GOODRICH PETROLEUM CORP, 10-Q, 1995-11-14

GOODRICH PETROLEUM CORP
10-Q, 1995-11-14

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<PAGE> 1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT 1934

For the quarterly period ended September 30, 1995
-----------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT 1934

For the transition period from to
------------------- -------------------------
(Amended by Exch Act Rel No. 312905. eff 4/26/93.)

Commission File Number: 33-58831
------------------------------------------------------

GOODRICH PETROLEUM CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE 76-466913
- ---------------------------------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer ID. No.)

5847 SAN FELIPE, SUITE 700, HOUSTON, TEXAS 77057
- ---------------------------------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

</TABLE>

(713) 780-9494
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)

NONE
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [ ] Yes [ X ] No

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

Common shares outstanding as of November 6, 1995: 41,804,510

1
<PAGE> 2
GOODRICH PETROLEUM CORPORATION
FORM 10-Q
SEPTEMBER 30, 1995
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART 1 - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Consolidated Balance Sheets
September 30, 1995 (Unaudited) and December 31, 1994 . . . . . . . . . . . . . . 3

Consolidated Statements of Operations
Nine Months Ended September 30, 1995 and 1994 (Unaudited) . . . . . . . . . . . 5

Consolidated Statements of Operations
Three Months Ended September 30, 1995 and 1994 (Unaudited) . . . . . . . . . . . 6

Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1995 and 1994 (Unaudited) . . . . . . . . . . . 7

Consolidated Statements of Stockholders' Equity
Nine Months Ended September 30, 1995 and 1994 (Unaudited) . . . . . . . . . . . 8

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . 9

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. 15

PART II - OTHER INFORMATION 21
</TABLE>

ITEM 1. LEGAL PROCEEDINGS.

ITEM 2. CHANGES IN SECURITIES.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

ITEM 5. OTHER INFORMATION.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

2
<PAGE> 3
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets

<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------------ ------------------
(Unaudited)
<S> <C> <C>
ASSETS

CURRENT ASSETS
Cash and cash equivalents . . . . . . . . . . . . . $ 182,257 $ 710,762
Marketable securities . . . . . . . . . . . . . . . 844,000 ---
Accounts receivable
Trade and other . . . . . . . . . . . . . . . . . 170,379 ---
Accrued oil and gas revenue . . . . . . . . . . . 962,061 934,910
Prepaid expenses and other . . . . . . . . . . . . . 282,279 ---
------------------ ------------------
Total current assets . . . . . . . . . . . . . 2,440,976 1,645,672
------------------ ------------------

PROPERTY AND EQUIPMENT
Oil and gas properties . . . . . . . . . . . . . . . 20,000,526 7,271,549
Furniture, fixtures and equipment . . . . . . . . . 100,000 ---
------------------ ------------------
20,100,526 7,271,549
Less accumulated depletion and depreciation . . . . (2,151,979) (1,309,866)
------------------ ------------------
Total property & equipment . . . . . . . . . . 17,948,547 5,961,683
------------------ ------------------

OTHER ASSETS
Investment in pipeline joint venture . . . . . . . . 5,207,872 ---
Deferred charges . . . . . . . . . . . . . . . . . . 125,011 623,141
------------------ ------------------
5,332,883 623,141
------------------ ------------------

TOTAL ASSETS . . . . . . . . . . . . . . $ 25,722,406 $ 8,230,496
================== ==================

</TABLE>

See notes to consolidated financial statements.

3
<PAGE> 4
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)

<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------------ ------------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Current portion of long term debt . . . . . . . . . $ --- $ 1,816,723
Accounts payable . . . . . . . . . . . . . . . . . . 345,271 135,916
Accrued liabilities . . . . . . . . . . . . . . . . 814,688 109,074
Reserve for contingent liabilities . . . . . . . . . 718,080 ---
------------------ ------------------
Total current liabilities . . . . . . . . . . 1,878,039 2,061,713
------------------ ------------------

LONG TERM DEBT . . . . . . . . . . . . . . . . . . . . 11,000,000 8,250,000

OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . . 610,471 ---

STOCKHOLDERS' EQUITY (DEFICIT)
Partners' capital (deficit) . . . . . . . . . . . . --- (2,081,217)
Preferred stock, par value $1.00 per share;
authorized 10,000,000 shares; issued
1,098,710 in 1995 (liquidating pre-
ference $10 per share, aggregating to
$10,987,100) . . . . . . . . . . . . . . . . . 1,098,710 ---
Common stock, par value - $0.20 per share;
authorized 100,000,000 shares; issued
39,530,452 in 1995 . . . . . . . . . . . . . . 7,906,090 ---
Additional paid-in capital . . . . . . . . . . . . . 3,125,021 ---
Retained earnings . . . . . . . . . . . . . . . . . 19,675 ---
Unrealized gain on marketable securities . . . . . . 84,400 ---
------------------ ------------------
Total stockholders' equity (deficit) . . . . . 12,233,896 (2,081,217)
------------------ ------------------

TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY . . . . . . . . . . . . . . . . . $ 25,722,406 $ 8,230,496
================== ==================

</TABLE>

See notes to consolidated financial statements.

4
<PAGE> 5
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)

<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------------------
1995 1994
------------------ ------------------
<S> <C> <C>
OPERATING REVENUES
Oil and gas sales . . . . . . . . . . . . . . . . . $ 3,582,548 $ 3,623,149
Pipeline joint venture . . . . . . . . . . . . . . . 113,937 ---
------------------ ------------------
Total operating revenues . . . . . . . . . . . 3,696,485 3,623,149
------------------ ------------------

OPERATING EXPENSES
Lease operating expense and production taxes . . . . 534,819 484,696
Depletion, depreciation and amortization . . . . . . 969,646 758,740
General and administrative . . . . . . . . . . . . . 197,044 26,615
------------------ ------------------
Total operating expenses . . . . . . . . . . . 1,701,509 1,270,051
------------------ ------------------

OPERATING INCOME . . . . . . . . . . . . . . . . . . . . 1,994,976 2,353,098

OTHER INCOME (EXPENSE)
Interest Expense . . . . . . . . . . . . . . . . . . (900,767) (789,187)
Other, net . . . . . . . . . . . . . . . . . . . . 34,079 12,372
------------------ ------------------
Total other income (expense) . . . . . . . . . (866,688) (776,815)
------------------ ------------------
INCOME BEFORE EXTRAORDINARY ITEM
AND INCOME TAXES . . . . . . . . . . . . . . . 1,128,288 $ 1,576,283
==================
Income Taxes . . . . . . . . . . . . . . . . . . . . ---
------------------
INCOME BEFORE EXTRAORDINARY ITEM . . . . . . . . . . . . 1,128,288
Extraordinary item-early extinguishment of debt . . 482,906
------------------

NET INCOME . . . . . . . . . . . . . . . . . . . . $ 645,382

Preferred stock dividend . . . . . . . . . . . . . . 107,960
------------------
EARNINGS AVAILABLE TO COMMON STOCK . . . . . . . . . . . $ 537,422
==================

</TABLE>

See notes to consolidated financial statements.

5
<PAGE> 6
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended
September 30,
-----------------------------------------
1995 1994
------------------ ------------------
<S> <C> <C>
OPERATING REVENUES
Oil and gas sales . . . . . . . . . . . . . . . . . $ 1,414,410 1,632,382
Pipeline joint venture . . . . . . . . . . . . . . . 113,937 ---
------------------ ------------------
Total operating revenues . . . . . . . . . . . 1,528,347 1,632,382
------------------ ------------------

EXPENSES
Lease operating expenses and production taxes . . . 238,386 237,674
Depletion, depreciation and amortization . . . . . . 562,406 337,097
General and administrative . . . . . . . . . . . . . 193,737 8,823
------------------ ------------------
Total operating expenses . . . . . . . . . . . 994,529 583,594
------------------ ------------------

OPERATING INCOME . . . . . . . . . . . . . . . . . . . . 533,818 1,048,788

OTHER INCOME (EXPENSE)
Interest Expense . . . . . . . . . . . . . . . . . . (363,542) (305,209)
Other, net . . . . . . . . . . . . . . . . . . . . 21,177 5,404
------------------ ------------------
Total other income (expense) . . . . . . . . . (342,365) (299,805)
------------------ ------------------
INCOME BEFORE EXTRAORDINARY ITEM
AND INCOME TAXES . . . . . . . . . . . . . . . . . . 191,453 $ 748,983
==================
Income taxes . . . . . . . . . . . . . . . . . . . . ---
------------------
INCOME BEFORE EXTRAORDINARY ITEM . . . . . . . . . . . . 191,453
Extraordinary item-early extinguishment
of debt . . . . . . . . . . . . . . . . . . . 482,906
------------------

NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . $ (291,453)

Preferred stock dividend . . . . . . . . . . . . . . 107,960
------------------
LOSS AVAILABLE TO COMMON STOCK . . . . . . . . . . . . . $ (399,413)
==================

</TABLE>

See notes to consolidated financial statements.

6
<PAGE> 7
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)

<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------------------
1995 1994
------------------ ------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income. . . . . . . . . . . . . . . . . . . . . . $ 645,382 1,576,283
Adjustments to reconcile net income to
net cash provided by operating activities:
Depletion, depreciation and amortization . . . 969,646 758,740
Amortization of deferred debt financing costs 84,752 86,095
Extraordinary item-early extinguishment
of debt. . . . . . . . . . . . . . . . . 482,906 ---
Payment of contingent liability . . . . . . . (31,920) ---
Payment of other liabilities . . . . . . . . . (64,529) ---
(Increase) decrease in:
Accounts receivable . . . . . . . . . . 458,272 (524,006)
Prepaid expenses and other . . . . . . . (269,534) (40,772)
(Decrease) increase in
Accounts payable . . . . . . . . . . . . 181,728 (125,666)
Accrued liabilities . . . . . . . . . . 97,505 54,128
------------------ ------------------
Net cash provided by operating
activities. . . . . . . . . . . . 2,554,208 1,784,802
------------------ ------------------

INVESTING ACTIVITIES
Sale of investment . . . . . . . . . . . . . . . . . 9,600,000 ---
Cash paid in connection with business combination . . (1,088,432) ---
Overdraft bank balances assumed in business
combination . . . . . . . . . . . . . . . . . . . . (451,414) ---
Capital expenditures . . . . . . . . . . . . . . . . (18,350) (3,728,504)
------------------ ------------------
Net cash provided by (used in)
investing activities . . . . . . 8,041,804 (3,728,504)
------------------ ------------------

FINANCING ACTIVITIES
Proceeds from bank borrowings . . . . . . . . . . . . 21,000,000 5,719,933
Principal payments of bank borrowings . . . . . . . . (30,692,841) (1,119,643)
Partnership distributions . . . . . . . . . . . . . (1,132,735) (2,689,971)
Payment of debt financing costs . . . . . . . . . . (83,020) ---
Preferred stock dividend . . . . . . . . . . . . . . (215,921) ---
------------------ ------------------
Net cash provided by (used in)
financing activities . . . . . (11,124,517) 1,910,319
------------------ ------------------

NET DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . (528,505) (33,383)

CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . 710,762 752,138
------------------ ------------------

CASH AND CASH EQUIVALENTS AT
END OF PERIOD . . . . . . . . . . . . . . . . . . . . $ 182,257 $ 718,755
================== ==================
</TABLE>

See notes to consolidated financial statements.

7
<PAGE> 8
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
Nine Months Ended September 30 ,1995
(Unaudited)

<TABLE>
<CAPTION>
Preferred Stock
Partner's ---------------
Capital Number
(Deficit) of shares Par Value
-------- --------- ---------
<S> <C> <C> <C>
BALANCE AT JANUARY 1,1995 . . . . . . . . . . . . . . $ (2,081,217) --- ---
Partnership distributions . . . . . . . . . . . . . . (1,229,344) --- ---
Business Combination. . . . . . . . . . . . . . . . . 3,310,561 1,098,710 1,098,710
Unrealized appreciation of marketable . . . . . . . . --- --- ---
securities available for sale. . . . . . . . . .
Preferred stock dividend. . . . . . . . . . . . . . . --- --- ---
Net income. . . . . . . . . . . . . . . . . . . . . . --- --- ---
Adjustment to reflect net income
since business combination . . . . . . . . . . --- --- ---
--------------- ----------- ---------------
BALANCE AT SEPTEMBER 30, 1995 . . . . . . . . . . . . $ --- 1,098,710 $ 1,098,710
=============== =========== ===============

</TABLE>
<TABLE>
<CAPTION>

Common Stock
------------ Additional
Number Paid-In
of shares Par Value Capital
--------- --------- -------
<S> <C> <C> <C>
BALANCE AT JANUARY 1, 1995. . . . . . . . . . . . . . --- --- ---
Partnership distributions . . . . . . . . . . . . . . --- --- ---
Business Combination. . . . . . . . . . . . . . . . . 39,530,452 7,906,090 2,607,274
Unrealized appreciation of marketable --- --- ---
securities available for sale. . . . . . . . . .
Preferred stock dividend. . . . . . . . . . . . . . . --- --- ---
Net income. . . . . . . . . . . . . . . . . . . . . . --- --- ---
Adjustment to reflect net income --- --- 517,747
since business combination . . . . . . . . . .
------------- -------------- --------------
BALANCE AT SEPTEMBER 30, 1995 . . . . . . . . . . . . $ 39,530,452 $ 7,906,090 $ 3,125,021
============= ============== ==============

</TABLE>
<TABLE>
<CAPTION>
Unrealized
Gain on Total
Retained Marketable Stockholders'
Earnings Securities Equity (Deficit)
-------- ---------- ---------------
<S> <C> <C> <C>
BALANCE AT JANUARY 1,1995 . . . . . . . . . . . . . . --- --- $ (2,081,217)
Partnership distributions . . . . . . . . . . . . . . --- --- (1,229,344)
Business Combinatio . . . . . . . . . . . . . . . . . --- --- 14,922,635
Unrealized appreciation of marketable --- 84,400 84,400
securities available for sale . . . . . . . . .
Preferred stock dividend . . . . . . . . . . . . . . (107,960) --- (107,960)
Net income . . . . . . . . . . . . . . . . . . . . . 645,382 --- 645,382
Adjustment to reflect net income (517,747) --- ---
since business combination . . . . . . . . . .
---------------- --------------- -----------------
BALANCE AT SEPTEMBER 30, 1995 . . . . . . . . . . . . $ 19,675 $ 84,400 $ 12,233,896
================ =============== =================
</TABLE>

See notes to consolidated financial statements.

8
<PAGE> 9
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1995 and 1994

NOTE A - BUSINESS COMBINATION

On August 15, 1995, the transactions contemplated by the Agreement and Plan of
Merger among Patrick Petroleum Company ("Patrick"), La/Cal Energy Partners
("La/Cal"), Goodrich Petroleum Corporation (the "Company"), and Goodrich
Acquisition, Inc. were completed. The Agreement provided for a combination of
Patrick and La/Cal, as a result of which the businesses previously conducted by
Patrick and La/Cal are now conducted by the Company, which is a Delaware
corporation formed for the purpose of consummating such transactions, and its
subsidiaries. The combination of Patrick and La/Cal was effected primarily by
two concurrent transactions: (a) the contribution by La/Cal of all of its
assets and liabilities (excluding cash and accounts receivable accrued prior to
March 1, 1995, and interest thereon) to the Company in exchange for 19,765,226
shares of the Company's common stock (the "Common Stock") and (b) the merger of
Goodrich Acquisition with and into Patrick (the "Merger") whereby (i) each
outstanding share of Patrick common stock ("Patrick Common Stock") was
converted into one share of Common Stock; (ii) each outstanding share of
Patrick Series B Convertible Preferred Stock was converted into one share of
the Company's Series A Convertible Preferred Stock and (iii) Patrick, the
surviving corporation in the Merger, became a wholly-owned subsidiary of the
Company.

NOTE B - BASIS OF PRESENTATION

The combination transactions were accounted for as a purchase business
combination in accordance with Accounting Principles Board Statement No. 16,
Business Combinations whereby La/Cal was deemed to be the acquiror and Patrick
the acquiree. Accordingly, on August 15, 1995, the Company recorded the assets
and liabilities of Patrick at fair value, whereas the assets and liabilities of
La/Cal are reflected at historical book value. The consolidated financial
statements reflect the operations solely of La/Cal for periods prior to August
15, 1995, whereas such financial statements reflect the operations of the
combined entities for periods subsequent to August 15, 1995.

The consolidated financial statements presented here should be read in
connection with the audited financial statements included in Patrick's 1994
Annual Report on Form 10-K and La/Cal's 1994 and 1993 audited financial
statements and the condensed unaudited pro forma financial statements included
in the Company's Registration Statement on Form S-4 dated June 13, 1995 and
Current Report on Form 8-K/A as of August 15, 1995.

In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position of the
Company as of September 30, 1995 and the results of its operations for the nine
and three months ended September 30, 1995 and 1994.

9
<PAGE> 10
The results of operations for the nine and three month periods ended September
30, 1995 are not necessarily indicative of the results to be expected for the
full year and are significantly impacted by the accounting for the combination
transactions as discussed above.

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL - For a description of the accounting policies followed by La/Cal and
continued by the Company, refer to the notes to the La/Cal 1994 and 1993
financial statements included in the Company's Registration Statement on Form
S-4 dated June 13, 1995.

CASH AND CASH EQUIVALENTS - Cash and cash equivalents include cash on hand,
demand deposit accounts and temporary cash investments with maturities of
ninety days or less at date of purchase.

MARKETABLE SECURITIES - Under Statement of Financial Accounting Standards No.
115, the Company is required to segregate any debt and equity securities it
might hold into one of the following categories: trading, available-for-sale or
held- to-maturity. Trading securities and available-for-sale securities are
carried at their fair values. Changes in the fair values of trading securities
are recorded in the statement of operations. Changes in the fair value of
available- for-sale securities are recorded as a component of stockholders'
equity until such securities are sold. Held-to-maturity securities are
carried at cost adjusted for amortized premium or discount.

The Company has classified its marketable securities as "available-for-sale".

INVESTMENT IN PIPELINE JOINT VENTURE - Goodrich's investment consists of a 20%
interest in an intrastate natural gas pipeline joint venture. The Company'
carrying basis in the investment was established at August 15, 1995 (fair
value) and is being amortized on a straight line basis over the remaining term
of the joint venture which will terminate in 2001.

INCOME TAXES - The federal income tax effect of La/Cal's activities (prior to
August 15, 1995) was not reflected in the financial statements since such taxes
were the responsibility of the individual partners of La/Cal.

Goodrich follows the provisions of Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes which requires the liability method of
accounting for deferred income taxes. Deferred tax assets are subject to an
ongoing assessment of realizability. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.

EARNINGS PER SHARE - Earnings per share information has not been presented due
to the combined entities being in corporate form for only the 45 day period
from August 15, 1995 to September 30, 1995.

10
<PAGE> 11
NOTE D - PATRICK ASSETS AND LIABILITIES ACQUIRED

On August 15, 1995, the Company recorded the combination transactions which
effect was primarily the recording of the assets and liabilities of Patrick at
their fair value. Such amounts were as follows:

<TABLE>
<S> <C>
Cash overdraft $ (451,414)
Marketable securities 759,600
Accounts receivable 655,802
Prepaid expenses and other current assets 12,745
Investment in Penske Corporation 9,600,000
Investment in pipeline joint venture 5,321,913
Property and equipment 12,810,627
Accounts payable (27,627)
Accrued liabilities (716,070)
Reserve for contingent liabilities (750,000)
Long term debt (10,626,118)
Other liabilities (675,000)
-----------------
$ 15,914,458
=================
</TABLE>

NOTE E - SALE OF INVESTMENT IN PENSKE CORPORATION

On September 18, 1995, the Company received $9,600,000 cash as redemption of
its investment in the Penske Corporation. The proceeds were used to pay down
the company's long term debt along with related accrued interest. No gain or
loss resulted from the transaction.

NOTE F - LONG TERM DEBT

Long term debt recorded on the December 31, 1994 balance sheet represented
La/Cal's 10% Senior Secured General Obligation Notes ("the General Obligation
Notes"). This debt was paid off in connection with the business combination.

The Company has a credit facility with a bank which provides for a total
borrowing base determined by the bank every six months in part, based on the
Company's oil and gas reserve information. Any and all amounts drawn are due
and payable on June 1, 1997. Interest on related borrowings is based on either
of two methods at the option of the Company: the bank's prime lending rate or
LIBOR plus 2%. Interest rates are set on specific draws for one, two, three or
six month periods, also at the option of the Company.

The original borrowing base of $22,000,000 was reduced to $15,000,000 after the
sale of the Company's investment in the Penske Corporation (see Note E above),
in accordance with the specific provisions of the credit facility. The amount
drawn by the Company as of September 30, 1995 was $11,000,000.

11
<PAGE> 12
The credit facility requires minimum net worth and debt service ratios be
maintained by the Company. Accordingly, the Company had $1,233,896 available
for the payment of dividends at September 30, 1995.

Substantially all of the Company's assets are pledged to secure this credit
facility.

NOTE G - EXTRAORDINARY ITEM-EARLY EXTINGUISHMENT OF DEBT

La/Cal's General Obligation Notes were paid off in connection with the business
combination and the related unamortized debt financing costs in the amount of
$482,906 were charged to operations as an extraordinary item, in the third
quarter of 1995.

NOTE H - PRO FORMA FINANCIAL INFORMATION

Selected results of operations on a pro forma basis as if the combination
transactions had occurred on January 1, 1995 and January 1, 1994, respectively,
are as follows:

<TABLE>
<CAPTION>
For the nine months ended
September 30,
-------------
1995 1994
---- ----
<S> <C> <C>
Revenues $ 7,089,300 $ 7,035,909
Income before extraordinary item 2,352,604 3,983,828
Net income 1,869,698 3,983,828
Income applicable to common stock 1,003,777 3,278,828
Income per share before extraordinary item .04 .08
Income per common share $ .03 $ .08
</TABLE>

(Note) The pro forma operations for the nine months ended September 30, 1995
contain a net gain on the sale of an investment which accounted for $1,563,762
of net income and $.04 income per share. The operations information for the
nine months ended September 30, 1994 contains a net gain on sale of investments
which accounted for $6,447,102 of net income and $.16 income per share. Also
the operations for the nine months ended September 30, 1994 has been adjusted
to eliminate operations related to certain oil and gas properties sold by
Patrick in December, 1994 in order to present comparable amounts.

NOTE I - COMMITMENTS AND CONTINGENCIES

The U.S. Environmental Protection Agency ("EPA") has identified the Company as
a potentially responsible party ("PRP") for the cost of clean-up of "hazardous
substances" at an oil field waste disposal site in Vermilion Parish, Louisiana.
The EPA has estimated that the total cost of long-term clean-up of the site
will be approximately $15.4 million with the Company's percentage of
responsibility to be approximately 3.09%. As of September 30, 1995, the
Company has paid approximately $115,000 in costs related to this matter and
accrued an additional $400,000 for the remaining liability. The EPA and PRPs
will continue to evaluate the site and revise estimates

12
<PAGE> 13
for the long-term clean-up of the site. There can be no assurance that the
cost of clean-up and the Company's percentage responsibility will not be higher
than currently estimated by the EPA. In addition, under the federal
environmental laws, the liability costs for the clean-up of the site is joint
and several among all PRPs. Therefore, the ultimate cost of the clean-up to
the Company could be significantly higher than the amount presently accrued for
this liability.

Additionally, the Company is party to a number of lawsuits arising in the
normal course of business. The Company has defended and intends to continue to
defend these actions vigorously and believes, based on currently available
information, that adverse settlements, if any, in excess of insurance coverage
or amounts already provided, will not be material to its financial position or
results of operations.

NOTE J - INCOME TAXES

At December 31, 1994, the book basis of La/Cal's net assets exceeded their tax
basis by $3,798,000.

Based on preliminary purchase price calculations, the Company estimates it will
have gross deferred tax assets in excess of gross deferred tax liabilities.
The largest component of deferred tax assets is the net operating loss
carryforwards obtained from Patrick which are expected to approximate
$13,000,000 (tax effected). The Company has recorded a valuation allowance
against its gross deferred tax assets which will produce a net deferred tax
asset of zero.

NOTE K - PREFERRED STOCK

In accordance with the terms of the combination transactions, all of the
outstanding shares of PPC's Series B Convertible Preferred Stock were converted
into Goodrich Series A Convertible Stock except for 76,290 shares for which
appraisal rights have been exercised.

The Preferred Stock has a par value of $1.00 per share with a liquidation
preference of $10.00 per share, is convertible at the option of the holder at
any time, unless earlier redeemed, into shares of Common Stock of the Company
at an initial conversion rate of 3.33 shares of Common stock per share of
Preferred. The Preferred Stock also will automatically convert to Common Stock
if the closing price for the Preferred Stock exceeds $15.00 per share for ten
consecutive trading days. Upon any conversion of a share of Preferred Stock
prior to the close of business on September 15, 1997, the stockholder will
receive one Common Stock purchase warrant to purchase one share of Common Stock
at $5.00 per share, subject to adjustment in certain events. Any outstanding
warrants can be called on thirty days notice for $4.25 per warrant and will
expire on September 15, 1997.

The Preferred Stock is redeemable in whole or in part, at $12.00 per share,
plus accrued and unpaid dividends. Dividends on the Preferred Stock accrue at
an annual rate of 8%.

13
<PAGE> 14
NOTE L - SUBSEQUENT EVENT

As a result of the combination transactions, the Company was required to offer
a special conversion right to all holders of the Preferred Stock for a period
of 61 days beginning August 18, 1995. On October 18, 1995, holders of 363,851
shares of the Company's preferred stock elected to convert their shares to
Common Stock at an exchange rate of 6.25 to 1. This conversion resulted in the
Company issuing an additional 2,274,058 shares of Common Stock and resulted in
734,859 preferred shares outstanding.

NOTE M - STOCK OPTION AND INCENTIVE PROGRAMS

Goodrich currently has two plans which provide for stock option and other
incentive awards for the Company's key employees and consultants and its
directors. The Goodrich Petroleum Corporation 1995 Stock Option Plan allows
the Board of Directors, through its Compensation Committee, to grant stock
options, restricted stock awards, stock appreciation rights, long-term
incentive awards, and phantom stock awards, or any combination thereof to key
employees and consultants. The Goodrich Petroleum Corporation 1995 Nonemployee
Director Stock Option Plan provides for the grant of options to each director
who is not and has never been an employee of the Company.

Grants of 950,000 common stock options were made on August 15, 1995 under the
two plans. The average exercise price of such options is $0.99 per share.

Additionally, the Company assumed approximately 1,465,000 options to purchase
common stock from Patrick with an average exercise price of $2.25 per share and
assumed approximately 200,000 options with exercise prices ranging from $2.50
to $3.00 per share.

14
<PAGE> 15

Management's Discussion and Analysis of Financial
Condition and Results of Operations

Background of Business Combination and Basis of Presentation

As a result, comparison of the current and prior period financial statements
presented are significantly impacted by the combination transactions.

Changes in Financial Position (September 30, 1995 versus December 31, 1994)

As noted above, the balance sheet presented as of December 31, 1994 reflects
the assets and liabilities of La/Cal only whereas the balance sheet as of
September 30, 1995 reflects the assets and liabilities of the combined
entities. Variances in significant asset, liability and equity accounts are
addressed in the following paragraphs. See Note D to the consolidated
financial statements for additional information.

The September 30, 1995 balance sheet reflects the Company's investment in
marketable securities and investment in a pipeline joint venture which were
assets held by Patrick. Net property and equipment reflects an increase of
approximately $12,000,000 due to the addition of oil and gas properties of
Patrick which were recorded at the fair value on August 15, 1995 offset by
depletion, depreciation and amortization for the nine months ended September
30, 1995.

As of September 30, 1995, the Company has recorded a reserve for contingent
liabilities of approximately $ 718,000, of which $400,000 is related to
possible future amounts payable in its role as a potentially responsible party
for the cost of clean-up of "hazardous substances" at an oil field waste
disposal site. This liability was attributable to Patrick and recorded by the
Company in connection with the combination transactions.

15
<PAGE> 16
The September 30, 1995 balance sheet reflects $814,688 in accrued liabilities
and $610,471 in other liabilities. Included in these amounts are the current
($415,000) and long-term ($610,471) portions of the Company's obligation under
consulting agreements with the Company's chairman and his son, a former
employee of Patrick.

Long term debt as of September 30, 1995 represents the outstanding balance
under the Company's credit facility with a bank. The original amount drawn
under the facility immediately following the merger was $21,000,000 but was
reduced to $11,000,000 at September 30, 1995 primarily due to proceeds from the
sale of the investment in the Penske Corporation (see Note E to the
consolidated financial statements). Debt outstanding as of December 31, 1994
reflected amounts issued under La/Cal's 10% Senior Secured General Obligation
Notes. This debt was paid off in connection with the combination.

Due to La/Cal being a partnership and its recorded liabilities exceeding its
assets, the December 31, 1994 balance sheet reflects an amount for partners'
deficit of $2,081,217. The September 30, 1995 balance sheet reflects
stockholder equity accounts of the Company, a corporation. Convertible
preferred stock of Patrick was converted into preferred stock of Goodrich and
recorded at its par value of $1,098,710. Common stock reflects 39,530,452
shares issued in the merger transactions at $.20 per share par value. The
September 30, 1995 additional paid in capital balance is the result of the
effects of the combination transactions, primarily the elimination of partners'
deficit of La/Cal and stockholders' equity of Patrick, issuance of the
Company's common and preferred stock, and the recording of Patrick's assets and
liabilities at fair value.

Retained earnings at September 30, 1995 reflect only the operations of the
Company since August 15, 1995, the date the combination transactions.

Changes in Results of Operations

As noted above, the statements of operations for the nine and three months
ended September 30, 1994 reflect the operations of La/Cal only, whereas the
statement of operations for the nine and three months ended September 30, 1995
reflect the operations solely of La/Cal prior to the combination date (August
15, 1995) and the operations of the combined entities subsequent to the
combination date. Variances in significant operating captions are addressed in
the following paragraphs.

Nine months ended September 30, 1995 versus nine months ended September 30,
1994 - Operating revenues in 1995 amounted to $3,696,485 and were $40,601 (1%)
lower than 1994 due to lower oil and gas sales which was primarily due to lower
average gas prices for the period (see volume and price table below). This was
partially offset by the revenues from the pipeline joint venture which was
acquired from Patrick and contributed $113,937 in 1995.

16
<PAGE> 17

<TABLE>
<CAPTION>
1995 1994
---- ----
Production Average Price Production Average Price
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>

Gas (MCF) 1,764,583 $ 1.57 1,650,577 $ 1.95
Oil (BBLS) 49,066 $16.72 25,267 $16.10
</TABLE>

Lease operating expense and production taxes were $50,123 or 10% higher and
depletion, depreciation and amortization was $210,906 or 28% higher than 1994
due to the inclusion of the combined entities subsequent to August 15, 1995.

The large variance ($170,429) in general and administrative expenses is due to
the fact that La/Cal was provided substantially all of its general and
administrative expenses at no cost by an affiliate whereas the Company provides
its own general and administrative services. Additionally, as a public
company, the Company incurs a higher level of general and administrative
expenses than as a privately held company. However, based on the Company's
current and anticipated future level of operations on a combined basis, such
expenses were, and are anticipated to continue to be, less than the combined
historical general and administrative expenses of La/Cal and Patrick.

Interest expense was $111,580 (14%) higher in 1995 due to the Company having
outstanding debt of $21,000,000 for the period from August 15, 1995 to
September 18, 1995 and La/Cal having slightly higher average debt outstanding
in 1995. A partial offsetting factor to this was the Company's lower effective
interest rate from August 15, 1995 to September 30, 1995.

The statements of operations reflect no income taxes due to: 1) the individual
partners of La/Cal being responsible for such taxes for the periods containing
the operations of La/Cal only (see Note J to consolidated financial statements
for pro forma income tax information) and 2) the ability of the Company to
utilize operating loss carryforwards obtained from Patrick to offset any income
tax liability.

In connection with the combination transactions, the Company paid off La/Cal's
General Obligation Notes and the related unamortized debt financing costs of
$482,906 were charged to operations as an extraordinary item in the third
quarter of 1995.

The Company assumed Patrick's Convertible Preferred Stock and has incurred
related dividends of $107,960 from August 15, 1995 to September 30, 1995.

Three months ended September 30, 1995 versus three months ended September 30,
1994 - Operating revenues were $1,414,410 in 1995 and were $217,972 (13%) lower
than 1994. This was due to lower oil and gas revenues resulting from lower
volumes of gas production and lower average oil and gas prices for the period
(see volume and price table below). This factor was offset somewhat by
revenues from the pipeline joint venture which was acquired from Patrick which
contributed $113,937 in 1995.

17
<PAGE> 18
<TABLE>
<CAPTION>
1995 1994
---- ----
Production Average Price Production Average Price
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>

Gas (MCF) 584,637 $1.49 745,832 $ 1.90

Oil (BBLS) 32,717 16.67 12,543 $17.05

</TABLE>

Lease operating expense and production taxes were approximately the same in
1995 as in 1994 as La/Cal expenses were less than in 1994. Depletion,
depreciation and amortization was $225,309 or 67% higher than 1994 due to the
inclusion of the merged entities subsequent to August 15, 1995 which included
depletion, depreciation and amortization on the assets acquired from Patrick
(at fair value bases).

The large variance ($184,914) in general and administrative expenses is due to
the fact that La/Cal was provided general and administrative expenses at no
cost by an affiliate whereas the Company provides its own general and
administrative services. Additionally, as a public company, the Company incurs
a higher level of general and administrative expenses than as a privately held
company. However, based on the Company's current and anticipated future level
of operations on a combined basis, such expenses were, and are anticipated to
continue to be less than, the combine historical general and administrative
expenses of La/Cal and Patrick.

Interest expense was $58,333 (19%) higher in 1995 due to the Company having
outstanding debt of $21,000,000 for the period from August 15, 1995 to
September 18, 1995 offset by La/Cal having slightly lower average debt
outstanding during the 1995 period and the Company's lower effective interest
rate from August 15, 1995 to September 30, 1995.

The statement of operations reflect no income taxes due to: 1) the individual
partners of La/Cal being responsible for such taxes for the periods containing
the operations of La/Cal only (see notes to consolidated financial statements
for pro forma income tax information) and 2) the ability of the Company to
utilize operating loss carryforwards obtained from Patrick to offset any income
tax liability.

The Company assumed Patrick's Convertible Preferred Stock and has incurred
related dividends of $107,960 from August 15, 1995 to September 30, 1995.

18
<PAGE> 19
Liquidity and Capital Resources (Nine months ended September 30, 1995 versus
nine months ended September 30, 1994)

Net cash provided by operating activities was $2,554,208 in 1995 compared to
$1,784,802 in 1994. The Company's accompanying consolidated statements of cash
flows identify major differences between net income and net cash provided by
operating activities for each of the nine month periods. For additional
information relating to the operating results of the Company, see "Changes in
Results of Operations".

Net cash provided by investing activities amounted to $8,041,804 in 1995
compared to net cash used of $3,728,504 in 1994. The year ended December 31,
1995 reflects the receipt by the Company of $9,600,000 cash in September from
the sale of the investment in the Penske Corporation as well as the payment by
the Company of $1,088,432 in connection with the business combination. The
year ended December 31, 1994 reflects $3,728,504 in capital expenditures due to
extensive drilling and completion activities related to the La/Cal oil and gas
wells during that period. Drilling and completion activities were suspended
during 1995 in anticipation of the combination transactions.

Net cash used by financing activities in 1995 total $11,124,517 compared to net
cash provided by financing activities of $1,910,319 in 1994.

The 1995 amount included the borrowing of $21,000,000 by the Company which was
used primarily to pay off the debt assumed from La/Cal and Patrick
($19,777,531). The remainder of the loan proceeds were used to provide working
capital and pay accrued interest. The year ended December 31, 1995 also
reflects debt paydowns as follows: 1) $915,310 by La/Cal on its General
Obligation Notes prior to August 15, 1995; 2) $9,500,000 by the Company on its
credit facility in September from the Penske sale proceeds; 3) $500,000 by the
Company on its credit facility from operations/working capital. The 1995
amount also includes partnership distributions by La/Cal of $1,132,735 prior to
August 15, 1995 and the Company's preferred stock dividend for the third
quarter in the amount of $215,921.

The 1994 amount consists of La/Cal borrowings used to partially fund the
capital expenditures mentioned above and partnership distributions of
$2,689,971. Additionally, it includes subsequent payments of $1,119,643 on
such debt.

Other

19
<PAGE> 20
The original borrowing base of $22,000,000 was reduced to $15,000,000 after the
sale of the Company's investment in the Penske Corporation (see Note E above),
in accordance with the specific provisions of the credit facility. The amount
drawn by the Company as of September 30, 1995 was $11,000,000.

The Company plans to incur capital expenditures in the amount of approximately
$6,000,000 in the fourth quarter of 1995 and calendar 1996 (15 month period).
The Company would expect to finance such expenditures from operating cash flow
and draws on its bank credit facility.

The Company's business strategy is to explore and develop drilling prospects
along the Gulf Coast and West Texas and pursue strategic acquisitions of oil
and gas properties that offer additional development drilling opportunities.
It is anticipated that such acquisitions would be financed with bank or other
institutional borrowings.

20
<PAGE> 21
PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

None

Item 2. Changes in Securities.

The Company's credit facility requires minimum net worth and debt
service ratios be maintained by the Company. Accordingly, the Company
had $1,233,896 available for the payment of dividends at September 30,
1995.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Results of Votes of Security Holders.

None.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits
3.1 Amended and Restated Certificate of Incorporation of
Goodrich Petroleum Corporation
3.2 Amended and Restated Bylaws of Goodrich Petroleum
Corporation
10.1 Consulting Services Agreement between Leo E. Bromberg and
Goodrich Petroleum Corporation

(b) Reports on Form 8-K
1) Form 8-K filed as of August 15, 1995 reporting the closing of
the merger between and among Goodrich Petroleum Corporation,
Patrick Petroleum Company and La/Cal Energy Partners.
2) Form 8-K/A filed as of August 15, 1995 providing:
a) historical financial statements of Patrick Petroleum
Company and La/Cal Energy Partners as of June 30, 1995,
December 31, 1994 and 1993 and for the six months ended
June 30, 1995 and the years ended December 31, 1994, 1993,
and 1992.
b) pro forma financial statements of Goodrich Petroleum
Corporation as of June 30, 1995 and for the six months
ended June 30, 1995 and the year ended December 30, 1994.

21
<PAGE> 22
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Goodrich Petroleum Corporation
------------------------------
Goodrich Petroleum Corporation

November 13, 1995 /s/ Walter G. Goodrich
----------------- --------------------------------------
Date Walter G. Goodrich, President and
Chief Executive Officer

November 13, 1995 /s/ Roland L. Frautschi
----------------- --------------------------------------
Date Roland L. Frautschi, Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer)

<PAGE> 23

INDEX TO EXHIBITS

Exhibit No. Description
- ----------- -----------
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of
Goodrich Petroleum Corporation

3.2 Amended and Restated Bylaws of Goodrich Petroleum
Corporation

10.1 Consulting Services Agreement between Leo E. Bromberg and
Goodrich Petroleum Corporation

</TABLE>

<PAGE> 1

EXHIBIT A

RESTATED

CERTIFICATE OF INCORPORATION

GOODRICH PETROLEUM CORPORATION

I. The name of the corporation is GOODRICH PETROLEUM CORPORATION (the
"Corporation").

II. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware,
County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.

III. The purpose or purposes for which the corporation is formed are to
engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.

IV. The total number of shares of all classes of stock which the
corporation shall have authority to issue is one hundred ten million
(110,000,000), consisting of one hundred million (100,000,000) shares
of Common Stock, par value $0.20 per share, and ten million
(10,000,000) shares of Preferred Stock, par value $1.00 per share.

The following is a statement fixing certain of the designations and
powers, voting powers, preferences, and relative, participating, optional or
other rights of the Preferred Stock and the Common Stock of the corporation,
and the qualifications, limitations or restrictions thereof, and the authority
with respect thereto expressly granted to the Board of Directors of the
corporation to fix any such provisions not fixed by this Certificate:

A. Preferred Stock

The Board of Directors is hereby expressly vested with the authority
to adopt a resolution or resolutions providing for the issue of authorized but
unissued shares of Preferred Stock, which shares may be issued from time to
time in one or more series and in such amounts as may be determined by the
Board of Directors in such resolution or resolutions. The powers, voting
powers, designations, preferences, and relative, participating, optional or
other rights, if any, of each series of Preferred Stock and the qualifications,
limitations or restrictions, if any, of such preferences and/or rights
(collectively the "Series Terms"), shall be such as are stated and expressed in
a resolution or resolutions providing for the creation or revision of such
Series Terms (a "Preferred Stock Series Resolution") adopted by the Board of
Directors or a committee of the Board of Directors to which such responsibility
is specifically and lawfully delegated. The powers of the Board with respect to
the Series Terms of a particular series (any of which powers, other than voting
<PAGE> 2

powers, may by resolution of the Board of Directors be specifically
delegated to one or more of its committees, except as prohibited by law) shall
include, but not be limited to, determination of the following:

(1) The number of shares constituting that series and the
distinctive designation of that series, or any increase or
decrease (but not below the number of shares thereof then
outstanding) in such number;

(2) The dividend rate on the shares of that series, whether such
dividends, if any, shall be cumulative, and, if so, the date
or dates from which dividends payable on such shares shall
accumulate, and the relative rights of priority, if any, of
payment of dividends on shares of that series;

(3) Whether that series shall have voting rights, in addition to
the voting rights provided by law, and, if so, the terms of
such voting rights;

(4) Whether that series shall have conversion privileges with
respect to shares of any other class or classes of stock or of
any other series of any class of stock, and, if so, the terms
and conditions of such conversion, including provision for
adjustment of the conversion rate upon occurrence of such
events as the Board of Directors shall determine;

(5) Whether the shares of that series shall be redeemable, and, if
so, the terms and conditions of such redemption, including
their relative rights of priority, if any, of redemption, the
date or dates upon or after which they shall be redeemable,
provisions regarding redemption notices, and the amount per
share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates;

(6) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so,
the terms and amount of such sinking fund;

(7) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution, or winding
up of the corporation, and the relative rights of priority, if
any, of payment of shares of that series;

(8) The conditions or restrictions upon the creation of
indebtedness of the corporation or upon the issuance of
additional Preferred Stock or other capital stock ranking on a
parity therewith, or prior thereto, with respect to dividends
or distribution of assets upon liquidation;

(9) The conditions or restrictions with respect to the issuance
of, payment of dividends upon, or the making of other
distributions to, or the acquisition or redemption of, shares
ranking junior to the Preferred Stock or to any series thereof
with respect to dividends or distribution of assets upon
liquidation; and

-2-
<PAGE> 3
(10) Any other designations, powers, preferences, and rights,
including, without limitation, any qualifications,
limitations, or restrictions thereof.

Any of the Series Terms, including voting rights, of any series may be
made dependent upon facts ascertainable outside the Certificate of
Incorporation and the Preferred Stock Series Resolution, provided that the
manner in which such facts shall operate upon such Series Terms is clearly and
expressly set forth in the Certificate of Incorporation or in the Preferred
Stock Series Resolution.

Subject to the provisions of this Article Fourth, shares of one or
more series of Preferred Stock may be authorized or issued from time to time as
shall be determined by and for such consideration as shall be fixed by the
Board of Directors or a designated committee thereof, in an aggregate amount
not exceeding the total number of shares of Preferred Stock authorized by this
Certificate of Incorporation. Except in respect of series particulars fixed by
the Board of Directors or its committee as permitted hereby, all shares of
Preferred Stock shall be of equal rank and shall be identical. All shares of
any one series of Preferred Stock so designated by the Board of Directors shall
be alike in every particular, except that shares of any one series issued at
different times may differ as to the dates from which dividends thereon shall
be cumulative.

B. Series A Convertible Preferred Stock

1. Designation and Amount

There shall be a series of Preferred Stock designated as
Series A Convertible Preferred Stock ("Series A Preferred Stock") and
the number of shares constituting such series shall be 1,375,000.
Such number of shares may be increased or decreased by resolution of
the Board of Directors, provided that no decrease shall reduce the
number of Series A Preferred Stock to a number less than the number of
shares then outstanding or reserved for issuance in certain events.
All shares of Series A Preferred Stock shall rank prior, both as to
payment of dividends and as to distributions of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation to all of the Corporation's now or hereafter issued Common
Stock and any other series of capital stock of the corporation that is
not, by its terms, senior to or pari passu with the Series A Preferred
Stock.

2. Dividends

The holders of the then outstanding Series A Preferred Stock
shall be entitled to receive, when, as, and if declared by the Board
of Directors, out of any funds legally available therefor, dividends
at an annual rate of eight percent (8%) per share of Series A
Preferred Stock (appropriately adjusted for stock splits and
combinations), payable in preference and priority to any payment of
any dividend on the Corporation's Common Stock. Dividends shall
accrue without interest and be cumulative from the date of first
issuance and shall be payable in cash, when, as and if declared by the
Board of Directors of the Corporation, quarterly in arrears on March
31, June 30, September 30 and December 31 of each year, beginning on
September 30, 1993 (except that if any such date is a Saturday,

-3-
<PAGE> 4
Sunday or legal holiday then such dividend shall be payable on the
next day that is not a Saturday, Sunday or legal holiday) to holders
of record on such record dates as are fixed by the Board of Directors.
Subject to the following paragraph, dividends in arrears for any past
dividend period may be declared and paid at any time. The amount of
dividends payable for any period shorter than a full quarterly
dividend period shall be computed on the basis of a 360-day year.

Dividends and distributions (other than dividends payable
solely in Common Stock or other capital stock ranking junior as to
dividend rights to the Series A Preferred Stock) may not be declared,
paid, or set apart for payment and purchases, redemptions or other
acquisitions of shares of Common Stock or other capital stock ranking
junior as to dividend rights may not be made unless all accrued and
unpaid dividends (including the full dividend for the then current
dividend period) on the Series A Preferred Stock have been paid or
declared and set apart for payment.

If at any time any dividend on any capital stock of the
Corporation ranking senior as to dividends to the Series A Preferred
Stock shall be in default, in whole or in part, then no dividend shall
be paid or declared and set apart for payment on the Series A
Preferred Stock unless and until all accrued and unpaid dividends with
respect to the senior ranking stock shall have been paid or declared
and set apart for payment. No full dividends shall be paid or
declared and set apart for payment on any class or series of the
Corporation's capital stock ranking, as to dividends, on a parity with
the Series A Preferred Stock for any period unless full cumulative
dividends have been or contemporaneously are, paid or declared and set
apart for payment on the Series A Preferred Stock for all dividend
payment periods terminating on or prior to the date of payment of such
full cumulative dividends. No full dividends shall be paid or
declared and set apart for payment on the Series A Preferred Stock for
any period unless full cumulative dividends have been, or
contemporaneously are, paid or declared and set apart for payment on
the stock ranking on parity with the Series A Preferred Stock for all
dividend periods terminating on or prior to the date of payment of
such full cumulative dividends. When dividends are not paid in full,
all dividends paid or declared and set apart for payment upon shares
of Series A Preferred Stock and the stock ranking on parity with the
Series A Preferred Stock shall be paid or declared and set apart for
payment pro rata so that the amount of dividends paid or declared and
set aside for payment per share on the Series A Preferred Stock and
the stock ranking on parity shall in all cases bear to each other the
same ratio that accrued and unpaid dividends per share on the shares
of Series A Preferred Stock and the stock ranking on parity bear to
each other.

Any reference to "distribution" contained in this Section 2
shall not be deemed to include any distribution made in connection
with any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary.

3. Liquidation Rights

In the event of a voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, the holders of shares
of Series A Preferred Stock shall be entitled to receive,

-4-
<PAGE> 5
out of the assets of the Corporation legally available therefor, a sum
equal to $10.00 per share of Series A Preferred Stock, as
appropriately adjusted for stock splits or combinations, plus
dividends, if any, then accrued and unpaid to the distribution date,
before any payment shall be made or any assets distributed to the
holders of Common Stock, or other class or series of capital stock
ranking junior to the Series A Preferred Stock in liquidation rights,
provided that such rights shall accrue to the holders of Series A
Preferred Stock only in the event that payments with respect to the
liquidation preferences of the holders of capital stock of the
Corporation ranking senior as to liquidation rights to the Series A
Preferred Stock are fully met. The holders of Series A Preferred
Stock and all classes of stock hereafter issued that rank on a parity
as to liquidation rights with the Series A Preferred Stock are
entitled to share ratably, in accordance with the respective
preferential amounts payable on such stock, in any distribution which
is not sufficient to pay in full the aggregate of the amounts payable
thereon.

A consolidation, merger or other business combination of the
Corporation with or into any other corporation or entity or a sale or
transfer of all or substantially all of the assets of the Corporation
for cash, securities or other property shall not be deemed to be a
liquidation, dissolution or winding up for purposes of this Section 3.

4. Voting Rights

The holders of Series A Preferred Stock shall have no voting
rights except as set forth herein or as required by the Delaware
General Corporation Law. In connection with any such vote, each
outstanding share of Series A Preferred Stock shall be entitled to one
vote, except that any such shares held by the Corporation or any
entity controlled by the Corporation shall have no voting rights and
shall not be counted in determining the presence of a quorum.

Whenever dividends on the Series A Preferred Stock or any
outstanding shares of stock having parity with the Series A Preferred
Stock as to dividends are in arrears in an amount equal to at least
six quarterly dividends, whether or not consecutive, the number of
directors of the Corporation shall be increased by two, and the
holders of the Series A Preferred Stock (voting separately as a class
with the holders of stock having parity with the Series A Preferred
Stock as to dividends on which like voting rights have been conferred
and are exercisable) shall be exclusively entitled to elect such two
additional directors at any meeting of stockholders of the Corporation
at which directors are to be elected held during the period such
dividends remain in arrears. Such voting right will terminate when
all such dividends accrued and in default have been declared and paid
in full or set apart for payment. The term of office of all directors
so elected shall terminate immediately upon such payment or setting
apart for payment.

The foregoing right of the holders of the Series A Preferred
Stock with respect to the election of two directors may be exercised
at any annual meeting of stockholders or at any special meeting of
stockholders held for such purpose. If the right to elect directors
shall have accrued to the holders of the Series A Preferred Stock more
than 90 days preceding the

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<PAGE> 6
date established for the next annual meeting of stockholders, the
president of the Corporation shall, within 20 days after the delivery
to the Corporation at its principal office of a written request for a
special meeting signed by the holders of at least ten percent (10%) of
the Series A Preferred Stock then outstanding, call a special meeting
of the holders of the Series A Preferred Stock to be held within 60
days after the delivery of such request for the purpose of electing
such additional directors.

Any vacancy in the Board of Directors occurring because of the
death, resignation or removal of a director elected by the holders of
Series A Preferred Stock (and any class of stock having parity) voting
as a separate class shall be filled by the vote of the holders of the
Series A Preferred Stock (and any class of stock having parity) or, in
the absence of action by such holders, by action of the remaining
director elected by the holders of such stock.

So long as any Series A Preferred Stock is outstanding, the
Corporation shall not, without the affirmative vote of the holders of
at least 66 2/3 percent of all outstanding shares of Series A
Preferred Stock, voting separately as a class, whether or not a vote
of the stockholders would otherwise be required by law, (i) amend,
alter or repeal (by merger or otherwise) any provision of the
Certificate of Incorporation or the Bylaws of the Corporation so as to
affect adversely the relative rights, preferences, qualifications,
limitations or restrictions of the Series A Preferred Stock, (ii)
authorize or issue, or increase the authorized amount of, any
additional class or series of stock of the Corporation, or any
security convertible into stock of such class or series, having rights
senior to the Series A Preferred Stock as to dividends or liquidation,
or (iii) effect any reclassification of the Series A Preferred Stock.

So long as any Series A Preferred Stock is outstanding, the
Corporation shall not, without the affirmative vote of the holders of
at least 50 percent of all outstanding shares of Series A Preferred
Stock, voting separately as a class, whether or not a vote of the
stockholders would otherwise be required by law, (i) authorize or
issue, or increase the authorized amount of, any additional class or
series of stock of the Corporation, or any security convertible into
stock of such class or series, having rights pari passu with the
Series A Preferred Stock as to dividends or liquidation and any right
to vote, whether as a separate class or otherwise, on any matter
(other than a matter that can have no effect on the rights of the
Series A Preferred Stock) as to which the Series A Preferred Stock is
not entitled to vote, or (ii) incur indebtedness for money borrowed or
authorize or issue, or increase the authorized amount of, any
additional class or series of stock of the Corporation, or any
security convertible into stock of such class or series, having rights
pari passu with the Series A Preferred Stock as to dividends or
liquidation if, immediately following such event, Adjusted
Stockholders' Equity, as defined below, shall be less than the
aggregate liquidation preferences of the Series A Preferred Stock and
all classes and series of stock of the Corporation ranking senior to
or pari passu with the Series A Preferred Stock as to liquidation
preference. For the purpose of the foregoing sentence, Adjusted
Stockholders' Equity shall mean the Stockholders' Equity of the
Corporation, as shown on its most recent balance sheet filed with the
Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, as amended, (the "Exchange Act") increased by (A) any
amount of

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<PAGE> 7
any liability or other reduction in Stockholders' Equity attributable
to the Series A Preferred Stock and any class or series of stock of
the Corporation ranking senior to or pari passu with the Series A
Preferred Stock as to liquidation preference and (B) the net proceeds
of any equity financing of the Corporation since the date of such
balance sheet, and reduced by the amount of any reduction in
Stockholders' Equity resulting from a disposition of assets since the
date of such balance sheet which disposition of assets is required to
be described on Form 8-K under the Exchange Act.

5. Redemption

The Corporation may, at its option, redeem all or part of the
shares of the Series A Preferred Stock then outstanding on any date
set by the Board of Directors at any time after September 14, 1994.
The redemption price, to be paid in cash, for each share of Series A
Preferred Stock shall be $12.00 plus any accrued and unpaid dividends,
whether or not declared.

At least 30 but not more than 60 days prior to the date fixed
for redemption of any of the Series A Preferred Stock ("Redemption
Date"), written notice shall be mailed, first class postage prepaid,
to each holder of record of the Series A Preferred Stock to be
redeemed at the close of business on the business day next preceding
the day on which notice is given (the "Redemption Record Date") at the
address last shown on the records of the Corporation for such holder
or given by the holder to the Corporation for the purpose of notice,
notifying such holder of the redemption to be effected and specifying
the Redemption Date; the redemption price; the place or places at
which payment may be obtained; the method used in determining what
shares are to be redeemed in the event that less than all shares are
to be redeemed; that the payment will be made upon presentation and
surrender of the shares to be redeemed; that on and after the
Redemption Date, dividends will cease to accrue on such shares; the
then effective conversion rate of the shares to be redeemed; the date
on which such holder's conversion rights as to such shares terminate
and calling upon such holder to surrender to the Corporation, in the
manner and at the place designated, his certificate or certificates
representing the shares to be redeemed (the "Redemption Notice").

Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the
holder receives such notice; and failure to give such notice by mail,
or any defect in such notice, to the holders of any shares designated
for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Series A Preferred Stock. On or
after the date fixed for redemption as stated in such notice, each
holder of the shares called for redemption shall surrender the
certificate evidencing such shares to the Corporation at the place
designated in such notice and shall thereupon be entitled to receive
payment of the redemption price. If less than all the shares
represented by any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.

From and after the Redemption Date, unless there shall have
been a default in payment of the redemption price, all rights of the
holders of the Series A Preferred Stock so

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<PAGE> 8
redeemed (except the right to receive the redemption price without
interest upon surrender of their certificate or certificates) shall
terminate with respect to such shares, and such shares shall not
thereafter be transferred on the books of the Corporation or be deemed
to be outstanding for any purpose whatsoever. The shares of Series A
Preferred Stock not redeemed, if any, shall remain outstanding and
entitled to all the rights and preferences provided herein.

Three days prior to the Redemption Date, the Corporation shall
deposit the redemption price of all Series A Preferred Stock to be
redeemed with a bank or trust company in the United States of America
having aggregate capital and surplus in excess of $50,000,000 as a
trust fund for the benefit of the holders of the shares designated for
redemption. Simultaneously, the Corporation shall deposit irrevocable
instruction and authority to such bank or trust company to pay, on and
after the Redemption Date, the redemption price of the Series A
Preferred Stock to the holders thereof upon surrender of their
certificates. Any monies deposited by the Corporation for the
redemption of shares that are thereafter converted into shares of
Common Stock (and Warrants prior to September 15, 1997) no later than
the close of business on the day preceding the Redemption Date shall
be returned to the Corporation forthwith upon such conversion. The
balance of any monies deposited by the Corporation remaining unclaimed
at the expiration of one year following the Redemption Date shall
thereafter be returned to the Corporation, provided that the
stockholder to which such monies would be payable hereunder shall be
entitled, upon proof of ownership of the Series A Preferred Stock and
payment of any bond requested by the Corporation, to receive such
monies but without interest from the Redemption Date.

If fewer than all of the outstanding shares of Series A
Preferred Stock are to be redeemed, the Corporation shall designate
those shares to be redeemed pro rata or by lot or in such other manner
as the Board of Directors may determine. There shall be no mandatory
redemption, retirement or sinking fund obligation of the Corporation
with respect to the Series A Preferred Stock. In the event that the
Corporation is in arrears on the payment of accrued and unpaid
dividends on the Series A Preferred Stock, it shall not redeem any of
the then outstanding shares of the Series A Preferred Stock until all
such accrued dividends and (except with respect to shares to be
redeemed) the then current quarterly dividend have been paid in full.

6. Conversion

(A) Automatic Conversion. If at any time, the closing
price for the Series A Preferred Stock, as quoted on Nasdaq or any
national securities exchange, shall exceed 150% of the then
liquidation preference per share of Series A Preferred Stock for ten
consecutive trading days, then, effective as of the close of trading
on the tenth such trading day, all of the then outstanding shares of
Series A Preferred Stock shall be automatically converted into Common
Stock and a Warrant, as provided in Section 6 (C), below, at the then
effective conversion rate.

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<PAGE> 9
(B) Optional Conversion. Each share of Series A Preferred
Stock shall be convertible at the option of the holder thereof at any
time prior to maturity and prior to the close of business on the
business day prior to the Redemption Date relating to such share, if
any, into Common Stock and a Warrant, as provided in Section 6 (C),
below.

(C) Effect of Conversion. Upon the occurrence of a
conversion as provided in Sections 6 (A) or (B), above, the holder of
shares of converted Series A Preferred Stock shall be entitled to
receive (i) a number of shares of Common Stock determined by
multiplying the number of shares of Series A Preferred Stock to be
converted by the Conversion Rate (as defined below) and (ii) if such
conversion occurs prior to September 15, 1997, one Warrant to purchase
one share of Common Stock. The Conversion Rate shall be applied by
multiplying one by a fraction, the numerator of which is the sum of
the then liquidation preference of a share of Series A Preferred Stock
and all fully accrued and unpaid dividends as of the end of the most
recent dividend period relating to such share of Series A Preferred
Stock, and the denominator of which (the "Conversion Price") is
initially $3.00 and is subject to adjustment as provided in Section 6
(E), below. From and after any conversion of Series A Preferred
Stock, all rights of the holders of converted Series A Preferred Stock
shall cease, except the right to receive Common Stock and Warrants as
provided in this Section 6 (C). For the purpose of this Section 6,
the term "Common Stock" shall initially mean the class designated as
Common Stock, par value $.20 per share, of the Corporation as of
September 14, 1992, subject to adjustment as hereinafter provided and
the term "Warrant" shall mean the Warrants issued pursuant to the
Warrant Agency Agreement as provided in Section 6 (K), below.

(D) Conversion Procedures. Any holder of shares of Series
A Preferred Stock desiring to convert such shares shall surrender the
certificate or certificates for such shares of Series A Preferred
Stock at the office of the transfer agent for the Series A Preferred
Stock, which certificate or certificates, if the Corporation shall so
require, shall be duly endorsed to the Corporation or in blank, or
accompanied by proper instruments of transfer to the Corporation or in
blank, accompanied by irrevocable written notice to the Corporation
that the holder elects so to convert such shares of Series A Preferred
Stock and specifying the name or names (with address) in which a
certificate or certificates for Common Stock and Warrants are to be
issued.

Upon automatic conversion of Series A Preferred Stock as
provided in Section 6 (A), above, certificates that, until such
conversion, represented Series A Preferred Stock ("Former Series A
Certificates") shall thereafter represent solely the right to receive
the securities and/or other property to which the holders of such
certificates became entitled upon such conversion. However, such
holders shall not be entitled to certificates representing any such
securities or to receive any such other property except upon surrender
of such Former Series A Certificates at the office of the transfer
agent for the Series A Preferred Stock or such successor transfer
agent as the Corporation shall reasonably appoint for that purpose and
give notice to the holders of Former Series A Certificates of such
appointment.

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<PAGE> 10
No adjustments in respect of dividends on the Common Stock
issued upon conversion shall be made upon the conversion of any shares
of Series A Preferred Stock.

The Corporation will, as soon as practicable after receipt of
certificates for Series A Preferred Stock accompanied by any required
written notice and compliance with any other conditions herein
contained, deliver at such office of such transfer agent to the person
for whose account such shares of Series A Preferred Stock were so
surrendered, or to his nominee or nominees, certificates for the
number of full shares of Common Stock and Warrants to which he shall
be entitled as aforesaid together with a cash adjustment for any
fraction of a share as hereinafter provided. Subject to the following
provisions of this paragraph, such conversion shall be deemed to have
been made as of the date of such surrender of the shares of Series A
Preferred Stock to be converted, and the person or persons entitled to
receive the Common Stock and Warrants deliverable upon conversion of
such Series A Preferred Stock shall be treated for all purposes as the
record holder or holders of such Common Stock and Warrants on such
date; provided, however, that the Corporation shall not be required to
convert any shares of Series A Preferred Stock while the stock
transfer books of the Corporation are closed for any purpose, but the
surrender of Series A Preferred Stock for conversion during any period
while such books are so closed shall become effective for conversion
immediately upon the reopening of such books as if the surrender had
been made on the date of such reopening, and the conversion shall be
at the conversion rate in effect on such date.

(E) Adjustment of Conversion Price. The definition of
the term "Common Stock" for purposes of this Section 6 and the
Conversion Price shall be subject to adjustment from time to time as
follows:

(i) In case the Corporation shall (1) pay a
dividend or make a distribution on its Common Stock that is
paid or made (A) in other shares of stock of the Corporation
or (B) in rights to purchase stock or other securities (other
than an event described in this Section 6 (E)), (2) subdivide
its outstanding shares of Common Stock into a greater number
of shares or (3) combine its outstanding shares of Common
Stock into a smaller number of shares, then in each such case
the Conversion Price in effect immediately prior thereto shall
be adjusted retroactively and the definition of "Common Stock"
shall be changed so that the holder of any shares of Series A
Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock of
the Corporation and other shares and rights to purchase stock
or other securities (or, in the event of the redemption of any
such shares or rights, any cash, property or securities paid
in respect of such redemption) which such holder would have
owned or have been entitled to receive after the happening of
any of the events described above had such shares of Series A
Preferred Stock been converted immediately prior to the
happening of such event. An adjustment made pursuant to this
Section 6 (E)(i) shall become effective immediately after the
record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in
the case of a subdivision or combination.

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<PAGE> 11
(ii) In case the Corporation shall issue rights or
warrants to all holders of its Common Stock entitling them
(for a period expiring within 45 days after the dated fixed
for determination mentioned below) to subscribe for or
purchase shares of Common Stock at a price per share less than
the current market price per share (determined as provided
below) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights
or warrants, then the Conversion Price in effect at the
opening of business on the day following the date fixed for
such determination shall be increased by multiplying such
Conversion Price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the
number of shares of Common Stock so offered for subscription
or purchase and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of
Common Stock that the aggregate of the offering price of the
total number of shares of Common Stock so offered for
subscription or purchase would purchase at such current market
price, such increase to become effective immediately after the
opening of business on the day following the date fixed for
such determination; provided, however, that in the event that
all the shares of Common Stock offered for subscription or
purchase are not delivered upon the exercise of such rights or
warrants, upon the expiration of such rights or warrants the
Conversion Price shall be readjusted to the Conversion Price
that would have been in effect had the numerator and the
denominator of the foregoing fraction and the resulting
adjustment been made based upon the number of shares of Common
Stock actually delivered upon the exercise of such rights or
warrants, rather than upon the number of shares of Common
Stock offered for subscription or purchase. For the purposes
of this subparagraph (ii), the number of shares of Common
Stock at any time outstanding shall not include shares held in
the treasury of the Corporation.

(iii) In case the Corporation shall, by dividend or
otherwise, distribute to all holders of its Common Stock
evidences of its indebtedness, cash (excluding ordinary cash
dividends paid out of retained earnings of the Corporation),
other assets or rights or warrants to subscribe for or
purchase any security (excluding those referred to in
subparagraphs (i) and (ii) above), then in each such case the
Conversion Price shall be adjusted retroactively so that the
same shall equal the amount determined by multiplying the
Conversion Price in effect immediately prior to the close of
business on the date fixed for the determination of
stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the current market
price per share (determined as provided below) of the Common
Stock on the date fixed for such determination and the
denominator shall be such current market price per share of
the Common Stock less the amount of cash and the then fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a
resolution of the Board of Directors) of the portion of the
assets, rights or evidences of indebtedness so distributed
applicable to one share of Common Stock, such adjustment to
become effective immediately prior to the

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<PAGE> 12
opening of business on the day following the date fixed
for the determination of stockholders entitled to receive such
distribution.

(iv) For the purpose of any computation under
subparagraphs (ii) and (iii), the current market price per
share of Common Stock on any date shall be deemed to be the
average of the daily closing prices for the 20 consecutive
trading days commencing with the 30th trading day before the
day in question. The closing price for each day shall be the
reported last sales price regular way or, in case no such
reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either
case on the New York Stock Exchange or, if the Common Stock is
not listed or admitted to trading on such Exchange, on the
principal national securities exchange on which the Common
Stock is listed or admitted to trading (based on the aggregate
dollar value of all securities listed or admitted to trading)
or, if not listed or admitted to trading on any national
securities exchange, on NASDAQ or, if the Common Stock is not
listed or admitted to trading on any national securities
exchange or quoted on NASDAQ, the average of the closing bid
and asked prices in the over-the-counter market as furnished
by any New York Stock Exchange member firm selected from time
to time by the Corporation for that purpose, or, if such
prices are not available, the fair market value set by, or in
a manner established by, the Board of Directors of the
Corporation in good faith. "Trading day" shall mean a day on
which the national securities exchange or NASDAQ used to
determine the closing price is open for the transaction of
business or the reporting of trades or, if the closing price
is not so determined, a day on which the New York Stock
Exchange is open for the transaction of business.

(v) No adjustment in the Conversion Price shall
be required unless such adjustment would require an increase
or decrease of at least one percent (1%) in such price;
provided, however, that the Corporation may make any such
adjustment at its election; and provided, further, that any
adjustments which by reason of this subparagraph (v) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 6 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.

(vi) Whenever the Conversion Price is adjusted or
the term "Common Stock" is redefined as provided in any
provision of this Section 6:

(1) the Corporation shall compute the
adjusted Conversion Price in accordance with this
Section 6 and shall prepare a certificate signed by
the principal financial officer of the Corporation
setting forth the adjusted Conversion Price and the
new definition of the term "Common Stock" if any, and
showing in reasonable detail the facts upon which
such adjustment is based, and such certificate shall
forthwith be filed with the transfer agent for the
Series A Preferred Stock; and

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<PAGE> 13
(2) a notice stating that the Conversion
Price has been adjusted and setting forth the adjusted
Conversion Price shall forthwith be required, and as
soon as practicable after it is required, such notice
shall be mailed by the Corporation to each holder of
record of Series A Preferred Stock at such holder's
address as it shall appear upon the stock transfer
books of the Corporation.

(vii) In the event that at any time, as a result of
any adjustment made pursuant to this Section 6, the holder of
any shares of Series A Preferred Stock thereafter surrendered
by conversion shall become entitled to receive any shares of
the Corporation other than shares of Common Stock and Warrants
or to receive any other securities, the number of such other
shares or securities so receivable upon conversion of any
share of Series A Preferred Stock shall be subject to
adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions contained
in this Section 6 with respect to the Common Stock.

(F) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon
conversion of Series A Preferred Stock. If more than one certificate
representing shares of Series A Preferred Stock shall be surrendered
for conversion at one time by the same holder, the number of full
shares issuable upon conversion thereof shall be computed on the basis
of the aggregate number of shares of Series A Preferred Stock so
surrendered. Instead of any fractional share of Common Stock that
would otherwise be issuable upon conversion of any shares of Series A
Preferred Stock, the Corporation will pay a cash adjustment in respect
of such fractional interest in an amount equal to the same fraction of
the market price per share of Common Stock as determined by the Board
of Directors or in any manner prescribed by the Board of Directors,
which, so long as the Common Stock is listed on the New York Stock
Exchange shall be the reported last sale price regular way at the
close of business on the business day prior to the day of conversion.

(G) Reclassification, Consolidation, Merger or Sale of
Assets. In case of any reclassification of the Common Stock, any
consolidation of the Corporation with, or merger of the Corporation
into, any other person, any merger of another person into the
Corporation (other than a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock), any sale or transfer of all or substantially
all of the assets of the Corporation or any compulsory share exchange,
pursuant to which share exchange the Common Stock is converted into
other securities, cash or other property (any of the foregoing being
herein referred to as a "Transaction"), then lawful provision shall be
made as part of the terms of such Transaction whereby the holder of
each share of Series A Preferred Stock then outstanding shall have the
right thereafter, during the period such share shall be convertible,
to convert such share only into the kind and amount of securities,
cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or share exchange by a holder of
the number of shares of Common Stock of the Corporation into which
such share of Series A Preferred Stock might have been converted
immediately prior to such reclassification, consolidation, merger,
sale, transfer or

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<PAGE> 14
share exchange. As a condition to the consummation of any
Transaction, the Corporation shall require that the person formed by
such consolidation or resulting from such merger or that acquires such
assets or that acquires the Corporation's shares, as the case may be,
shall make provisions in its certificate or articles of incorporation
or other constituent documents to establish such right. Such
certificate or articles of incorporation or other constituent
documents shall provide for adjustments which, for events subsequent
to the effective date of such certificate or articles of incorporation
or other constituent documents, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 6. The
above provisions shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers or share
exchanges.

(H) Reservation of Shares: Transfer Taxes: Etc. The
Corporation shall at all times reserve and keep available, out of its
authorized and unissued stock, solely for the purpose of effecting the
conversion of the Series A Preferred Stock, such number of shares of
its Common Stock and other securities free of preemptive rights as
shall from time to time be sufficient to effect the conversion of all
shares of Series A Preferred Stock and exercise of Warrants from time
to time outstanding. The Corporation shall from time to time, in
accordance with the laws of the State of Delaware, increase the
authorized number of shares of Common Stock and other securities if at
any time the number of shares of Common Stock and other securities not
outstanding shall not be sufficient to permit the conversion of all
the then outstanding shares of Series A Preferred Stock and the
exercise of Warrants.

If any shares of Common Stock required to be reserved for
purposes of conversion of the Series A Preferred Stock and exercise of
Warrants hereunder require registration with or approval of any
governmental authority under any Federal or State law before such
shares may be issued upon conversion or exercise, the Corporation will
in good faith and as expeditiously as possible endeavor to cause such
shares to be duly registered or approved, as the case may be. If the
Common Stock is listed on the New York Stock Exchange or any other
national securities exchange, the Corporation will, if permitted by
the rules of such exchange, list and keep listed on such exchange,
upon official notice of issuance, all shares of Common Stock issuable
upon conversion of the Series A Preferred Stock and the exercise of
Warrants.

The Corporation will pay any and all issue or other taxes that
may be payable in respect of any issue or delivery of shares of Common
Stock on conversion of the Series A Preferred Stock or the exercise of
Warrants. The Corporation shall not, however, be required to pay any
tax that may be payable in respect of any transfer involved in the
issue or delivery of Common Stock (or other securities or assets) in a
name other than that in which the shares of Series A Preferred Stock
so converted or the Warrants so exercised were registered, and no such
issue or delivery shall be made unless and until the person requesting
such issue has paid to the Corporation the amount of such tax or has
established, to the satisfaction of the Corporation, that such tax has
been paid.

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The Corporation shall not take any action that would cause any
equity securities issuable upon conversion of Series A Preferred Stock
immediately following such action to be other than fully paid and
nonassessable. In particular, but without limiting the generality of
the foregoing, before taking any action that would cause an adjustment
reducing the Conversion Price, such that the effective Conversion
Price would be below the then par or stated value of the Common Stock,
the Corporation will take any corporate action that may, in the
opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable shares of
Common Stock at the Conversion Price as so adjusted.

(I) Prior Notice of Certain Events. In case:

(i) the Corporation shall (1) declare any
dividend (or any other distribution) on its Common Stock,
other than (A) a dividend payable in shares of Common Stock or
(B) a dividend payable in cash out of its retained earnings
other than any special or nonrecurring or other extraordinary
dividend or (2) declare or authorize a redemption or
repurchase of in excess of ten percent (10%) of the then
outstanding shares of Common Stock; or

(ii) the Corporation shall authorize the granting
to the holders of Common Stock of rights or warrants to
subscribe for or purchase any shares of stock of any class or
of any other rights or warrants (other than any rights
specified in paragraph (E)(i)(1)(B) of this Section 6); or

(iii) of any reclassification of Common Stock
(other than a subdivision or combination of the outstanding
Common Stock, or a change in par value, or from par value to
no par value, or from no par value to par value), or of any
consolidation or merger to which the Corporation is a party
and for which approval of any stockholders of the Corporation
shall be required, or of the sale or transfer of all or
substantially all of the assets of the Corporation or of any
compulsory share exchange whereby the Common Stock is
converted into other securities, cash or other property; or

(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;

then the Corporation shall cause to be filed with the transfer agent
for the Series A Preferred Stock and shall cause to be mailed to each
holder of record of the outstanding Series A Preferred Stock, at such
holder's address as it shall appear upon the stock transfer books of
the Corporation, at least 15 days prior to the applicable record date
hereinafter specified, a notice stating (x) the date on which a record
is to be taken for the purpose of such dividend, distribution,
redemption or granting of rights or warrants or, if a record is not to
be taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution, redemption, rights or
warrants are to be determined, or (y) the date on which

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such reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up (but neither the
failure so to mail such notice nor any defect therein or in the
mailing thereof, shall affect the validity of the corporate action
required to be specified in such notice).

(J) Other Changes in the Conversion Price. The
Corporation from time to time may decrease the Conversion Price by any
amount for any period of time if the period is at least 20 days and if
the decrease is irrevocable during the period. Whenever the
Conversion Price is so decreased, the Corporation shall mail to
holders of record of the Series A Preferred Stock a notice of the
decrease at least 15 days before the date the decreased Conversion
Price takes effect, and such notice shall state the decreased
Conversion Price and the period it will be in effect.

The Corporation may make such decreases in the Conversion
Price, in addition to those required or allowed by this Section 6, as
shall be determined by it, as evidenced by a resolution of the Board
of Directors, to be advisable in order to avoid or diminish any income
tax to holders of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax
purposes.

(K) Warrants. Upon conversion of the Series A Preferred
Stock prior to September 15, 1997, the holders will receive one
warrant to purchase one share of Common Stock of the Corporation
("Warrant") for each share of Series A Preferred Stock converted. The
Warrants are to be issued pursuant to a Warrant Agency Agreement
between the Corporation's subsidiary Patrick Petroleum Company
("Patrick") and Harris Trust & Savings Bank as Warrant Agent or such
other party as may act as Warrant Agent under the Warrant Agency
Agreement which shall be in substantially the form filed as an exhibit
to Patrick's Registration Statement on Form S-2 (Registration No.
33-50756) as filed with the Securities and Exchange Commission and as
amended on September 3 and September 14, 1992, completed as set forth
therein and with such changes as may be required by law or usage. The
Warrants will allow the holders thereof to purchase one share of
Common Stock of the Corporation for $5.00, subject to adjustment, for
a period of five years from September 14, 1992. The Warrants cannot
be called by the Patrick prior to September 14, 1994 and thereafter
are subject to call on 30 days notice for $.25 per Warrant.

7. Special Conversion Rights Upon Corporate Change or Ownership
Change

(A) Corporate Change. Upon the occurrence of a Corporate
Change (as defined in (E) below) with respect to the Corporation, each
holder of Series A Preferred Stock shall have the right, at the
holder's option, for a period of 45 days after the mailing of a notice
by the Corporation that a Corporate Change has occurred, to convert
all, but not less than all, of such holder's Series A Preferred Stock
into Marketable Stock (as defined in (E) below)

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<PAGE> 17
with an aggregate Market Value (as defined in (E) below) equal to the
aggregate Adjusted Value (as defined in (E) below) of the Series A
Preferred Stock for which conversion is elected. If a Corporate
Change will result in no Marketable Stock being outstanding following
its occurrence, each holder of Series A Preferred Stock shall have the
special conversion right, if such holder so elects, to receive an
amount of the securities, cash or other property distributed to
holders of Common Stock in the Corporate Change, the value of which
equals the Adjusted Value per share of Series A Preferred Stock, and
in the event each share of Common Stock entitles its holder to more
than one type of consideration, in the same relative proportion of
each type of consideration per share of Common Stock. The Corporation
or the successor corporation, as the case may be, at its option, in
lieu of providing Marketable Stock or such other appropriate
consideration as required above upon any such conversion, may provide
the holder with cash equal to the Adjusted Value of the shares of the
Series A Preferred Stock for which conversion was elected. Series A
Preferred Stock that becomes convertible pursuant to the special
conversion right will, unless so converted, remain convertible into
the kind and amount of securities, cash or other assets that the
holder of the Series A Preferred Stock would have owned immediately
after the Corporate Change if the holder had converted the Series A
Preferred Stock immediately before the effective date of the Corporate
Change. The Corporation shall mail a notice of the holders of record
of Series A Preferred Stock of any pending Corporate Change at least
30 days in advance of the effective date of such Corporate Change in
order to allow such holders an opportunity to exercise their
conversion rights under Section 6 hereof prior to the effective date
of such Corporate Change and before the special conversion right
commences.

(B) Ownership Change. Upon the occurrence of an Ownership
Change (as defined in (E) below) with respect to the Corporation, each
holder of Series A Preferred Stock shall have the right, at the
holder's option, for a period of 45 days after the mailing of a notice
by the Corporation that an Ownership Change has occurred, to convert
all, but not less than all, of such holder's Series A Preferred Stock
into Common Stock with an aggregate Market Value equal to the
aggregate Adjusted Value of the Series A Preferred Stock for which
conversion was elected. The Corporation may, at its option, in lieu
of providing Common Stock upon any such special conversion, provide
the holder with cash equal to the Adjusted Value of the shares of the
Series A Preferred Stock for which conversion as elected. The special
conversion right arising upon an Ownership Change shall be applicable
only with respect to the first Ownership Change that occurs after the
first date of issuance of any shares of Series A Preferred Stock.

(C) Notice. At least 30 days prior to the proposed
effective date of a Corporate Change, the Corporation shall mail to
each holder of record of Series A Preferred Stock, at such holder's
address as it shall appear upon the stock transfer books of the
Corporation, a notice setting forth the details of the proposed
Corporate Change and the special conversion right. Upon the
occurrence of a Corporate Change or an Ownership Change with respect
to the Corporation, within 30 days after such occurrence, the
Corporation shall mail to each holder of record of Series A Preferred
Stock, at such holder's address as it shall appear upon the stock
transfer books of the Corporation, a notice of such occurrence (the
"Special Conversion Notice") setting forth the following:

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<PAGE> 18
(i) the event constituting the Corporate Change or
Ownership Change;

(ii) the last date upon which the special
conversion right may be exercised (the "Conversion Date");

(iii) the Applicable Value (as defined in (E) below);

(iv) the conversion price then in effect under
Section 6 and the continuing conversion rights, if any, under
Section 6;

(v) the name and address of the paying agent and
the conversion agent;

(vi) that holders who want to convert shares of
Series A Preferred Stock must satisfy the requirements of
Section 6(B) and must exercise such special conversion right
within the 45-day period after the mailing of such notice by
the Corporation; and

(vii) that the Corporation may, at its option,
elect to pay cash equal to the aggregate Adjusted Value of all
shares of Series A Preferred Stock for which the special
conversion was elected.

(D) Exercise Procedures. A holder of Series A Preferred
Stock must exercise the special conversion right within the 45-day
period after the mailing of the Special Conversion Notice by the
Corporation or such special conversion right shall expire. Such right
must be exercised in accordance with Section 6(B) to the extent the
procedures in Section 6(B) are consistent with the special provisions
of this Section 7. Exercise of such special conversion right shall be
irrevocable and dividends on Series A Preferred Stock tendered for
special conversion shall cease to accrue from and after the Conversion
Date. The Conversion Date with respect to the exercise of a special
conversion right arising upon a Corporate Change or Ownership Change
shall be the 45th day after the mailing of the Special Conversion
Notice.

(E) Definitions. The following definitions shall apply to
terms used in this Section 7:

(i) a "Corporate Change" with respect to the
Corporation means (1) the occurrence of any transaction or
event in connection with which all or substantially all of the
Common Stock of the Corporation shall be exchanged for,
converted into, acquired for or constitute solely the right to
receive cash, securities, property or other assets (whether by
means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification,
recapitalization or otherwise) or (2) the conveyance, sale,
lease, assignment, transfer or other disposal of all or
substantially all of the Corporation's property, business or
assets;

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<PAGE> 19
(ii) an "Ownership Change" with respect to the
Corporation shall be deemed to have occurred at such time as
any person together with any of its Affiliates or Associates
(as defined herein) becomes the beneficial owner, directly or
indirectly, of more than thirty percent (30%) of the
outstanding voting stock of the Corporation pursuant to a
transaction that does not constitute a Corporate Change with
respect to the Corporation. An "Affiliate" of a specified
person is a person that directly or indirectly controls, or is
controlled by, or is under common control with, the person
specified. An "Associate" of a person means (1) any
corporation or organization, other than the Corporation or any
subsidiary of the Corporation, of which the person is an
officer or partner or is, directly or indirectly, the
beneficial owner of ten percent (10%) or more of any class of
equity securities; (2) any trust or estate in which the person
has a substantial beneficial interest or as to which the
person serves as trustee or in a similar fiduciary capacity;
and (3) any relative or spouse of the person, or any relative
of the spouse, who has the same home as the person or who is a
director or officer of the person or any of its parents or
subsidiaries. As used herein, a person shall be deemed to
have "beneficial ownership" with respect to, and shall be
deemed to "beneficially own," any securities of the
Corporation in accordance with Section 13 of the Securities
Exchange Act of 1934, as amended, and the rules and
regulations (including Rule 13d-3, Rule 13d-5 and any
successor rules) promulgated by the Securities and Exchange
Commission thereunder; provided that a person shall be deemed
to have beneficial ownership of all securities that any such
person has a right to acquire whether such right is
exercisable immediately or only after the passage of time and
without regard to the 60-day limitation referred to in Rule
13d-3;

(iii) the "Adjusted Value" of a share of Series A
Preferred Stock is an amount equal to the Stated Value;
provided, however, that if the Reference Value of a share of
Common Stock exceeds both the Market Value of a share of
Common Stock and the Applicable Value, then the Adjusted Value
shall be determined by multiplying the greater of the Market
Value of a share of Common Stock and the Applicable Value by
the quotient of the Stated Value of a share of Series A
Preferred Stock divided by the Reference Value per share of
Common Stock;

(iv) the "Applicable Value" shall be an amount
equal to the sum of the cash, Market Value of Marketable Stock
and the value of any other securities, property or other
consideration distributed to holders of Common Stock for each
share of Common Stock upon or in connection with a Corporate
Change;

(v) the "Market Value" of the Common Stock, or of
the common stock of the corporation that is the successor to
all or substantially all of the business and assets of the
Corporation as the result of a Corporate Change, shall be the
average of the closing market price of such Common Stock or
other common stock, as the case may be, for the five business
days ending on the last business day preceding the date of the
Ownership Change or Corporate Change;

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<PAGE> 20
(vi) "Marketable Stock" shall mean the Common Stock
of the Corporation, or common stock of any corporation that is
the successor to all or substantially all of the business and
Stock exceeds the exercise price of the Warrant; and

(vii) "Stated Value" of a share of Series A
Preferred Stock converted during the 45-day period following
the occurrence of a Corporate Change or an Ownership Change
shall mean the price per share the Corporation would be
required to pay if it exercised its option to redeem such
shares on the Conversion Date plus an amount equal to the
amount by which the Market Value of the Common Stock exceeds
the exercise price of the Warrant; and

(viii) "Reference Value" shall initially mean $1.92
per share of Common Stock; provided, however, that in the
event of any adjustment to the Conversion Price, the Reference
Value shall also be adjusted so that the ratio of the
Reference Value to the Conversion Price, after giving effect
to any such adjustment, shall always be the same as the ratio
of $1.92 to the initial Conversion Price.

8. Reacquired Shares

Any shares of Series A Preferred Stock redeemed, converted,
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares upon their cancellation shall
become authorized but unissued shares of Preferred Stock without
designation as to series and may thereafter be reissued as part of a
new series of Preferred Stock to be created by resolution of the Board
of Directors, but not as shares of Series A Preferred Stock.

9. Outstanding Shares

For purposes hereof, all shares of Series A Preferred Stock
shall be deemed outstanding except (i) from any Redemption Date as
defined in Section 5, all shares of Series A Preferred Stock that have
been called for redemption on that Redemption Date; (ii) from the date
of surrender of certificates representing shares of Series A Preferred
Stock, all shares of Series A Preferred Stock voluntarily converted
into Common Stock; (iii) from the effective date of any automatic
conversion, all shares of Series A Preferred Stock; and (iv) from the
date of registration of transfer, all shares of Series A Preferred
Stock held of record by the Corporation or any subsidiary of the
Corporation.

C. Common Stock

1. Dividends. Subject to the provisions of this
Certificate of Incorporation relating to any series of Preferred Stock
or any Preferred Stock Series Resolution, the Board of Directors may,
in its discretion, out of funds legally available for the payment of
dividends and at such times and in such manner as determined by the
Board of Directors, declare and pay dividends on the Common Stock of
the Corporation.

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<PAGE> 21
No dividend (other than a dividend in capital stock ranking on
a parity with the Common Stock or cash in lieu of fractional shares
with respect to such stock dividend) shall be declared or paid on any
share or shares of any class of stock or series thereof ranking on a
parity with the Common Stock in respect of payment of dividends for
any dividend period unless there shall have been declared, for the
same dividend period, like proportionate dividends on all shares of
Common Stock then outstanding.

2. Liquidation. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, after payment or provision for payment of the debts and
other liabilities of the corporation and payment or setting aside for
payment of any preferential amount due to the holders of any other
class or series of stock, the holders of the Common Stock shall be
entitled to receive ratably any or all assets remaining to be paid or
distributed.

3. Voting Rights. Subject to any special voting rights
of any series of Preferred Stock, the holders of the Common Stock of
the corporation shall be entitled at all meetings of stockholders to
one vote for each share of such stock held by them.

D. Prior, Parity or Junior Stock

Whether reference is made in this Article Fourth to shares "ranking
prior to" another class of stock or "on a parity with" another class of stock,
such reference shall mean and include all other shares of the corporation in
respect of which the rights of the holders thereof as to the payment of
dividends or as to distributions in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation are
given preference over, or rank on an equality with, as the case may be, the
rights of the holders of such other class of stock. Whenever reference is made
to shares "ranking junior to" another class of stock, such reference shall mean
and include all shares of the Corporation in respect of which the rights of the
holders thereof as to the payment of dividends and as to distributions in the
event of a voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation are junior and subordinate to the rights of the
holders of such class of stock.

Except as otherwise provided herein or in any Preferred Stock Series
Resolution, each series of Preferred Stock ranks on a parity with each other
and each ranks prior to the Common Stock. Common Stock ranks junior to
Preferred Stock.

V. The names and mailing addresses of the current directors of the
Corporation are:

Name Address

U.E. Patrick 301 West Michigan Avenue
Jackson, MI 49201

Walter G. Goodrich 333 Texas Street
Suite 1350

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Shreveport, LA 71101

The number of directors of the Corporation shall be as specified in,
or determined in the manner provided in, the bylaws. Election of
directors need not be by written ballot.

VI. In furtherance of, and not in limitation of, the powers conferred by
statute, the Board of Directors is expressly authorized to adopt,
amend or repeal the bylaws of the Corporation.

VII. Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the
application in a summary way of the Corporation or of any creditor or
stockholder thereof or on the application of any receiver or receivers
appointed for the Corporation under the provisions of Section 291 of
Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the
said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or
of the stockholders or class of stockholders of the Corporation, as
the case may be, agree to any compromise or arrangement and to any
reorganization of the Corporation as a consequence of such compromise
or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, or
the Corporation, as the case may be, and also on the Corporation.

VIII. To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or may hereafter be amended, a director of the
Corporation shall not be liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director.

IX. All actions which are required to be or may be taken by the
stockholders of the Corporation shall be taken at a meeting of the
stockholders, duly held and upon proper notice, may not be taken by
written consent without a meeting, and the power of stockholders to
consent in writing to the taking of any action is specifically denied.

X. The Corporation shall have the right, subject to any express
provisions or restrictions contained in the certificate of
incorporation or bylaws of the Corporation, from time to time, to
amend the certificate of inCorporation or any provision thereof in any
manner now or hereafter provided by law, and all rights and powers of
any kind conferred upon a director or stockholder of the Corporation
by the certificate of incorporation or any amendment thereof are
subject to such right of the corporation.

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BYLAWS

GOODRICH PETROLEUM CORPORATION

DELAWARE CORPORATION
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
ARTICLE I. OFFICES
Section 1. Registered Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Other Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II. STOCKHOLDERS
Section 1. Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Quorum; Adjournment of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 5. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 6. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 7. Stock List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 8. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 9. Voting; Elections; Inspectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 10. Conduct of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 11. Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 12. Action Without Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 13. Nominations for Election as a Director . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE III. BOARD OF DIRECTORS
Section 1. Power; Number; Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3. Place of Meetings; Order of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4. First Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5. Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 8. Vacancies; Increases in the Number of Directors . . . . . . . . . . . . . . . . . . . . . . . 8
Section 9. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 10. Action Without a Meeting; Telephone Conference Meeting . . . . . . . . . . . . . . . . . . . 9
Section 11. Approval or Ratification of Acts or Contracts by Stockholders . . . . . . . . . . . . . . . . 9

ARTICLE IV. COMMITTEES
Section 1. Designation; Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2. Procedure; Meetings; Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3. Substitution of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

</TABLE>

i
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<TABLE>
<S> <C> <C>
ARTICLE V. OFFICERS
Section 1. Number, Titles and Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2. Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5. Powers and Duties of the Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . 11
Section 6. Powers and Duties of the Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . 11
Section 7. Powers and Duties of the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8. Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9. Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 10. Assistant Treasurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 11. Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 12. Assistant Secretaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 13. Action with Respect to Securities of Other Corporations . . . . . . . . . . . . . . . . . . 13

ARTICLE VI. INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
Section 1. Right to Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2. Indemnification of Employees and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3. Right of Claimant to Bring Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4. Nonexclusivity of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6. Savings Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE VII. CAPITAL STOCK
Section 1. Certificates of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2. Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3. Ownership of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4. Regulations Regarding Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5. Lost or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE VIII. MISCELLANEOUS PROVISIONS
Section 1. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2. Corporate Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3. Notice and Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4. Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5. Facsimile Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6. Reliance upon Books, Reports and Records . . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE IX. AMENDMENTS

</TABLE>

ii
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DELAWARE BYLAWS

GOODRICH PETROLEUM CORPORATION

ARTICLE I

OFFICES

Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.

Section 2. Other Offices. The Corporation may also have offices
at such other places both within and without the State of Delaware as the Board
of Directors may from time to time determine or the business of the Corporation
may require.

ARTICLE II

STOCKHOLDERS

Section 1. Place of Meetings. All meetings of the stockholders
shall be held at the principal office of the Corporation, or at such other
place within or without the State of Delaware as shall be specified or fixed in
the notices or waivers of notice thereof.

Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, the holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at any meeting of stockholders for the transaction of
business and the act of a majority of such stock so represented at any meeting
of stockholders at which a quorum is present shall constitute the act of the
meeting of stockholders. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.

Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock, present in person or represented
by proxy, at any meeting of stockholders, whether or not a quorum is present,
shall have the power to adjourn such meeting from time to time, without any
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of
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record entitled to vote at such meeting. At such adjourned meeting at
which a quorum shall be present or represented any business may be transacted
which might have been transacted at the meeting as originally called.

Section 3. Annual Meetings. An annual meeting of the
stockholders, for the election of directors to succeed those whose terms expire
and for the transaction of such other business as may properly come before the
meeting, shall be held on such date, and at such time as the Board of Directors
shall fix and set forth in the notice of the meeting, which date shall be
within thirteen (13) months subsequent to the last annual meeting of
stockholders. At the annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the annual
meeting. To be properly brought before the annual meeting of stockholders,
business must be (i) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (ii) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors, or (iii) otherwise properly brought before the meeting by a
stockholder of the Corporation who is a stockholder of record at the time of
giving of notice provided for in this Section 3, who shall be entitled to vote
at such meeting and who complies with the notice procedures set forth in this
Section 3. For business to be properly brought before an annual meeting by a
stockholder, the stockholder, in addition to any other applicablerequirements,
must have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than ninety (90) days prior to the anniversary date of the immediately
preceding annual meeting of stockholders of the Corporation. A stockholder's
notice to the Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting: (a) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (b) the name and address, as
they appear on the Corporation's books, of the stockholder proposing such
business, (c) the class and number of shares of voting stock of the Corporation
which are beneficially owned by the stockholder, (d) a representation that the
stockholder intends to appear in person or by proxy at the meeting to bring the
proposed business before the annual meeting, and (e) a description of any
material interest of the stockholder in such business. Notwithstanding anything
in these bylaws to the contrary, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in this Section 3.
The presiding officer of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 3, and if
he should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.

Notwithstanding the foregoing provisions of this Section 3, a
stockholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Section 3.

Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors.
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Section 5. Record Date. For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders,
or any adjournment thereof, or entitled to express consent to corporate action
in writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.

If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If, in
accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.

A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.

Section 6. Notice of Meetings. Written notice of the place, date
and hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.

Section 7. Stock List. A complete list of stockholders entitled
to vote at any meeting of stockholders, arranged in alphabetical order for
each class of stock and showing the address of each such stockholder and the
number of shares registered in the name of such stockholder, shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.

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Section 8. Proxies. Each stockholder entitled to vote at a
meeting of stockholders or to express consent or dissent to a corporate action
in writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting. All
proxies shall be received and taken charge of and all ballots shall be received
and canvassed by the secretary of the meeting who shall decide all questions
touching upon the qualification of voters, the validity of the proxies, and the
acceptance or rejection of votes, unless an inspector or inspectors shall have
been appointed by the chairman of the meeting, in which event such inspector or
inspectors shall decide all such questions.

No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.

Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy so attending shall be entitled to exercise such powers in respect of
the same portion of the shares as he is of the proxies representing such
shares.

Section 9. Voting; Elections; Inspectors. Unless otherwise
required by law or provided in the Certificate of Incorporation, each
stockholder shall have one vote for each share of stock entitled to vote which
is registered in his name on the record date for the meeting. Shares registered
in the name of another corporation, domestic or foreign, may be voted by such
officer, agent or proxy as the bylaw (or comparable instrument) of such
corporation may prescribe, or in the absence of such provision, as the Board of
Directors (or comparable body) of such corporation may determine. Shares
registered in the name of a deceased person may be voted by his executor or
administrator, either in person or by proxy.

All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.

At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability. Such
inspector shall receive the ballots, count the votes and make and sign a
certificate of the result

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thereof. The chairman of the meeting may appoint any person to serve as
inspector, except no candidate for the office of director shall be appointed as
an inspector.

Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.

Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:

(a) Calling of meeting to order.

(b) Election of a chairman and the appointment of a
secretary if necessary.

(d) Presentation and examination of proxies and
determination of a quorum.

(e) Reading and settlement of the minutes of the
previous meeting.

(f) Reports of officers and committees.

(g) The election of directors if an annual meeting, or a
meeting called for that purpose.

(h) Unfinished business.

(i) New business.

(j) Adjournment.

Section 11. Treasury Stock. The Corporation shall not vote,
directly or indirectly, shares of its own stock owned by it and such shares
shall not be counted for quorum purposes.

Section 12. Action Without Meeting. Unless otherwise provided in
the Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior

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notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by all of the holders of outstanding
stock entitled to vote thereon.

Section 13. Nominations for Election as a Director. Only persons
who are nominated in accordance with the procedures set forth in these bylaws
shall be eligible for election by stockholders as, and to serve as, directors.
Nominations of persons for election to the Board of Directors of the
Corporation may be made at a meeting of stockholders (a) by or at the direction
of the Board of Directors or (b) by any stockholder of the Corporation who is a
stockholder of record at the time of giving of notice provided for in this
Section 13, who shall be entitled to vote for the election of directors at the
meeting and who complies with the notice procedures set forth in this Section
13. Such nominations, other than those made by or at the direction of the Board
of Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
Corporation (i) with respect to an election to be held at the annual meeting of
the stockholders of the Corporation, not less than ninety (90) days prior to
the anniversary date of the immediately preceding annual meeting of
stockholders of the Corporation, and (ii) with respect to an election to be
held at a special meeting of stockholders of the Corporation for the election
of directors not later than the close of business on the tenth (10th) day
following the day on which notice of the date of the special meeting was mailed
to stockholders of the Corporation as provided in these bylaws or public
disclosure of the date of the special meeting was made, whichever first occurs.
Such stockholder's notice to the Secretary shall set forth (x) as to each
person whom the stockholder proposes to nominate for election or re-election as
a director, all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is
otherwise required, pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (including such person's written consent to being named
in the proxy statement as a nominee and to serve as a director if elected), and
(y) as to the stockholder giving the notice (i) the name and address, as they
appear on the Corporation's books, of such stockholder and (ii) the class and
number of shares of voting stock of the Corporation which are beneficially
owned by such stockholder. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee. In the event
that a person is validly designated as a nominee to the Board of Directors in
accordance with the procedures set forth in this Section 13 and shall
thereafter become unable or unwilling to stand for election to the Board of
Directors, the Board of Directors or the stockholder who proposed such nominee,
as the case may be, may designate a substitute nominee. Other than directors
chosen pursuant to the provisions of Article III, Section 8, no person shall be
eligible to serve as a director of the Corporation unless nominated in
accordance with the procedures set forth in this Section 13. The presiding
officer of the meeting of stockholders shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with
the procedures prescribed by these bylaws, and if he should so determine, he
shall so declare to the meeting and the defective nomination shall be
disregarded. Notwithstanding the foregoing provisions of this Section 13, a
stockholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Section 13.

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ARTICLE III

BOARD OF DIRECTORS

Section 1. Power; Number; Term of Office. The business and
affairs of the Corporation shall be managed by or under the direction of the
Board of Directors, and subject to the restrictions imposed by law or the
Certificate of Incorporation, they may exercise all the powers of the
Corporation.

The number of directors which shall constitute the whole Board of
Directors, shall be no less than six and no more than twelve, as determined
from time to time by resolution of the Board of Directors (provided that no
decrease in the number of directors which would have the effect of shortening
the term of an incumbent director may be made by the Board of Directors). If
the Board of Directors makes no such determination, the number of directors
shall be the number set forth in the Certificate of Incorporation. Each
director shall hold office for the term for which he is elected, and until his
successor shall have been elected and qualified or until his earlier death,
resignation or removal.

The Board of Directors shall be divided into three classes: Class I,
Class II and Class III. The number of directors in each class shall be the
whole number contained in the quotient arrived at by dividing the authorized
number of Directors by three and if a fraction is also contained in such
quotient and if such fraction is one-third, the extra Director shall be a
member of Class III, and if the fraction is two-thirds, one extra Director
shall be a member of Class III and the other shall be a member of Class II.
Except as otherwise provided in this Section 1, each Director elected at an
annual meeting shall serve for a term ending on the third annual meeting
following the meeting at which such Director was elected; provided, however,
that the Directors first elected to Class I shall serve for a term ending at
the annual meeting in 1996, the Directors first elected to Class II shall serve
for a term ending at the annual meeting in 1997 and the Directors first elected
to Class III shall serve for a term ending at the annual meeting in 1998. The
foregoing notwithstanding, each Director shall serve until his successor shall
have been duly elected and qualified or until his earlier death, resignation or
removal. If for any reason the number of Directors in the various classes shall
not conform with the formula set forth in this Section, the Board of Directors
may redesignate any Director in a different class in order that the balance of
Directors in such class shall conform thereto; provided, however, that no such
redesignation may have the effect of reducing the term to which a Director was
elected.

Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.

Section 2. Quorum. Unless otherwise provided in the Certificate
of Incorporation, a majority of the total number of directors shall constitute
a quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.

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Section 3. Place of Meetings; Order of Business. The directors
may hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of Directors
business shall be transacted in such order as shall from time to time be
determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.

Section 4. First Meeting. Each newly elected Board of Directors
may hold its first meeting for the purpose of organization and the transaction
of business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.

Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.

Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.

Section 7. Removal. Any director or the entire Board of
Directors may be removed, with or without cause, by the holders of a majority
of the shares then entitled to vote at an election of directors; provided that,
unless the Certificate of Incorporation otherwise provides, if the Board of
Directors is classified, then the stockholders may effect such removal only for
cause; and provided further that, if the Certificate of Incorporation expressly
grants to stockholders the right to cumulate votes for the election of
directors and if less than the entire board is to be removed, no director may
be removed without cause if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
Board of Directors, or, if there be classes of directors, at an election of the
class of directors of which such director is a part.

Section 8. Vacancies; Increases in the Number of Directors.
Unless otherwise provided in the Certificate of Incorporation, vacancies and
newly created directorships resulting from any increase in the authorized
number of directors may be filled by a majority of the directors then in
office, although less than a quorum, or a sole remaining director; and any
director so chosen shall hold office until the next annual election and until
his successor shall be duly elected and shall qualify, unless sooner displaced.

If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for

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which such directors shall have been chosen, and until their successors shall
be duly elected and shall qualify.

Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.

Section 10. Action Without a Meeting; Telephone Conference
Meeting. Unless otherwise restricted by the Certificate of Incorporation, any
action required or permitted to be taken at any meeting of the Board of
Directors, or any committee designated by the Board of Directors, may be taken
without a meeting if all members of the Board of Directors or committee, as the
case may be consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board of Directors or committee. Such
consent shall have the same force and effect as a unanimous vote at a meeting,
and may be stated as such in any document or instrument filed with the
Secretary of State of Delaware.

Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee designated by the Board of Directors,
may participate in a meeting of such Board of Directors or committee, as the
case may be, by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.

Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.

ARTICLE IV

COMMITTEES

Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers

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and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.

Section 2. Procedure; Meetings; Quorum. Any committee designated
pursuant to Section 1 of this Article shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of
Directors when requested, shall fix its own rules or procedures, and shall meet
at such times and at such place or places as may be provided by such rules, or
by resolution of such committee or resolution of the Board of Directors. At
every meeting of any such committee, the presence of a majority of all the
members thereof shall constitute a quorum and the affirmative vote of a
majority of the members present shall be necessary for the adoption by it of
any resolution.

Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.

ARTICLE V

OFFICERS

Section 1. Number, Titles and Term of Office. The officers of
the Corporation shall be a President, one or more Vice Presidents (any one or
more of whom may be designated Executive Vice President or Senior Vice
President), a Treasurer, a Secretary and, if the Board of Directors so elects,
a Chairman of the Board and such other officers as the Board of Directors may
from time to time elect or appoint. Each officer shall hold office until his
successor shall be duly elected and shall qualify or until his death or until
he shall resign or shall have been removed in the manner hereinafter provided.
Any number of offices may be held by the same person, unless the Certificate of
Incorporation provides otherwise. Except for the Chairman of the Board, if any,
no officer need be a director.

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Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.

Section 3. Removal. Any officer or agent elected or appointed by
the Board of Directors may be removed, either with or without cause, by the
vote of a majority of the whole Board of Directors at a special meeting called
for the purpose, or at any regular meeting of the Board of Directors, provided
the notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election or
appointment of an officer or agent shall not of itself create contract rights.

Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.

Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.

Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.

Section 7. Powers and Duties of the President. Unless the Board
of Directors otherwise determines, the President shall have the authority to
agree upon and execute all leases, contracts, evidences of indebtedness and
other obligations in the name of the Corporation; and, unless the Board of
Directors otherwise determines, he shall, in the absence of the Chairman of the
Board or if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.

Section 8. Vice Presidents. In the absence of the President, or
in the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform the duties of the President, and when so
acting shall have all the powers of and be subject to all the restrictions upon
the President. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the

-11-
<PAGE> 15
Corporation shall so act. The Vice Presidents shall perform such other duties
and have such other powers as the Board of Directors may from time to time
prescribe.

Section 9. Treasurer. The Treasurer shall have responsibility
for the custody and control of all the funds and securities of the Corporation,
and he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors. He
shall perform all acts incident to the position of Treasurer, subject to the
control of the chief executive officer and the Board of Directors; and he
shall, if required by the Board of Directors, give such bond for the faithful
discharge of his duties in such form as the Board of Directors may require.

Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Treasurers shall exercise the powers of the Treasurer
during that officer's absence or inability or refusal to act.

Section 11. Secretary. The Secretary shall keep the minutes of
all meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books and
stock ledgers, and such other books and papers as the Board of Directors may
direct, all of which shall at all reasonable times be open to inspection of any
director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.

Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the Secretary
during that officer's absence or inability or refusal to act.

Section 13. Action with Respect to Securities of Other
Corporations. Unless otherwise directed by the Board of Directors, the chief
executive officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.

-12-
<PAGE> 16
ARTICLE VI

INDEMNIFICATION OF DIRECTORS,

OFFICERS, EMPLOYEES AND AGENTS

Section 1. Right to Indemnification. Each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she or a person of whom he or she is the legal representative, is or was or has
agreed to become a director or officer of the Corporation or is or was serving
or has agreed to serve at the request of the Corporation as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director or officer or in any other capacity while
serving or having agreed to serve as a director or officer, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended, (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment) against all expense, liability and loss (including without
limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to serve in the capacity which initially entitled
such person to indemnity hereunder and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that the Corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Corporation.
The right to indemnification conferred in this Article VI shall be a contract
right and shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a current, former or proposed director or
officer in his or her capacity as a director or officer or proposed director or
officer (and not in any other capacity in which service was or is or has been
agreed to be rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in advance of the
final disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.

Section 2. Indemnification of Employees and Agents. The
Corporation may, by action of its Board of Directors, provide indemnification
to employees and agents of the Corporation, individually or as a group, with
the same scope and effect as the indemnification of directors and officers
provided for in this Article.

-13-
<PAGE> 17
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.

Section 4. Nonexclusivity of Rights. The right to
indemnification and the advancement and payment of expenses conferred in this
Article VI shall not be exclusive of any other right which any person may have
or hereafter acquire under any law (common or statutory), provision of the
Certificate of Incorporation of the Corporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.

Section 5. Insurance. The Corporation may maintain insurance, at
its expense, to protect itself and any person who is or was serving as a
director, officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.

Section 6. Savings Clause. If this Article VI or any portion
hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless indemnify and hold
harmless each director and officer of the Corporation, as to costs, charges and
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative to the full extent permitted by any
applicable portion of this Article VI that shall not have been invalidated and
to the fullest extent permitted by applicable law.

Section 7. Definitions. For purposes of this Article, reference
to the "Corporation" shall include, in addition to the Corporation, any
constituent corporation (including any constituent of a constituent) absorbed
in a consolidation or merger prior to (or, in the case of an entity
specifically designated in a resolution of the Board of Directors, after) the
adoption hereof and which, if its

-14-
<PAGE> 18
separate existence had continued, would have had the power and authority to
indemnify its directors, officers and employees or agents, so that any person
who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Article with respect to the resulting or
surviving corporation as he would have with respect to such constituent
corporation if its separate existence had continued.

ARTICLE VII

CAPITAL STOCK

Section 1. Certificates of Stock. The certificates for shares of
the capital stock of the Corporation shall be in such form, not inconsistent
with that required by law and the Certificate of Incorporation, as shall be
approved by the Board of Directors. The Chairman of the Board (if any),
President or a Vice President shall cause to be issued to each stockholder one
or more certificates, under the seal of the Corporation or a facsimile thereof
if the Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless be issued by
the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue. The stock certificates shall
be consecutively numbered and shall be entered in the books of the Corporation
as they are issued and shall exhibit the holder's name and number of shares.

Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

Section 3. Ownership of Shares. The Corporation shall be
entitled to treat the holder of record of any share or shares of capital stock
of the Corporation as the holder in fact thereof and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.

-15-
<PAGE> 19
Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.

Section 5. Lost or Destroyed Certificates. The Board of
Directors may determine the conditions upon which a new certificate of stock
may be issued in place of a certificate which is alleged to have been lost,
stolen or destroyed; and may, in their discretion, require the owner of such
certificate or his legal representative to give bond, with sufficient surety,
to indemnify the Corporation and each transfer agent and registrar against any
and all losses or claims which may arise by reason of the issue of a new
certificate in the place of the one so lost, stolen or destroyed.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1. Fiscal Year. The fiscal year of the Corporation shall
be such as established from time to time by the Board of Directors.

Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall have
charge of the seal (if any). If and when so directed by the Board of Directors
or a committee thereof, duplicates of the seal may be kept and used by the
Treasurer or by the Assistant Secretary or Assistant Treasurer.

Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be deemed to be sufficient if
given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of
the same in a post office box in a sealed prepaid wrapper addressed to the
person entitled thereto at his post office address, as it appears on the
records of the Corporation, and such notice shall be deemed to have been given
on the day of such transmission or mailing, as the case may be.

Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the Certificate
of Incorporation or the bylaws.

-16-
<PAGE> 20
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.

Section 5. Facsimile Signatures. In addition to the provisions
for the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.

Section 6. Reliance upon Books, Reports and Records. Each
director and each member of any committee designated by the Board of Directors
shall, in the performance of his duties, be fully protected in relying in good
faith upon the books of account or reports made to the Corporation by any of
its officers, or by an independent certified public accountant, or by an
appraiser selected with reasonable care by the Board of Directors or by any
such committee, or in relying in good faith upon other records of the
Corporation.

ARTICLE IX

AMENDMENTS

If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.

-17-

<PAGE> 1

CONSULTING SERVICES AGREEMENT

THIS AGREEMENT, effective October 20, 1995, is by and between Leo E. Bromberg
("Consultant") and Goodrich Petroleum Corporation ("Company") of 5847 San
Felipe, Suite 700, Houston, Texas 77057.

WHEREAS, the parties hereto desire to confirm in writing their agreement
concerning consulting services that may be provided by Consultant for the
Company.

NOW, THEREFORE, in consideration of the mutual promises and agreements herein
contained, including the recital set forth above, the parties hereto agree as
follows:

1. The term of this agreement shall be for five (5) years, commencing on
the effective date hereof; provided, however, either party shall have
the right to terminate this agreement on any anniversary date by
giving the other party at least thirty (30) days prior written notice
of the intent to terminate this agreement.

2. Consultant agrees to provide consulting services concerning the
evaluation of hydrocarbon acquisitions and the raising of all equity
sums necessary to affect such acquisitions without commission.
Consultant shall use his efforts and contacts to assist the Company
with the acquisition of participation interest in foreign oil and gas
concessions. Consultant shall also provide service and advise
concerning financing transactions, investor relations and all other
related matters to the Company during the term of this Agreement for
which the Consultant can be of benefit to the Company from his
experience in the oil and gas industry. The Company will pay to
Consultant the annual sum of One Hundred and Twenty Thousand Dollars
($120,000), payable in equal monthly installments, as a consulting fee
for such services.

3. Consultant shall be directed by the Board of Directors and executive
officers of the Company.

4. Consultant agrees to spend at least fifty percent (50%) of his working
time on behalf of the Company. The Company and Consultant shall agree
in advance to a schedule for services to be performed. The Company
and Consultant will use their best efforts to adhere to such schedule
or in the event of the need to modify such schedule at a later date,
Consultant will notify the Company for approval.

5. Consultant shall perform all consulting assignments on a best-efforts
basis.
<PAGE> 2
6. Consultant shall be reimbursed by the Company for any reasonable
expenses incurred by Consultant in the performance of the consulting
services contemplated by this Agreement. Such expenses may include,
but are not limited to, hotel accommodations, airfare, meals, auto
rental, taxis and supplies.

7. To the extent and in the manner deemed appropriate by the Company, the
Company agrees that Consultant may be supported by the Company through
the assistance of various Company employees (e.g., secretarial and
spreadsheet capability) in order to perform the consulting services
most efficiently.

8. In the performance of this Agreement, Consultant may have access to
private and confidential information owned or controlled by the
Company. Such private and confidential information includes, but is
not limited to, the terms of any agreement between the Company and any
other participant or participants involved in the business of
developing, drilling, producing or marketing hydrocarbons, information
relating to any drilling or acquisition prospect, and any operating or
performance information of the Company (all of the above information
is collectively referred to as the "Confidential Information").
Consultant recognizes and agrees that all such Confidential
Information is and shall remain the property of the Company. All
information or data acquired by Consultant under this Agreement shall
be and remain the Company's exclusive property, or the property of
other participants or joint venturers of the Company or other third
parties, as the case may be. Consultant shall keep any and all
Confidential Information confidential, and shall not publish or
disclose any Confidential Information or data to others without the
Company's prior written approval. Consultant shall not use for its
benefit or for the benefit of others, any Confidential Information.
Upon the expiration or termination of this Agreement, Consultant shall
promptly return all Confidential Information and all documents and all
other materials embodying or constituting any of the Confidential
Information (and all copies thereof) to the Company. All obligations
of confidentiality shall survive any expiration or termination of this
Agreement unless otherwise agreed by the Company and Consultant.
Nothing herein shall limit Consultant's use or dissemination of
information or data not actually derived directly or indirectly from
the Company or any information or data that was made public by the
Company prior to Consultant's use or dissemination thereof.

9. Consultant shall perform all consulting services contemplated by this
Agreement as an independent contractor.

10. The laws of the State of Texas will govern the interpretation,
validity and effect of this Agreement.

-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties have executed this Agreement on this
20th day of October, 1995.

LEO E. BROMBERG GOODRICH PETROLEUM CORPORATION
(Consultant) (Company)

/s/ LEO E. BROMBERG By: /s/ WALTER G. GOODRICH
- ------------------------------ --------------------------
Name: WALTER G. GOODRICH

Title: Chief Executive Officer

-3-

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S DOLLARS

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 182,257
<SECURITIES> 844,000
<RECEIVABLES> 1,132,440
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,440,976
<PP&E> 20,100,526
<DEPRECIATION> 2,151,979
<TOTAL-ASSETS> 25,722,406
<CURRENT-LIABILITIES> 1,878,039
<BONDS> 11,000,000
<COMMON> 7,906,090
0
1,098,710
<OTHER-SE> 3,229,096
<TOTAL-LIABILITY-AND-EQUITY> 12,233,896
<SALES> 3,696,485
<TOTAL-REVENUES> 3,696,485
<CGS> 0
<TOTAL-COSTS> 1,701,509
<OTHER-EXPENSES> (34,079)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 900,767
<INCOME-PRETAX> 1,128,288
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,128,288
<DISCONTINUED> 0
<EXTRAORDINARY> 482,906
<CHANGES> 0
<NET-INCOME> 645,382
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

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