UNDERWRITING AGREEMENT
_________________
July 7, 1999
Sonat Inc.,
0000 Xxxxx Xxxxxx Xxxxx,
XxXxxxx-Xxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000.
Dear Sirs:
The underwriters named below (such underwriters being herein called
the "Underwriters") understand that Sonat Inc., a Delaware corporation (the
"Company"), proposes to issue and sell $600,000,000 aggregate principal amount
of 7 5/8% Notes due July 15, 2011 (the "Purchased Securities"), registered on
Registration Statements No. 333-62383 and 333-82385 (the "Registration
Statements"). Subject to the terms and conditions set forth herein and
incorporated by reference herein and referred to below, the Company hereby
agrees to sell and the Underwriters agree to purchase, severally and not
jointly, the principal amount of such Purchased Securities set forth opposite
their names at 98.274% of their principal amount.
Principal Amount
Name of Notes
---- ----------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation........ $ 301,200,000
Chase Securities Inc....................................... 99,600,000
Xxxxxxx, Xxxxx & Co........................................ 99,600,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated................................... 99,600,000
-------------
Total ............................................ $600,000,000
The Underwriters will pay for such Purchased Securities upon
delivery thereof at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx at 10:00 a.m. (New York time) on July 12, 1999.
The Purchased Securities shall have the following terms:
MATURITY: July 15, 2011
INTEREST RATE: 7 5/8%
REDEMPTION PROVISIONS: Redeemable, in whole or in part, at the
option of the Company, at any time, at a redemption price equal to
the greater of (i) 100% of the principal amount redeemed and (ii)
the sum of the present values of the remaining scheduled payments
thereon, discounted to the redemption date on a semi-annual basis at
the Treasury Rate plus 25 basis points, plus in each case accrued
interest on the principal amount being redeemed to the date of
redemption.
DEFEASANCE PROVISIONS: Subject to the defeasance and covenant
defeasance provisions of Article 15 of the Indenture, dated as of
June 1, 1986, as amended between the Company and The Chase Manhattan
Bank (formerly Chemical Bank, successor by merger to Manufacturers
Hanover Trust Company), as Trustee.
INTEREST PAYMENT DATES: January 15 and July 15 commencing January
15, 2000.
Unless otherwise provided herein, all the provisions contained in
the document entitled Sonat Inc. Underwriting Agreement Standard Provisions,
dated September 25, 1997, a copy of which was filed as Exhibit 1 to the
Company's Current Report on Form 8-K dated September 30, 1997, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein.
Section 3 of the Sonat Inc. Underwriting Agreement Standard
Provisions (the "Standard Provisions") is amended as follows: "(No. 333-62383)"
shall be inserted in the first sentence thereof after the words "a registration
statement on Form S-3".
Sections 5(f) and 5(g) of the Standard Provisions shall be replaced
in their entirety to read as follows:
"Section 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS.
(f) The Underwriters or the Representatives shall have received on the
Closing Date (i) from Xxxxxx Xxxxxxx & Xxxx LLP an opinion, dated the
Closing Date, substantially identical to the form of their opinion
attached hereto as Annex A-1 and (ii) from Xxxxxxx & Xxxxx L.L.P., counsel
for El Paso Energy Corporation, an opinion, dated the Closing Date, with
respect to the periodic reports of El Paso Energy Corporation included in
the Company's Current Report on Form 8-K dated July 6, 1999, in the form
attached hereto as Annex A-2.
(g) The Underwriters or the Representatives shall have received on the
Closing Date (i) from Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters,
opinions dated the Closing Date, with respect to the Company, the
Underwriters' Securities, the Registration Statement and Prospectus and
this Agreement and (ii) from Xxxxx Liddel & Xxxx LLP, counsel for the
Underwriters, an opinion and letter dated the Closing Date, with respect
to the periodic reports of El Paso Energy Corporation included in the
Company's Current Report on Form 8-K dated July 6, 1999. Such opinions
shall be satisfactory in all respects to the Underwriters or the
Representatives, and the Company shall have furnished to counsel for the
Underwriters such documents as they may reasonably request for the purpose
of enabling them to render such opinions."
All notices and communications hereunder to an Underwriter shall be
given to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
Very truly yours,
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
CHASE SECURITIES INC.
XXXXXXX, XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:____________________________________
Name:
Title:
Accepted:
SONAT INC.
By:__________________________
Name:
Title:
ANNEX A-1
Pursuant to Section 5(f) of the Sonat Inc. Underwriting Agreement
Standard Provisions, Xxxxxx Xxxxxxx & Xxxx LLP shall furnish an opinion with
respect to the Federal laws of the United States, the laws of the State of New
York and the General Corporation Law of the State of Delaware (which, as to
paragraph (vii) below, may rely on the opinion of in-house counsel to the
Company) to the effect that:
(i) The Company was duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power under the General Corporation Law of such State to carry on the
business in which it is now engaged, as described in the Prospectus and is duly
qualified as a foreign corporation in the States of Alabama, New York and Texas.
(ii) Southern Natural Gas Company and Sonat Exploration Company were
duly incorporated and are validly existing as corporations in good standing
under the laws of the State of Delaware with corporate power under the General
Corporation Law of such State to carry on the business in which they are now
engaged, as described in the Prospectus and the shares of capital stock of each
such corporation owned by the Company are duly and validly issued, fully paid
and nonassessable and, to such counsel's knowledge, are owned by the Company
free and clear of all mortgages, pledges, liens, encumbrances and other security
interests.
(iii) The Purchased Securities and the Indenture conform in all
material respects to the descriptions thereof in the Prospectus under the
captions "Description of Debt Securities" and "Description of Notes".
(iv) The Indenture has been duly authorized, executed and delivered
by the Company, has been duly qualified under the Trust Indenture Act of 1939,
as amended, and, assuming that it has been duly authorized, executed and
delivered by the Trustee, constitutes a valid and binding agreement of the
Company in accordance with its terms, except as limited by general equitable
principles and by bankruptcy, insolvency, reorganization or other laws affecting
the enforcement of creditors' rights; and the Purchased Securities have been
duly authorized and executed by the Company, and, when authenticated, issued and
delivered in accordance with the provisions of the Indenture and the
Underwriting Agreement, will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture, except as limited by general
equitable principles and by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights.
(v) The Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the Securities
Act or proceedings therefor instituted or threatened under the Securities Act by
the Securities and Exchange Commission.
(vi) The Registration Statement, and the Prospectus comply as to
form in all material respects with the requirements of the Securities Act, the
Trust Indenture Act of 1939, as amended, and the applicable Rules and
Regulations of the Securities and Exchange Commission thereunder (except for the
Statement of Eligibility of the Trustee on Form T-1, the financial statements
and notes thereto, related schedules and exhibits and other financial data
included in or omitted from the Registration Statement and other matters
referred to in the Prospectus under "Experts", as to which such counsel may
express no opinion).
(vii) No approval, authorization, consent or other order of any
public board or body (other than in connection or in compliance with the
provisions of the Federal securities laws or the securities or Blue Sky laws of
any State) is legally required for the issuance and sale by the Company of the
Purchased Securities.
(viii) The Underwriting Agreement has been duly authorized, executed
and delivered on behalf of the Company.
* * * * *
We have assumed the truth of information furnished to us and have
not independently verified and do not undertake any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus. We have, however, participated in
conferences with representatives of the Company, with your counsel and with your
representatives, at which conferences the contents of the Registration
Statement, the Prospectus and related matters were discussed. Our examination of
the Registration Statement and the Prospectus and participation in such
conferences have not led us to believe that the Registration Statement, when it
became effective, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Basic Prospectus, as
supplemented by the Prospectus Supplement, contained, as of July 7, 1999, or
contains, as of the date hereof, any untrue statement of a material fact or
omitted, as of July 7, 1999, or omits, as of the date hereof to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that we do not express any comment with respect to the Statement of Eligibility
of the Trustee on Form T-1, the financial statements and notes thereto, related
schedules and exhibits and other financial data included in or omitted from the
Registration Statement or the Prospectus other matters referred to in the
Prospectus under the caption "Experts", Incorporated Documents filed with the
Securities and Exchange Commission prior to January 1, 1999 and the Company's
Current Report on Form 8-K dated July 6, 1999).
ANNEX A-2
We have acted as counsel to El Paso Energy Corporation, a Delaware
corporation (the "Company"), in connection with the Company's preparation of
certain periodic reports listed below filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). In connection with the proposed merger of Sonat
Inc. ("Sonat") with and into the Company, it is our understanding that Sonat has
filed a Current Report on Form 8-K with the Commission on July 7, 1999 (the
"Sonat Form 8-K"), which included the following periodic reports filed pursuant
to the Exchange Act: (i) the Company's Annual Report on Form 10-K for the year
ended December 31, 1998, and (ii) the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999 (collectively, the "El Paso Reports"). We
are delivering this opinion to you pursuant to Section 5(f) of the Underwriting
Agreement Standard Provisions, dated July 7, 1999, among Sonat and the
underwriters named therein.
Subject to the qualifications and limitations set forth below, we
are of the opinion that:
Each El Paso Report (except for the financial statements and the
notes thereto and the schedules and other financial or statistical data included
or incorporated by reference therein or omitted therefrom, as to which we do not
express any opinion), when filed by the Company with the Commission pursuant to
the Exchange Act, appeared on its face to be approximately responsive in all
material respects as to form with the requirements of the Exchange Act.
In addition, in the course of the preparation by the Company of the
El Paso Reports, we have participated in conferences with certain of the
officers and representatives of the Company and the Company's independent
accountants at which the El Paso Reports have been discussed. We did not,
however, participate in the preparation of the Sonat Form 8-K. We are not
passing upon and do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the El Paso Reports or the Sonat Form
8-K and we have made no independent check or verification thereof. Subject to
the foregoing, no facts have come to our attention that have caused us to
believe that any El Paso Report, at the time such El Paso Report was filed by
the Company with the Commission, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. We express no belief, however, with
respect to financial statements, schedules or notes thereto or other financial
or statistical data included in or omitted from any of the Exchange Act Reports.
With respect to any matters indicated herein to be limited to our
knowledge and information (or words to like effect), the opinions set forth
herein with respect to such matters are specifically limited to the actual
knowledge which attorneys who are members of or are employed by this firm have
obtained solely in connection with the representation of the Company with
respect to the preparation of the El Paso Reports and without any independent
investigation. Nothing has come to the attention of such attorneys to cause them
to believe that the statements made herein "to our knowledge" are false.
This opinion is limited in all respects to the federal laws of the
United States, the laws of the State of New York (other than municipal and local
ordinances and regulations), and the Delaware General Corporation Law (without
regard to the decisional case law of Delaware), is furnished by us as counsel
for the Company to the persons to whom this opinion is addressed, and may not be
relied upon by any other person or entity and may not be disclosed, quoted,
filed with a governmental agency or otherwise referred to without the prior
written consent of the undersigned. This opinion speaks as of its date, and we
undertake no (and hereby disclaim any) obligation to update this opinion.
