwell & Keeton, L.L.P.
Suite 1900 NationsBank
700 Louisiana
Houston, Tens 77002
Telecopy No.: (713) 225-7047
Attention: Gary J. Winston
The Holder:
L.S. Holding Company
One Beaver Valley Road
Wilmington, Delaware 19850
Attention: Secretary
Telephone: (302) 479-6800
Fax: (302) 479-6618
with a copy to:
CIGNA Investments, Inc.
S-307
900 Cottage Grove Road
Bloomfield, Connecticut 06002
Attention: James W. Spann
Telephone: (203) 726-8632
Fax: (203) 726-203
and with a copy to:
CIGNA Companies
S-215
900 Cottage Grove Road
Bloomfield, Connecticut 06002
Attention: Investment Law Department
Telephone: (203) 726-8908
Fax: (203) 726-8885
All Notices shall be deemed effective and received (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified above and
receipt thereof is confirmed; (b) if given by overnight courier, on the
business day immediately following the day on which such Notice is delivered
to a reputable overnight courier service; or (c) if given by telegram, when
such Notice is delivered at the address specified above.
15. COUNTERPARTS. This Agreement may be executed in to or more
counterparts and each counterpart shall be deemed to be an original and which
counterparts together shall constitute one and the same agreement of the
parties hereto.
16. SECTION HEADINGS. Headings contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit or extend the
scope or intent of this Agreement or any provisions hereof.
17. CHOICE OF LAW. This Agreement shall be governed by the internal laws
of the State of Delaware without regard to the principles of conflicts of laws
thereof.
18. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties hereto respecting the subject matter hereof and supersedes all
prior agreement discussions and understandings with respect thereto.
19. CUMULATIVE RIGHTS. The rights of the parties and the Company under
this Agreement are cumulative and in addition to all similar and other rights
of
the parties under other agreements.
20. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PETROCORP INCORPORATED
/s/ Don A. Turkelson
By: ----------------------
Name: Don A. Turkelson
----------------------
Title: Vice President
-------------------------
L.S. HOLDING COMPANY
/s/ William C. Hartman
By: ------------------------
Name: William C. Hartman
------------------------
Title: President
------------------------
