<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
Sonat Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $1.00 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
835415000
- --------------------------------------------------------------------------------
(CUSIP Number)
William N. Finnegan, IV
4200 Chase Tower
600 Travis
Houston, Texas 77002
(713) 220-4376
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
January 30, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
CUSIP NO. 835415000
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael Zilkha
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 8,594,405 shares
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
8,594,405 shares
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,594,405
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D
- Page 2 of 10 Pages -
<PAGE> 3
CUSIP NO. 835415000
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Selim K. Zilkha Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 14,429,037 shares
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
14,429,037 shares
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,429,037 shares
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.1%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO; Trust
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D
-Page 3 of 10 Pages -
<PAGE> 4
CUSIP NO. 835415000
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Selim K. Zilkha, individually and as Trustee of the Selim K. Zilkha Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 14,429,137 shares
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
14,429,137 shares
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,429,137 shares
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.1%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D
-Page 4 of 10 Pages -
<PAGE> 5
CUSIP NO. 835415000
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Selim K. Zilkha (1996) Annuity Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 1,135,038 shares
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
1,135,038 shares
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,135,038 shares
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO; Trust
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D
-Page 5 of 10 Pages-
<PAGE> 6
CUSIP NO. 835415000
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ezra Zilkha, as Trustee of the Selim K. Zilkha (1996) Annuity Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 1,135,038 shares
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
1,135,038 shares
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,135,038 shares
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D
-Page 6 of 10 Pages -
<PAGE> 7
INTRODUCTORY STATEMENT
On December 2, 1997, Michael Zilkha, the Selim K. Zilkha Trust, the
Selim K. Zilkha (1996) Annuity Trust, Selim K. Zilkha (as trustee of the Selim
K. Zilkha Trust) and Ezra Zilkha (as trustee of the Selim K. Zilkha (1996)
Annuity Trust) (collectively, the "Reporting Persons") jointly filed a Schedule
13D with the Securities and Exchange Commission with respect to the maximum
number of shares of common stock, par value $1.00 per share ("Company Common
Stock"), of Sonat Inc. (the "Company") to be acquired by the Reporting Persons
upon consummation of the merger (the "Merger") of Sonat Acquisition
Corporation, a Delaware corporation and wholly owned subsidiary of the Company
("Acquisition"), with and into Zilkha Energy Company, a Delaware corporation
("Zilkha"). At the time of filing the Schedule 13D, the Reporting Persons
filed as a "group" due to the fact that they could have been deemed to be
acting as a "group" within the meaning of Section 13(d) of the Securities
Exchange Act of 1934 for the purpose of acquiring Company Common Stock. On
January 30, 1998, the Merger was consummated, and the Reporting Persons
received the shares of Company Common Stock to which they were entitled
pursuant to the Agreement and Plan of Merger, dated as of November 22, 1997,
between the Company and Zilkha (the "Merger Agreement"), as supplemented by the
Approval of Merger Agreement, dated as of January 22, 1998, among the Company,
Acquisition and Zilkha (the "Approval of Merger Agreement"). The Reporting
Persons are not parties to any other agreements among themselves concerning the
acquisition, holding, voting or disposal of any shares of Company Common Stock
and therefore believe that, even if the Reporting Persons did become a "group"
as a result of the Merger Agreement, they ceased to be a "group" the moment
each Reporting Person received its allotted amount of Company Common Stock
pursuant to the Merger Agreement. The Reporting Persons believe that they do
not have any further "group" filing obligations in connection with the Company
Common Stock they now own. Accordingly, this Amendment No. 1 to Schedule 13D
is being filed to provide the exact number of shares of Common Stock acquired
by each of the Reporting Persons as a result of the Merger, to terminate the
Reporting Persons' status as a "group" and to update other information required
by Schedule 13D. Unless otherwise indicated, all capitalized terms used but not
defined herein have the meanings set forth in the Schedule 13D.
Except as specifically provided herein, this Amendment does not modify
any of the information previously reported on the Schedule 13D.
ITEM 2. IDENTITY AND BACKGROUND
The information required to be filed in response to paragraphs (a),
(b) and (c) of Item 2 with respect to the Reporting Persons is hereby amended
and restated in its entirety as set forth on Schedule I.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Item 3 is hereby amended and restated in its entirety as follows:
The shares of Company Common Stock being reported on in this Statement
were acquired by the Reporting Persons as a result of the consummation of the
Merger pursuant to the Merger Agreement. For a description of the Merger, see
Item 4.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 is hereby amended and supplemented to include the following:
At a special meeting of the Company's stockholders on January 30,
1998, the Company's stockholders approved the issuance of shares of Company
Common Stock in accordance with the terms of the Merger Agreement. On the same
day, the Merger was consummated, and the Reporting Persons received an
aggregate of 24,158,380 shares of Company Common Stock and cash in lieu of
fractional shares. Immediately following the effective time of the Merger,
Michael Zilkha and Selim K. Zilkha were appointed to the Board of Directors of
the Company. In addition, the Company entered into a Registration Rights
Agreement with the Zilkha Entities, a copy of which is filed as Exhibit C
hereto.
The Reporting Persons are not parties to any other agreements among
themselves concerning the acquisition, holding, voting or disposal of any
shares of Company Common Stock and therefore believe that, even if the
Reporting Persons did become a "group" as a result of the Merger Agreement,
they ceased to be a "group" the moment each Reporting Person received its
allotted amount of Company Common Stock pursuant to the Merger Agreement. The
Reporting Persons believe that they do not have any further "group" filing
obligations in connection with the Company Common Stock they now own. Michael
Zilkha and the Selim K. Zilkha Trust, each of whom owns more than 5% of the
outstanding shares of Company Common Stock, will make future required filings
under Section 13(d) of the Exchange Act individually. The Selim K. Zilkha
(1996) Annuity Trust, which owns less than 5% of the outstanding shares of
Company Common Stock, will make no further filings under Section 13(d) of the
Exchange Act unless and until required by the rules and regulations of the
Securities and Exchange Commission under the Exchange Act.
- Page 7 of 10 Pages -
<PAGE> 8
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 is hereby amended and restated in its entirety as follows:
(a) The Company reported in the Merger Agreement that it had
outstanding on September 30, 1997 an aggregate of 85,745,685 shares of Company
Common Stock. The Reporting Persons beneficially own an aggregate of
24,158,380, or approximately 22.0% of the Company's Common Stock after the
Merger. Of the 24,158,380 shares, each of Michael Zilkha, the Selim K. Zilkha
Trust and the Selim K. Zilkha (1996) Annuity Trust own 8,594,305 shares
(approximately 7.8%), 14,429,037 shares (approximately 13.1%) and 1,135,038
shares (approximately 1.0%) of Company Common Stock, respectively. Selim K.
Zilkha, as trustee of the Selim K. Zilkha Trust, and Ezra Zilkha, as trustee of
the Selim K. Zilkha (1996) Annuity Trust, are deemed to beneficially own the
shares of Company Common Stock owned by the respective trusts, since each such
individual has the sole power to vote and to dispose of such shares.
(b) The number of shares of Company Common Stock as to which there is
sole power to vote or to direct the vote, sole power to dispose or to direct
the disposition, or shared power to dispose or direct the disposition for each
Reporting Person is set forth on the cover pages of this Amendment No. 1 to
Schedule 13D, and such information is incorporated herein by reference.
(c) There have been no reportable transactions with respect to the
Company Common Stock within the last 60 days by any of the Reporting Persons
except for the acquisition of beneficial ownership of shares being reported on
this Amendment No. 1 to Schedule 13D, which includes (i) the shares of Company
Common Stock received by the Reporting Persons in exchange for the shares of
Zilkha's capital stock owned by them prior to the Merger and (ii) 100 shares of
Company Common Stock received by each of Michael Zilkha and Selim K. Zilkha in
connection with their appointment to the Board of Directors of the Company.
(d) Each of the Reporting Persons has the right to receive the
dividends from, and the proceeds from the sale of, the respective shares of
Company Common Stock reported by each such person on the cover pages of this
Amendment No. 1 to Schedule 13D.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The responses to Item 2, Item 3 and Item 4, the Merger Agreement, the
Approval of Merger Agreement and the Registration Rights Agreement are
incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following are filed herewith or incorporated by reference as
exhibits to this Amendment No. 1 to Schedule 13D:
A. Agreement and Plan of Merger, dated as of November 22, 1997,
between Zilkha Energy Company and Sonat Inc. (incorporated by
reference to Exhibit A to the Schedule 13D filed by the Reporting
Persons with the Commission on December 2, 1997).
B. Approval of Merger Agreement, dated as of January 22, 1998, among
Zilkha Energy Company, Sonat Inc. and Sonat Acquisition
Corporation.
C. Registration Rights Agreement, dated as of January 30, 1998, by
and among Sonat Inc., Selim K. Zilkha, Michael Zilkha, Selim K.
Zilkha Trust and Selim K. Zilkha (1996) Annuity Trust.
D. Joint Filing Agreement, dated as of February 2, 1998.
- Page 8 of 10 Pages -
<PAGE> 9
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 3, 1998
/s/ MICHAEL ZILKHA
--------------------------------------
Michael Zilkha
SELIM K. ZILKHA TRUST
/s/ SELIM K. ZILKHA
--------------------------------------
Selim K. Zilkha, as Trustee
/s/ SELIM K. ZILKHA
--------------------------------------
Selim K. Zilkha
SELIM K. ZILKHA (1996) ANNUITY TRUST
/s/ EZRA ZILKHA
--------------------------------------
Ezra Zilkha, as Trustee
/s/ EZRA ZILKHA
--------------------------------------
Ezra Zilkha
- Page 9 of 10 Pages -
<PAGE> 10
SCHEDULE I
<TABLE>
<CAPTION>
NAME BUSINESS ADDRESS OCCUPATION
- ---- ---------------- ----------
<S> <C> <C>
Michael Zilkha Two Houston Center Investor
909 Fannin, Suite 2910
Houston, Texas 77010
Selim K. Zilkha Trust Two Houston Center N/A
909 Fannin, Suite 2910
Houston, Texas 77010
Selim K. Zilkha, Trustee of the Two Houston Center Investor
Selim K. Zilkha Trust 909 Fannin, Suite 2910
Houston, Texas 77010
Selim K. Zilkha (1996) Annuity Two Houston Center N/A
Trust 909 Fannin, Suite 2910
Houston, Texas 77010
Ezra Zilkha, Trustee of the Selim 767 5th Avenue, Suite 4605 Investor
K. Zilkha (1996) Annuity Trust New York, New York 10153
</TABLE>
- Page 10 of 10 Pages -
<PAGE> 1
EXHIBIT B
APPROVAL OF MERGER AGREEMENT
Sonat Acquisition Corporation ("SAC"), a Delaware corporation,
a wholly owned subsidiary of Sonat Inc. ("Sonat") and one of the constituent
corporations to the merger to be effected pursuant to the Agreement and Plan of
Merger dated as of November 22, 1997 between Zilkha Energy Company and Sonat
(the "Merger Agreement"), together with Sonat and Zilkha Energy Company, have
caused this Approval of Merger Agreement to be signed as of the 22nd day of
January, 1998 in order to evidence (a) SAC's approval, adoption, certification,
execution and acknowledgment of the Merger Agreement to the same extent and
with the same force and effect as if SAC had been an original signatory to such
Merger Agreement and (b) SAC's agreement to be bound by the terms of the Merger
Agreement applicable to it.
SONAT ACQUISITION CORPORATION
By: /s/ WILLIAM A. SMITH
--------------------------------
Name: William A. Smith
Title: President
SONAT INC.
By: /s/ WILLIAM A. SMITH
--------------------------------
Name: William A. Smith
Title: Executive Vice President
ZILKHA ENERGY COMPANY
By: /s/ JOSEPH J. ROMANO
--------------------------------
Name: Joseph J. Romano
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
January 30, 1998 by and among Sonat Inc., a Delaware corporation (the
"Company"), and Selim K. Zilkha, Michael Zilkha, Selim K. Zilkha Trust and
Selim K. Zilkha (1996) Annuity Trust (collectively, the "Zilkha Entities").
Capitalized terms not otherwise defined herein have the meaning ascribed to
them in the Merger Agreement (as hereinafter defined).
WHEREAS, the Company and Zilkha Energy Company, a Delaware
corporation ("Zilkha"), have entered into an Agreement and Plan of Merger,
dated as of November 22, 1997, as supplemented by the Approval of Merger
Agreement, dated as of January 22, 1998, among the Company, Sonat Acquisition
Corporation, a wholly owned subsidiary of the Company, and Zilkha
(collectively, the "Merger Agreement"), that provides, subject to the terms and
conditions thereof, for the merger (the "Merger") of Zilkha with a wholly owned
subsidiary of the Company.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the parties hereto hereby agree as
follows:
Section 1. Definitions. As used in this Agreement, the
following capitalized terms shall have the following meanings:
"Affiliate" of any Person means any Person that controls, is
controlled by, or is under common control with such Person.
"Common Stock" means the common stock, $1.00 par value per
share, of the Company.
"Effective Time" shall have the meaning specified in the
Merger Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"NASD" means The National Association of Securities Dealers,
Inc. or any successor entity.
"Participating Purchasers" means with respect to any
Registration Statement, any Purchasers holding any Registrable Securities
covered by such Registration Statement.
<PAGE> 2
"Person" means an individual, partnership, corporation,
limited liability company, trust, unincorporated organization or other entity,
or a government or agency or political subdivision thereto.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering or any portion of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Purchaser(s)" shall mean, collectively, as the context may
require the Zilkha Entities, and shall also include any Affiliate of any Zilkha
Entities.
"Registrable Securities" means (a) any of the Securities, and
(b) any securities (of the Company or any other Person) issued or issuable
with respect to any of the Securities by way of stock dividend or stock split,
a dividend or other distribution, in connection with a combination of shares,
recapitalization, reclassification, merger, consolidation or other
reorganization or otherwise. Any Registrable Security will cease to be a
Registrable Security when (i) a registration statement covering such
Registrable Security has been declared effective by the SEC and the Registrable
Security has been disposed of pursuant to such effective registration
statement, or (ii) the Registrable Security is sold under circumstances in
which all of the applicable conditions of Rule 144 (or any similar provision
then in force) under the Securities Act are met.
"Registration Statement" means the Registration Statement of
the Company that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus included therein, all
amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated by
reference in such Registration Statement.
"Requesting Purchaser(s)" means any one or more Purchasers
holding Registrable Securities representing in the aggregate not less than 50%
of the aggregate Registrable Securities then outstanding.
"SEC" means the Securities and Exchange Commission or any
successor entity.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Securities" means any of the Common Stock held by Zilkha
Entities as of the Effective Time.
"Underwritten Registration" or "Underwritten Offering" means a
registration in which securities of the Company are sold to an underwriter for
re-offering to the public.
-2-
<PAGE> 3
Section 2. Registration Rights.
(a) Demand Registration.
(i) At any time during the five-year period
following the Effective Time, one or more Requesting
Purchasers may make a written request (the "Demand Notice")
for registration under the Securities Act (a "Demand
Registration") of any Registrable Securities (such securities
are herein referred to as "Demand Securities") held by such
Requesting Purchasers. The Demand Notice will specify the
number of Demand Securities proposed to be sold and will also
specify the intended method of disposition thereof. Once
given, a Demand Notice will be irrevocable. Following receipt
of a Demand Notice from such Requesting Purchasers, the
Company promptly will give written notice of the requested
registration to all other Purchasers, and will thereafter file
a registration statement on any appropriate form which will
cover (1) the Demand Securities that the Company has been so
requested to register by such Requesting Purchasers, (2) all
other Demand Securities that the Company has been requested to
registered by any other Purchasers by written request given to
the Company within 15 days after the Company's giving of
written notice of the Requesting Purchasers' requested
registration and (3) any other securities the Company
determines to register for its own account.
(ii) Unless the Requesting Purchasers shall
consent in writing, no party (other than the Company or any
other Purchaser) shall be permitted to offer securities under
any such Demand Registration. The Company shall not be
required to effect more than three Demand Registrations under
this Section 2(a). A registration requested pursuant to this
Section 2(a) will not be deemed to have been effected (and it
shall not count as one of the three Demand Registrations)
unless the Registration Statement relating thereto has become
effective under the Securities Act; provided, however, that
if, after such Registration Statement has become effective,
the offering of the Demand Securities pursuant to such
registration is interfered with by any stop order, injunction
or other order or requirement of the SEC or other governmental
agency or court, such registration will be deemed not to have
been effected (and it shall not count as one of the three
Demand Registrations).
(iii) If the Requesting Purchasers so elect, the
offering of Demand Securities pursuant to such registration
shall be in the form of an Underwritten Offering. If the
managing underwriter or underwriters of such offering advise
the Company and the Participating Purchasers that in their
view the number of Demand Securities requested to be included
in such offering is sufficiently large so as to materially and
adversely affect the success of such offering, the Company
will include in such registration the aggregate number of
Demand Securities which in the view of such managing
underwriter or underwriters can be sold without any such
material adverse effect; provided, however, that no Demand
Securities may be excluded before all securities proposed to
be sold by the Company and any other Person have been
excluded. If any Demand Securities are excluded, such
registration
-3-
<PAGE> 4
shall not count as one of the three Demand Registrations. If
any Demand Securities are required to be excluded pursuant to
this Section 2(a), the number of Demand Securities of each
Participating Purchaser to be included in such registration
shall be reduced pro rate (according to the total number of
Demand Securities beneficially owned by each such holder), to
the extent necessary to reduce the total number of Demand
Securities to be included in the offering to the number
recommended by such managing underwriter or underwriters.
(iv) Notwithstanding anything in this Agreement to
the contrary, the Company may postpone the filing,
effectiveness, supplementing or amending of a Registration
Statement (a "Demand Suspension Notice") for up to 90 days if,
in the good faith judgment of the Company's Board of
Directors, the registration or sale of the Demand Securities
would adversely affect a material financing, acquisition,
disposition of assets or stock, merger or other comparable
transaction or would require the Company to make public
disclosure of information the public disclosure of which would
have a material adverse effect upon the Company; provided
further, however that the Company may not give more than one
Demand Suspension Notice in any 12 month period. If the
Company shall deliver any Demand Suspension Notice with
respect to any Demand Registration, such Demand Registration
shall not be counted in determining whether the Company is
required to file more than three Demand Registrations pursuant
to this Agreement.
(b) Incidental Registration. If at any time during the
five year period following the Effective Time, the Company proposes to file a
registration statement under the Securities Act (other than in connection with
a Demand Registration or a Registration Statement on Form S-4 or S-8, or any
form that is substituting therefor or is a successor thereto) with respect to
an offering of any Common Stock for its own account, then the Company shall
give written notice of such proposed filing to all Purchasers as soon as
practicable (but in no event less than three business days before the
anticipated filing date), and such notice shall (i) offer each Purchaser the
opportunity to register such number of Registrable Securities as it may request
and (ii) describe such securities and specifying the form and manner and other
relevant facts involved in such proposed registration (including, without
limitation, whether or not such registration will be in connection with an
Underwritten Offering and, if so, the identity of the managing underwriter and
whether such Underwritten Offering will be pursuant to a "best efforts" or
"firm commitment" underwriting). Each Purchaser shall advise the Company in
writing within two business days after the date of receipt of such notice from
the Company of the number of Registrable Securities for which registration is
requested. The Company shall include in such Registration Statement all such
Registrable Securities so requested to be included therein, and, if such
registration is an Underwritten Registration, the Company shall use its best
efforts to cause the managing underwriter or underwriters to permit the
Registrable Securities requested to be included in the registration statement
for such offering to be included (on the same terms and conditions as similar
securities of the Company included therein to the extent appropriate);
provided, however, that if in the view of the managing underwriter or
underwriters of such offering the success of the offering would be materially
and adversely affected by inclusion of the Registrable Securities requested to
be included, then (I) the amount of securities to be offered for the account of
each Participating Purchaser and
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<PAGE> 5
other holders registering securities of the Company pursuant to similar
incidental registration rights shall be reduced pro rata (according to the
Registrable Securities beneficially owned by each such holder) to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such managing underwriter or
underwriters; and (II) if the actions described in clause (I) would, in the
reasonable good faith judgment of the managing underwriter, be insufficient to
substantially eliminate the adverse effect that inclusion of the Registrable
Securities requested to be included would have on such offering, such
Registration Securities will be excluded from such offering. Nothing in this
Agreement shall prevent the Company from granting any other Person or Persons
any incidental registration rights on offerings by or on behalf of the Company
from time to time.
Section 3. Hold-Back Agreements. Each Purchaser agrees,
if reasonably requested by the managing underwriters in an Underwritten
Offering to which the provisions of Section 2(b) apply, not to effect any
public sale or public distribution of securities of the Company of the same
class as the securities included in the Registration Statement relating to such
Underwritten Offering, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such Underwritten Offering), during the
10-day period prior to the filing of such Registration Statement, and during
the 90-day period beginning on the closing date of each Underwritten Offering
made pursuant to such Registration Statement, to the extent timely notified in
writing by the Company or the managing underwriters.
Section 4. Registration Procedures.
(a) In connection with the Company's registration
obligations pursuant to Section 2 hereof, the Company will use its best efforts
to effect such registration to permit the sale of such Registrable Securities
in accordance with the intended method or methods of distribution thereof, and
pursuant thereto, the Company will use its best efforts to as expeditiously as
possible:
(i) prepare and file with the SEC, as soon as
practicable, and in any event within 60 days from the date of
request (unless a shorter period is expressly set forth
herein), a Registration Statement relating to the applicable
registration on any appropriate form under the Securities Act,
which forms shall be available for the sale of the Registrable
Securities in accordance with the intended method or methods
of distribution thereof and shall include all financial
statements of the Company, and use its best efforts to cause
such Registration Statement to become effective; provided that
before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, including documents
incorporated by reference after the initial filing of the
Registration Statement, the Company will furnish each
Participating Purchaser and the underwriters, if any, copies
of all such documents proposed to be filed, which documents
will be subject to the review of the Participating Purchasers
and the underwriters, if any, and the Company will not file
any Registration Statement or amendment thereto or any
Prospectus or any supplement thereto (including such documents
incorporated by reference) to which
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<PAGE> 6
Participating Purchasers holding in the aggregate in excess of
50% of the Registrable Securities covered by such Registration
Statement or the underwriters, if any, shall reasonably
object;
(ii) prepare and file with the SEC such amendments
and post-effective amendments to the Registration Statement as
may be necessary to keep the Registration Statement effective
for the applicable period, or such shorter period which will
terminate when all Registrable Securities included in such
Registration Statement have been sold; cause the Prospectus to
be supplemented by any required Prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of all
securities included in such Registration Statement during the
applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in
such Registration Statement or supplement to the Prospectus;
the Company shall not be deemed to have used best efforts to
keep a Registration Statement effective during the applicable
period if it voluntarily takes any action that would result in
any Participating Purchaser not being able to sell its
Registrable Securities during that period unless such action
is required under applicable law;
(iii) notify each Participating Purchase and the
managing underwriters, if any, promptly, and (if requested by
any such Person) confirm such advice in writing, (1) when the
Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when
the same has become effective, (2) of any request by the SEC
for amendments or supplements to the Registration Statement or
the Prospectus or for additional information, (3) of the
issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose, (4) if at any time the
representations and warranties of the Company contemplated by
Section 4(a)(xiv) cease to be true and correct, (5) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities
for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose and (6) of the happening of
any event which makes any statement made in the Registration
Statement, the Prospectus or any document incorporated therein
by reference untrue or which requires the making of any
changes in the Registration Statement, the Prospectus or any
document incorporated therein by reference in order to make
the statements therein not misleading;
(iv) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the
Registration Statement at the earliest possible moment;
(v) if reasonably requested by the managing
underwriter or underwriters or by Participating Purchasers
holding in the aggregate in excess of 50% of the Registrable
Securities covered by the Registration Statement, promptly
incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriters and
such Participating Purchasers agree should be included
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<PAGE> 7
therein relating to the sale of the Registrable Securities,
including, without limitation, information with respect to the
number of Registrable Securities being sold to such
underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the
Underwritten Offering of the Registrable Securities to be sold
in such offering; and make all required filing of such
Prospectus supplement or post-effective amendment as soon as
notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(vi) prior to the filing of any document which is
to be incorporated by reference into the Registration
Statement or the Prospectus (after initial filing of the
Registration Statement), make available representatives of the
Company for discussion of such document and make such changes
in such document prior to the filing thereof as any
Participating Purchaser or the underwriters, if any, may
reasonable request;
(vii) furnish to each Participating Purchaser and
each managing underwriter, if any, without charge, at least
one signed copy of the Registration Statement and any
post-effective amendment thereto, including financial
statements and schedules, all documents incorporated therein
by reference and all exhibits (including those incorporated by
reference);
(viii) deliver to each Participating Purchaser and
the underwriters, if any, without charge, as many copies of
the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons may reasonable
request; the Company consents to the use of the Prospectus or
any amendment or supplement thereto by any such Purchasers and
the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by the Prospectus
or any amendment or supplement thereto;
(ix) prior to any public offering of Registrable
Securities, register or qualify or cooperate with each
Participating Purchaser, the underwriters, if any, and their
respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and
sale under the securities or blue sky laws of such
jurisdictions as any Participating Purchaser or any
underwriter reasonably requests in writing and do any and all
other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement;
(x) cooperate with the Participating Purchasers
and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any
restrictive legends; and enable such Registrable Securities to
be in such denominations and registered in such names as the
managing underwriters may request at least two (2) business
days prior to any sale of Registrable Securities to the
underwriters;
(xi) cause the Registrable Securities covered by
the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities as
may be necessary to enable each Participating Purchaser or the
underwriters, if any, to consummate the disposition of such
Registrable Securities;
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<PAGE> 8
(xii) upon the occurrence of any event contemplated
by Section 4(a)(iii)(6) hereof, prepare a supplement or
post-effective amendment to the Registration Statement or the
related Prospectus or any document incorporated therein by
reference or file any other required document so that, as
thereafter delivered to Purchasers of the Registrable
Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading;
(xiii) cause all Registrable Securities covered by
the Registration Statement to be listed on each securities
exchange on which similar securities issued by the Company are
then listed;
(xiv) enter into such agreements (including an
underwriting agreement) and take all such other actions in
connection therewith in order to expedite or facilitate the
disposition of such Registrable Securities and in connection
therewith, whether or not an underwriting agreement is entered
into and whether or not the registration is an Underwritten
Registration, (1) make such representations and warranties to
each Participating Purchaser and the underwriters, if any, in
form, substance and scope as are customarily made by issuers
to underwriters in primary underwritten offerings; (2) obtain
opinions of counsel to the Company and updates thereof (which
counsel and opinions, in form, scope and substance) shall be
reasonably satisfactory to each Participating Purchaser and
the managing underwriters, if any, covering the matters
customarily covered in opinions requested in Underwritten
Offerings and such other matters as may be reasonably
requested by any Participating Purchaser and the underwriters,
if any; (3) obtain "cold comfort" letters and updates thereof
from the Company's independent certified public accountants
addressed to each Participating Purchaser and the
underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold
comfort" letters by underwriters in connection with primary
underwritten offerings; (4) if an underwriting agreement is
entered into, the same shall set forth in full the
indemnification provisions and procedures of Section 6 hereof
with respect to all parties to be indemnified pursuant to said
underwriting agreement; and (5) deliver such documents and
certificates as may be requested by any Participating
Purchaser and the managing underwriters, if any, to evidence
compliance with clause (1) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company. The above shall be
done at each closing under such underwriting or similar
agreement or as and to the extent required thereunder;
(xv) make available for inspection by a
representative of any Participating Purchaser, any underwriter
participating in any disposition pursuant to such
registration, and any attorney or accountant retained by any
Participating Purchaser or any underwriter, all financial and
other records, pertinent corporate documents and properties of
the Company and cause the Company's officers, directors and
employees to supply all information reasonably requested by
any such representative, underwriter, attorney or accountant
in connection with such registration; provided
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<PAGE> 9
that any records, information or documents that are designated
by the Company in writing as confidential shall be kept
confidential by such Persons unless disclosure of such
records, information or documents is required by court or
administrative order;
(xvi) otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably
practicable, an earnings statement covering a period of twelve
(12) months, beginning within three months after the effective
date of the Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the
Securities Act;
(xvii) cooperate with the Participating Purchasers
and each underwriter participating in the disposition of such
Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;
(xviii) in the case of any Demand Registration which
is an Underwritten Offering, participate in customary
"roadshow" and similar marketing presentations as reasonably
requested by the underwriters (it being agreed that
representatives of the Zilkha Entities may participate in such
roadshows to the extent the underwriters determine it is
advisable for them to do so); and
(xix) take such other actions as reasonably may be
requested by the Participating Purchasers in order to effect
the applicable registration.
(b) The Company may require each Purchaser to furnish to
the Company such information regarding the distribution of Registrable
Securities as the Company may from time to time reasonably request in writing.
(c) Each Purchaser agrees by acquisition of the
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(a)(iii)(6) hereof,
such Purchaser will forthwith discontinue disposition of Registrable Securities
until such Purchaser's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 4(a)(xii) hereof, or until it is advised in
writing (the "Advice") by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings
which are incorporated by reference in the Prospectus, and, if so directed by
the Company, such Purchaser will deliver to the Company (at Company's expense),
all copies, other than permanent file copies then in such Purchaser's
possession, of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice. In the event the Company shall give any
such notice, the time periods regarding the effectiveness of Registration
Statements set forth in Section 2 hereof and Section 4(b) hereof shall be
extended by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 4(a)(iii)(6) hereof to the date
when such Purchaser shall receive copies of the supplemented or amended
Prospectus contemplated by Section 4(a)(xii) hereof or the Advice, as
applicable.
Section 5. Registration Expenses. All expenses incident
to the Company's performance of or compliance with this Agreement, including
without limitation: all registration and filing fees; fees with respect to
filings required to be made with the NASD; fees and expenses
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<PAGE> 10
of compliance with securities or blue sky laws (including fees and disbursements
of counsel for the underwriters or the Purchasers in connection with blue sky
qualifications of the Registrable Securities and determination of their
eligibility for investment under the laws of such jurisdictions as the managing
underwriters and Purchasers may designate); printing expenses, messenger,
telephone and delivery expenses; fees and disbursements of counsel for the
Company, for the underwriters and for one counsel for the Participating
Purchasers and fees and expenses for independent certified public accountants
retained by the Company (including the expenses of any comfort letters or costs
associated with the delivery by independent certified public accountants of a
comfort letter or comfort letters requested pursuant to Section 4(a)(xiv)
hereof); securities acts liability insurance, if the Company so desires; all
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties); the expense of any annual audit; the fees and expenses incurred in
connection with the listing of the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed; and the fees and expenses of any Person, including special experts,
retained by the Company (all such expenses being herein called "Registration
Expenses") will be borne by the Company regardless of whether the Registration
Statement becomes effective. The Company shall not have any obligation to pay
any underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities.
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<PAGE> 11
Section 6. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees
to indemnify and hold harmless the Zilkha Entities and each Purchaser and their
respective partners, officers, directors, employees and agents, and each Person
who controls any such Persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) against all losses, claims,
damages, liabilities and expenses arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are caused by or contained in any information furnished in writing to the
Company by the Zilkha Entities or such Purchaser, as the case may be, expressly
for use therein. The Company will also indemnify underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) to the same extent as provided above
with respect to the indemnification of the Zilkha Entities and each Purchaser,
if requested, and shall otherwise entered in such indemnification and
contribution agreements with such underwriters, selling brokers, dealer
managers and similar securities industry professionals as are then customary.
(b) Indemnification By Holder of Registrable Securities.
Each Purchaser, severally and not jointly, agrees to indemnify and hold
harmless the Company and its directors, officers, employees and agents, and
each Person who controls the Company (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) against any losses, claims,
damages, liabilities and expenses resulting from any untrue statement of a
material fact or any omission of a material fact required to be stated in the
Registration Statement or Prospectus or preliminary prospectus or necessary to
make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in any information
furnished by such Purchaser to the Company specifically for inclusion in such
Registration Statement or Prospectus. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, to the
same extent as provided above with respect to information so furnished in
writing by such Persons specifically for inclusion in any Prospectus or
Registration Statement.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder will (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(although the failure to give prompt notice shall not relieve any indemnifying
party of any obligation hereunder except to the extent such indemnifying party
is actually prejudiced by such failure) and (ii) permit such indemnifying
party to assume the defense of such claim with counsel reasonably satisfactory
to the indemnified party; provided, however, that any Person entitled to
indemnification hereunder shall have the right to employ separate counsel and
to participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such Person unless (1) the indemnifying
party has agreed to pay each fees or expenses,
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<PAGE> 12
(2) the indemnifying party shall have failed to assume the defense of such
claim and employ counsel reasonably satisfactory to such Person or (3) based
upon written advice of counsel to such Person, there shall exist conflicts of
interest pursuant to applicable rules of professional conduct between such
Person and the indemnifying party, in which case the fees and expenses of one
counsel to the indemnified parties shall be at the expense of the indemnifying
party. The indemnifying party will not be subject to any liability for any
settlement made without its consent (but such consent will not be unreasonably
withheld), but if settled with its written consent, or if there be a final
judgment for the plaintiff in any such action or proceeding, the indemnifying
party shall indemnify and hold harmless the indemnified parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment.
(d) Contribution. If for any reason the indemnification
provided for in the preceding clauses (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless in respect of any loss,
claim, damage, liability or expense as contemplated by the preceding clauses
(a) and (b), then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by the indemnified party and the indemnifying party, but also
the relative benefits received by the indemnified party and the indemnifying
party, but also the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of Purchasers on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentations.
Section 7. Rule 144. The Company hereby agrees that,
for a period of five years from the Effective Time, it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and
the rules and regulations adopted by the SEC thereunder (or, if Company is not
required to file such reports, it will, upon the request of any Purchaser, make
publicly available other information so long as necessary to permit sales
pursuant to Rule 144 under the Securities Act), and it will take such further
action as any Purchaser may reasonably request, all to the extent required from
time to time to enable each Purchaser to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the SEC.
Section 8. Participation in Underwritten Registrations.
(a) If any of the Registrable Securities are to be sold
in an Underwritten Offering, whether pursuant to a Demand Registration or
otherwise, the investment banker or investment
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<PAGE> 13
bankers and manager or managers that will administer the offering will be
selected by the Company. In the case of any Underwritten Offering or
Underwritten Registration, the underwriting agreement will provide that the
underwriters will use their best efforts to cause such Underwritten Offering to
be widely distributed.
(b) No Person may participate in any Underwritten
Registration hereunder unless such Person completes and executes all customary
and reasonably requested questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements. Nothing in this Section 8 shall be construed to
create any additional rights regarding the registration of Registrable
Securities in any Person otherwise than as set fourth herein.
Section 9. Miscellaneous.
(a) Remedies. Each party hereto, in addition to being
entitled to exercise all rights provided herein or granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement to the extent available under applicable law. Each party
hereto agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
(b) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may only be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may only be given, with the written consent of the Company
and the holders of a majority of the Registrable Securities.
(c) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telecopier, or air courier guaranteeing overnight
delivery:
(i) if to any of Purchasers:
Two Houston Center
909 Fannin, Suite 2910
Houston, Texas 77010
Attention: [Insert Name of Purchaser]
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<PAGE> 14
(ii) if to the Company:
Sonat Inc.
1900 5th Avenue N.
Birmingham, Alabama 35203
Attention: William A. Smith
Telephone: (205) 325-7410
Facsimile: (205) 325-7444
and thereafter at such other address as may be designated from time to time by
notice given in accordance with the provisions of this Section 9(c).
(d) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties. Except for the indemnification and contribution rights under this
Agreement (which are intended to and shall create third party beneficiary
rights), the provisions of this Agreement are solely for the benefit of the
parties and are not intended to confer upon any Person except the parties any
rights or remedies hereunder, and there are no third party beneficiaries of
this Agreement.
(e) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. THIS AGREEMENT, AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
(h) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(i) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
SONAT INC.
By:/s/ WILLIAM A. SMITH
------------------------------------
Name: William A. Smith
Title: Executive Vice President
/s/ SELIM K. ZILKHA
---------------------------------------
Selim K. Zilkha
/s/ MICHAEL ZILKHA
---------------------------------------
Michael Zilkha
SELIM K. ZILKHA TRUST
By:/s/ SELIM K. ZILKHA
------------------------------------
Name: Selim K. Zilkha
Title: Trustee
SELIM ZILKHA (1996) ANNUITY TRUST
By:/s/ EZRA ZILKHA
------------------------------------
Name: Ezra Zilkha
Title: Trustee
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<PAGE> 1
EXHIBIT D
Each of the undersigned hereby agrees that the Amendment No. 1 to
Schedule 13D dated January 30, 1998, to which this Agreement is attached as
Exhibit D, and any amendments thereto, may be filed on behalf of each such
person.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Dated: February 2, 1998
/s/ MICHAEL ZILKHA
-----------------------------------------
Michael Zilkha
SELIM K. ZILKHA TRUST
/s/ SELIM K. ZILKHA
-----------------------------------------
Selim K. Zilkha, as Trustee
/s/ SELIM K. ZILKHA
-----------------------------------------
Selim K. Zilkha
SELIM K. ZILKHA (1996) ANNUITY TRUST
/s/ EZRA ZILKHA
-----------------------------------------
Ezra Zilkha, as Trustee
/s/ EZRA ZILKHA
-----------------------------------------
Ezra Zilkha
