Stockholder & Registration Rights Agreement

ATTACHMENT III


STOCKHOLDER AND REGISTRATION RIGHTS AGREEMENT


This Stockholder and Registration Rights Agreement, executed as of November 1994, between AMERICAN EXPLORATION COMPANY, a Delaware corporation ("American"), and the parties identified on the signature pages hereto as the "Holders" (each, a "Holder" and collectively, the "Holders");


W I T N E S S E T H:


WHEREAS, American is offering to purchase the Holders' (a) limited partner interests in (i) Amex Production Partnership Ltd., a Texas limited partnership ("APPL-I"), (ii) American Production Partnership-II, Ltd., a Texas limited partnership ("APPL-II"), (iii) American Production Partnership-III, Ltd., a Texas limited partnership ("APPL-III"), (iv) American Production Partnership-IV, Ltd., a Texas limited partnership ("APPL-IV"), (v) American Production Partnership-V, Ltd., a Texas limited partnership ("APPL-V") or American Production Partnership-VI, Ltd., a Texas limited partnership ("APPL-VI"), and (b) notes and net profit production payments issued by (i) Ameriplor Corp., a Delaware corporation, (ii) Ninian Oil Finance Corp., a Delaware corporation, or (iii) American Exploration Acquisition-VI Corp., a Delaware corporation (all such limited partner interests, notes and net profit production payments being collectively referred to as the "Interests"), pursuant to Offers to Purchase and Exchange Offers dated August 12, 1994 (the "Offers"); and


WHEREAS, pursuant to the Offers shares of American Common Stock, par value $.05 per share (the "Common Stock"), have been issued to the Holders in the amounts set forth opposite the Holders' names on the signature pages hereto; and


WHEREAS, American desires to provide the Holders with an opportunity to achieve liquidity in their respective investments in American by granting the Holders certain registration rights relating to the Common Stock.


NOW, THEREFORE, American and the Holders agree as follows:


1. Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below (such meanings to be equally applicable to both the singular and plural forms of the terms defined):


"American" has the meaning specified in the preamble.


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"Closing Price" means, with respect to the Common Stock, the last reported sales price of the Common Stock on the New York Stock Exchange, the American Stock Exchange, the NASDAQ National Market System or any similar system of automated dissemination of quotations of securities prices in the United States.


"Common Stock" has the meaning specified in the recitals.


"Exchange Act" means the Securities Exchange Act of 1934, as amended.


"Fundamental Change" shall mean (i) the occurrence of any transaction or event in connection with which all or substantially all of the shares of Common Stock are 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 or otherwise) or (ii) the conveyance, sale, lease, assignment, transfer or other disposal of all or substantially all of American's property, business or assets; provided, however, that a Fundamental Change shall not be deemed to have occurred by reason of the occurrence of any reverse stock split proposed by American.


"Holder" has the meaning specified in the preamble.


"Indemnified Party" has the meaning specified in Section 4(d).


"Indemnifying Party" has the meaning specified in Section 4(d).


"Initiating Holders" means any Holders who propose to have American register their Restricted Stock, which Restricted Stock shall have an aggregate market value, determined by reference to the Closing Price of the Common Stock on the date such request is received, of at least $2,000,000.


"Interests" has the meaning specified in the recitals.


"Offers" has the meaning specified in the recitals.


"person" means any individual, firm, corporation, partnership or other entity, unless the context otherwise requires.


"Requesting Holders" has the meaning specified in Section 4(b)(ii) hereof.


"Restricted Stock" means any shares of Common Stock acquired by any Holders in connection with the Offers, including any such shares acquired pursuant to Section 9 of the Offer to Purchase and Exchange Offer relating to the Offers.


"SEC" means the Securities and Exchange Commission.


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"Securities Act" means the Securities Act of 1933, as amended.


"Termination Date" has the meaning specified in Section 5(a) hereof.


2. Covenants of the Holders.


(a) Each Holder covenants and agrees that it shall not sell,
transfer any beneficial interest in, or otherwise dispose of any shares
of Restricted Stock otherwise than pursuant to (i) an effective
registration statement under the Securities Act, (ii) Rule 144 of the
general rules and regulations under the Securities Act or (iii) an
exemption from registration under the Securities Act determined to be
available in the opinion of counsel reasonably acceptable to American.


(b) All certificates representing ownership of shares of
Restricted Stock shall include the following legend until such
securities have been transferred in accordance with the provisions
hereof:


"These shares have not been registered under the Securities Act
of 1933, as amended, or any applicable state securities laws, and
such shares may not be offered, sold or otherwise transferred,
pledged or hypothecated unless and until registered or qualified
under such Act or state laws, or unless such offer, sale,
transfer, pledge or hypothecation is exempt from registration or
is otherwise in compliance with such Act or state laws."


3. Covenants of American.


Prior to the Termination Date and subject to the provisions hereof:


(a) For as long as any Holder shall continue to hold any
Restricted Stock, American shall file, on a timely basis, all annual,
quarterly and other reports required to be filed by it under Section 13
or 15(d) of the Exchange Act and the rules and regulations thereunder,
as amended from time to time.


(b) If a Fundamental Change (the date of occurrence of such
Fundamental Change being the "Fundamental Change Date") shall occur at
any time after the Expiration Date (as defined in the Offers) and the
issuance of the Initial Shares but before the issuance of the Subsequent
Shares (as such capitalized terms are defined in the Offers), each
Holder of Interests that were tendered for exchange in the Offers but
that have, at the time of such Fundamental Change Date, not been
exchanged for shares of Common Stock, shall have the right to require
that American or its successor purchase, in which event American or its
successor shall be obligated to purchase, such Interests at a purchase
price equal to the same consideration, or the cash equivalent, that such
Holder would have been entitled to receive if such shares of Common
Stock had been issued on or before the Fundamental


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Change Date (the "Purchase Price"), in accordance with the procedures
set forth in Subsections (c) and (d) of this Section; provided, however,
that such holders shall not have such right, and American or its
successor shall not have such obligation, if at the special meeting of
stockholders of American called to consider a proposal to approve the
issuance of the Subsequent Shares Stockholder Approval (as such
capitalized terms are defined in the Offers) of such proposal is not
obtained.


(c) Within 30 days following any Fundamental Change Date,
American or its successor shall send by first class mail, postage
prepaid, to each Holder of such Interests, at his address appearing in
the corporate records of American or its successor, a notice stating:


(i) that a Fundamental Change has occurred and that
such Holder has the right to require American or its successor to
purchase such Interests at the Purchase Price;


(ii) the circumstances and relevant facts regarding such
Fundamental Change;


(iii) a purchase date (the "Purchase Date"), which shall
be no fewer than 30 days nor more than 60 days from the date such
notice is mailed or if not a business day, the next following
business day;


(iv) the Purchase Price; and


(v) the place at which notice to exchange such
Interests is to be presented.


(d) Notwithstanding anything to the contrary herein, American
or its successor shall not be obligated to give notice to Holders of
such Interests or to purchase such Interests with respect to more than
one Fundamental Change.


(e) Notwithstanding anything to the contrary herein, the
purchase rights and obligations set forth in Section 3(b) and Section
3(c) with respect to any shares of Restricted Stock shall terminate and
be of no further force or effect upon the sale of such Shares pursuant
to a registered underwritten public offering of Common Stock effected
pursuant to Section 4.


4. Registration Rights.


(a) Required Registration. The Initiating Holders may request
that American effect an underwritten registration with respect to any
Restricted Stock as follows:


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(i) Request for Registration of Restricted Stock. In
the event that American shall receive from the Initiating Holders
a written request that American effect registration of an
underwritten public offering with respect to all or any part of
the Restricted Stock, American will: (A) promptly give written
notice of the proposed registration to all other Holders; and (B)
as soon as practicable use its diligent best efforts to effect
all such registration, qualification and compliance (including,
without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under
the Securities Act) as may be so requested and as would permit or
facilitate the underwritten offering of all or such portion of
such Restricted Stock as is specified in such request, together
with all or such portion of the Restricted Stock of any Holder or
Holders thereof joining in such request as are specified in a
written request given within 30 days after receipt of such
written notice from American; provided that American shall not be
obligated to take any action to effect any such registration,
qualification or compliance pursuant to this Section 4(a)(i) if:
(A) American has effected one previous registration pursuant to
this Section 4(a)(i) during the preceding twelve-month period,
(B) American has effected two previous registrations pursuant to
this Section 4(a)(i), (C) American has effected during the
preceding six-month period one previous registration statement
pursuant to any other exercise by a holder or holders of Common
Stock of demand registration rights in which the Holders were
entitled to include their Restricted Stock pursuant to Section
4(b) or (D) reputable counsel designated by American delivers an
opinion to such Initiating Holders, in form and substance
satisfactory to such Initiating Holders, to the effect that the
Restricted Stock specified in the request for registration may be
sold or distributed as planned by the Initiating Holders without
registration.


(ii) Underwriting. American shall (together with all
Holders proposing to sell their Restricted Stock in the
underwritten public offering) enter into an underwriting
agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by
American. Notwithstanding any other provision of this Section
4(a), if the representative determines, in good faith and
independent of any request by American, that marketing factors
require a limitation of the number of shares to be underwritten,
the representative may limit the number of shares of Restricted
Stock to be included in the registrat ...