Exhibit 10.27
TITAN EXPLORATION INC.
000 Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
November 6, 1997
Natural Gas Partners, L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Re: Registration Rights for Merger Shares
Gentlemen:
Reference is made to the following agreements:
(i) Registration Rights Agreement, dated as of August 30, 1996 (the
"OEDC Registration Rights Agreement"), by and among Xxxxx X. Xxxxxxxxx,
Xxxxxxx X. Xxxxxxxxxxx, Offshore Energy Development Corporation ("OEDC"),
Natural Gas Partners, L.P. ("NGP"), X. Xxxxxx Xxxxxxx, Xxxxx X. Xxxxx, Xxxxxx
Shore as Trustee of the Xxxxx Income Trust, Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxx,
Xxxxx X. Xxxxxxx, III, Xxxx X. Xxxx and Xxxxx Xxxxxx Xxxxxxxx (collectively,
such persons and their successors and assigns, together with NGP, NGP's general
partner and the individuals who are partners of such general partner and their
successors and assigns, are referred to herein as the "NGP OEDC Parties").
(ii) Registration Rights and Management Unitholders' Agreement (the
"Carrollton Registration Rights Agreement"), dated as of November 12, 1993,
among Carrollton Resources L.L.C. ("Carrollton"), Xxxx X. Xxxxxx, Xx.,
Xxxxxxxx X. Xxxxx and NGP-Louisiana Partners, L.P. ("NGP Louisiana" and
collectively with its general partner, the individuals who are partners of such
general partner and their successors and assigns, the "NGP Carrollton Parties")
(the NGP OEDC Parties and the NGP Carrollton Parties are collectively referred
to herein as the "NGP Parties");
(iii) Amended and Restated Registration Rights Agreement, dated
September 30, 1996 (the "Titan Registration Rights Agreement"), among Titan
Exploration, Inc. ("Company"), NGP, Natural Gas Partners II, L.P. ("NGP II"),
Joint Energy Development Investment Limited Partnership, First Union Corporation
and Selma International Investment Limited.
(iv) Amended and Restated Agreement and Plan of Merger (the "OEDC
Merger Agreement") dated November 6, 1997, among Titan Exploration, Inc.
("Company"), Titan Offshore, Inc. ("TOI") and OEDC; and
(v) Agreement and Plan of Merger dated November 4, 1997 (the
"Carrollton Merger Agreement" and collectively with the OEDC Merger Agreement,
the "Merger Agreements") among Titan Exploration, Inc. ("Company") Titan Bayou
Xxxxxx Holdings, Inc. ("TBB") and Carrollton; and
Pursuant to the Merger Agreements, TOI will merge with and into OEDC and
TBB will
Natural Gas Partners, L.P.
November 6, 1997
Page 2
merge with and into Carrollton and the NGP Parties will receive shares of Titan
common stock in exchange for the shares of common stock of OEDC and the units of
Carrollton currently owned by them (such shares of Titan common stock are
referred to herein as the "Merger Shares"). The Merger Shares are entitled to
certain registration rights pursuant to the terms of the OEDC Registration
Rights Agreement, the Carrollton Registration Rights Agreement and the Titan
Registration Rights Agreement.
The Company has requested that the NGP Parties agree to terminate their
registration rights for the Merger Shares under the OEDC Registration Rights
Agreement and the Carrollton Registration Agreement. In addition, NGP has been
requested to execute an OEDC Affiliate's Agreement in substantially the form set
forth as Exhibit A to the OEDC Merger Agreement and a Carrollton Affiliate's
Agreement in substantially the form set forth as Exhibit A to the Carrollton
Merger Agreement (collectively, the "Affiliate Agreements"), which Affiliate
Agreements require NGP to refrain from disposing of its Merger Shares for
certain periods following the closing of the mergers (the "Lock-up Periods"). In
order to induce the NGP Parties to agree to such requests, the Company has
offered to provide for the registration of the Merger Shares. This letter
agreement (this "Agreement"), when executed by the NGP Parties, establishes the
terms of agreement among the Company and NGP Parties with respect to the
registration of the Merger Shares.
Capitalized terms used and not defined in the Agreement shall have the
meaning set forth for such terms in the Titan Registration Agreement.
1. Registration of Shares.
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(a) The Company will prepare and file a "shelf" registration
statement on an appropriate form pursuant to Rule 415 under the Securities Act
(or any similar rule that may be adopted by the Commission) with respect to the
resale by the NGP Parties of the Merger Shares together with any securities
issued or issuable with respect to any Merger Shares by way of stock dividend,
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise (collectively with
the Merger Shares, the "Registrable Merger Securities") shall use its best
efforts to cause such registration statement to become effective not later than
180 days after the Closing Date (such registration statement, together with any
subsequent amendment of such "shelf" registration statement filed pursuant
hereto, the "Shelf Registration"). The Company shall maintain the effectiveness
of the Shelf Registration until such time as the amount of Registrable Merger
Securities held by the NGP Parties represents less than 10 percent of initial
number of Registrable Merger Securities (the "Registration Period").
(b) As to any particular Registrable Merger Securities, such
securities shall cease to be Registrable Merger Securities when such securities
(i) shall have been disposed of in accordance with the Shelf Registration,
(ii) shall be have been distributed to the public pursuant to Rule 144,
Rule 144A or Rule 145 (or any successor provision) under the Securities Act,
(iii) shall otherwise be eligible to be disposed of without registration or
qualification under the Securities Act or any similar state law then in force
and the Company or its transfer agent shall have issued in exchange for any
certificates bearing legends restricting further transfer, new certificates for
such securities
Natural Gas Partners, L.P.
November 6, 1997
Page 3
not bearing any such restrictive legends, (iv) shall no longer be owned by the
NGP Parties, or (v) shall have ceased to be outstanding.
(c) The registration of the Registrable Merger Securities shall be
effectuated in accordance with the procedures and shall be subject to the terms
and conditions applicable to a registration of Registrable Securities under
Section 2.1 of the Titan Registration Rights Agreement and all of the provisions
of the Titan Registration Rights Agreement shall be applicable to such
registration; except that, (i) the limitations in Section 2.1(e) shall not be
applicable to registration of the Registrable Merger Securities, (ii)
registration under this Agreement shall not count as one of the three demand
registration rights which are provided for Registrable Securities under
Section 2.1 of the Titan Registration Rights Agreement, and (iii) in the event
of any conflict or inconsistency between the terms of this Agreement and the
terms of the Titan Registration Rights Agreement, the terms of this Agreement
shall be controlling.
(d) The rights of the NGP Parties pursuant to this Agreement are in
addition to any registration rights which the holders of the Registrable Merger
Securities may be entitled under the terms of the Titan Registration Rights
Agreement, and accordingly, none of the terms of the Titan Registration Rights
Agreement shall be deemed to be amended or modified in any respect as a result
of this Agreement.
2. Agreement of NGP Parties.
------------------------
(a) The NGP Parties hereby agree to (i) terminate their rights to
require registration of the Registrable Merger Securities pursuant to the OEDC
Registration Rights Agreement and the Carrollton Registration Rights Agreement,
and (ii) enter into the Affiliate Agreements in substantially the form set forth
as exhibits to the Merger Agreements.
(b) NGP and Natural Gas Partners II, L.P. each agrees to waive any
right that it may have under Section 2.2 of the Titan Registration Rights
Agreement to include shares of Titan common stock, other than the Merger Shares,
in the registration of the Merger Shares pursuant hereto.
3. Specific Performance.
--------------------
The parties hereto recognize and agree than money damages may be
insufficient to compensate the parties for breaches by the other parties hereto
of the terms hereof, and, consequently, the parties hereto agree that the
equitable remedy of specific performance of the terms hereof will be available
in the event of any such breach.
4. Governing Law. This Agreement shall be construed and enforced in
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accordance with, and the rights of the parties hall be governed by, the laws of
the State of Texas.
5. Counterparts. This Agreement may be executed simultaneously in
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any number of counterparts, each of which shall be deemed an original, but all
of such counterparts shall together constitute one and the same instrument.
Natural Gas Partners, L.P.
November 6, 1997
Page 4
If the foregoing correctly sets forth the agreements among the Company
and the NGP Parties, please indicate your acceptance in the space provided for
that purpose below.
Sincerely,
Titan Exploration, Inc.
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
----------------------------
Title: President
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Accepted:
Natural Gas Partners, L.P.
By: G.F.W. Energy, L.P., its general partner
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx, Authorized Representative
X. Xxxxxx Xxxxxxx
Xxxxx X. Xxxxx
Xxxxxx Xxxxx as Trustee for the Xxxxx Income Trust
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxx III
Xxxx X. Xxxx
Xxxxx Xxxxxx Xxxxxxxx
By: Natural Gas Partners, L.P. attorney-in-fact
By: G.F.W. Energy, L.P. its general partner
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx, Authorized Representative
NGP-Louisiana Partners, L.P.
By: NGP-Louisiana Operating Corporation,
its general partner
Natural Gas Partners, L.P.
November 6, 1997
Page 5
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Vice President
Natural Gas Partners, L.P.
November 6, 1997
Page 6
The undersigned is executing this letter agreement solely for the purpose set
forth in Section 2(b) thereof.
Natural Gas Partners II, L.P.
By: G.F.W. Energy II, L.P., its general partner
BY: GFW II, L.L.C.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx, Authorized Member
