$300,000,000
SOUTHERN NATURAL GAS COMPANY
8% NOTES DUE MARCH 1, 2032
UNDERWRITING AGREEMENT
February 21, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION,
As Representative of the Several Underwriters,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Southern Natural Gas Company, a Delaware
corporation ("COMPANY"), proposes to issue and sell $300,000,000 principal
amount ("SECURITIES") of its 8% Notes Due March 1, 2032 to be issued under an
indenture, dated as of June 1, 1987, as supplemented by the first supplemental
indenture dated as of September 30, 1997 and the second supplemental indenture
dated as of February 13, 2001 (as supplemented, the "INDENTURE"), between the
Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) as
Trustee. The Securities are sometimes herein called the "OFFERED SECURITIES."
The Company hereby agrees with the several Underwriters named in Schedule A
hereto ("UNDERWRITERS") as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-76782), including a
prospectus, relating to the Offered Securities has been filed with the
Securities and Exchange Commission ("COMMISSION") and has been declared
effective by the Commission. Such registration statement, as amended
through the date of this Agreement, including all documents
incorporated or deemed to be incorporated by reference therein, as from
time to time amended or supplemented pursuant to the Securities
Exchange Act of 1934 ("EXCHANGE Act"), and the rules and regulations of
the Commission thereunder, or otherwise, are hereinafter referred to as
the "REGISTRATION STATEMENT", and the prospectus included in such
Registration Statement, as supplemented to reflect the terms of the
Offered Securities and the terms of offering thereof, as first filed
with the Commission on January 28, 2002 pursuant to and in accordance
with Rule 424(b) ("RULE 424(b)") under the Securities Act of 1933
("ACT"), including all material incorporated by reference therein, is
hereinafter referred to as the "PROSPECTUS." No document has been or
will be prepared or distributed in reliance on Rule 434 under the Act.
(b) On the effective date of the Registration Statement, such
Registration Statement conformed in all material respects to the
requirements of the Act, the Trust Indenture Act of 1939 ("TRUST
INDENTURE ACT") and the rules and regulations of the Commission ("RULES
AND REGULATIONS") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; the
Registration Statement, as of the date of this Agreement, conforms and,
as amended or
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supplemented, if applicable, will conform in all material respects to
the requirements of the Act, the Trust Indenture Act and the Rules and
Regulations, and does not include and, as amended or supplemented, if
applicable, will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; the
Prospectus, as of the date of its filing, conforms, and as amended or
supplemented, if applicable, will conform in all material respects to
the requirements of the Act, the Trust Indenture Act, and the Rules and
Regulations and does not include, and as amended or supplemented, if
applicable, will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; except that the provisions
in the foregoing paragraph do not apply to statements in or omissions
from any of such documents based upon written information furnished to
the Company by any Underwriter through the Representative, if any,
specifically for use therein.
(c) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, when they
became effective or at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the Act, the Exchange Act or the Rules and
Regulations, as applicable, and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective, at the time the Prospectus was issued and on the
Closing Date (as defined below), did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, and
with respect to the Prospectus, in light of the circumstances under
which they were made, not misleading.
(d) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good standing
in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except
where the failure to be so qualified, individually or in the aggregate,
would not have a material adverse effect on the financial condition,
business, properties or results of operations of the Company and its
subsidiaries taken as a whole ("MATERIAL ADVERSE EFFECT").
(e) Each significant subsidiary (as defined in Regulation S-X of
the Act and set forth on Schedule B hereto) ("SIGNIFICANT SUBSIDIARY")
of the Company has been duly incorporated or formed, as the case may
be, and is an existing corporation, limited liability company or
limited partnership in good standing under the laws of the jurisdiction
of its incorporation or formation, as the case may be, with power and
authority (corporate or other) to own its properties and conduct its
business as described in the Prospectus; and each such Significant
Subsidiary is duly qualified to do business as a foreign corporation,
limited liability company or limited partnership in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except where
the failure to be so qualified, individually or in the aggregate, would
not have a Material Adverse Effect; all of the issued and outstanding
equity interests of each Significant Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable; and
the equity interests of each Significant Subsidiary owned by the
Company, directly or through subsidiaries, are owned free from liens,
claims, or adverse interests of any nature, except that the stock of
Southern Gas Storage Company is pledged under the First Amended and
Restated Sponsor Subsidiary Credit Agreement, originally dated as of
June 30, 1999 and amended and restated as of November 22, 1999, made
among Sabine River Investors, L.L.C., the other Sponsor Subsidiaries
parties thereto, Trinity and the Sponsor Subsidiary Collateral Agent
(as amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof).
(f) The Indenture has been duly authorized and qualified under the
Trust Indenture Act with respect to the Offered Securities registered
thereby; the Offered Securities have been duly authorized; and when the
Offered Securities are delivered and paid for pursuant to this
Agreement on February 26, 2002 ("CLOSING DATE"), the Indenture will
have been duly executed and delivered, such Offered Securities will
have been duly executed, authenticated, issued and delivered and will
conform in all material respects to the description thereof contained
in the Prospectus and the Indenture, and such Offered Securities will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms,
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subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(g) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Offered Securities by the
Company, except such as have been obtained and made under the Act and
the Trust Indenture Act and such as may be required under state
securities laws.
(h) The execution, delivery and performance of the Indenture and
this Agreement, and the issuance and sale of the Offered Securities and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any Significant Subsidiary or
any of their properties, or any agreement or instrument to which the
Company or any such Significant Subsidiary is a party or by which the
Company or any such Significant Subsidiary is bound or to which any of
the properties of the Company or any Significant Subsidiary is subject,
or the charter or by-laws of the Company or any such Significant
Subsidiary, and the Company has full power and authority to authorize,
issue and sell the Offered Securities as contemplated by this
Agreement.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) Neither the Company nor any Significant Subsidiary is (i) in
violation of its respective charter or by-laws or (ii) in default in
the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any Significant
Subsidiary is a party or by which the Company or any Significant
Subsidiary or their respective property is bound.
(k) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and indefeasible title to all real properties
and all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Prospectus, the Company
and its Significant Subsidiaries hold any leased real or personal
property under valid and enforceable leases with no exceptions that
would materially interfere with the use made or to be made thereof by
them.
(l) Except as disclosed in the Prospectus, neither the Company nor
any of its Significant Subsidiaries is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection
or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "ENVIRONMENTAL LAWS"), owns or operates
any real property contaminated with any substance that is subject to
any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would, individually or in the
aggregate, have a Material Adverse Effect; and, except as disclosed in
the Prospectus, the Company is not aware of any pending investigation
which might lead to such a claim.
(m) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of
its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under the Indenture or this Agreement, or which
are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are, to the
Company's knowledge, threatened or contemplated.
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(n) The financial statements included in the Registration
Statement and the Prospectus present fairly the consolidated financial
position of the Company and its consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the
periods shown, and, except as otherwise disclosed in the Prospectus,
such consolidated financial statements have been prepared in conformity
with the generally accepted accounting principles in the United States
applied on a consistent basis; and the schedules included in the
Registration Statement present fairly the information required to be
stated therein; and the assumptions used in preparing the pro forma
financial statements incorporated by reference in the Registration
Statement and the Prospectus provide a reasonable basis for presenting
the significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(o) Except as disclosed in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) since the date of the latest audited financial statements
included in the Prospectus there has been no material adverse change,
nor any development or event involving a prospective material adverse
change, in the financial condition, business, properties or results of
operations of the Company and its subsidiaries taken as a whole, and,
except as disclosed in or contemplated by the Prospectus, there has
been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(p) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act has
indicated to the Company that it is considering (i) the downgrading,
suspension or withdrawal of, or any review for a possible change that
does not indicate the direction of the possible change in, any rating
assigned to the Company or any securities of the Company or (ii) any
change in the outlook for any rating of the Company or any securities
of the Company.
(q) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be (i) an "investment
company" as defined in the Investment Company Act of 1940, as amended,
or (ii) a "holding company" within the meaning of, or subject to
regulation under, the Public Utility Holding Company Act of 1935, as
amended, and the rules and regulations promulgated by the Commission
thereunder.
3. Purchase, Sale and Delivery of Offered Securities. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of 98.841% of the principal amount
thereof, the respective principal amounts of the Offered Securities set forth
opposite the names of the Underwriters in Schedule A hereto.
The Company will deliver against payment of the purchase price the
Offered Securities in the form of one or more permanent global Securities in
definitive form (the "GLOBAL SECURITIES") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Prospectus. Payment for the Offered Securities
shall be made by the Underwriters in Federal (same day) funds by wire transfer
to an account at a bank acceptable to Credit Suisse First Boston Corporation
("CSFBC") and designated in writing by the Company, not less than 48 hours prior
to the Closing Date, at 9:00 A.M., (New York time), on February 26, 2002, or at
such other time not later than seven full business days thereafter as CSFBC and
the Company determine, such time being herein referred to as the "CLOSING DATE",
against delivery to the Trustee as custodian for DTC of the Global Securities
representing all of the Offered Securities. The Global Securities will be made
available for checking at the office of Xxxxx Xxxxxxx & Xxxx LLP at least 24
hours prior to the Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
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5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that it will furnish or otherwise make available to counsel
for the Underwriters, one conformed copy of the registration statement relating
to the Registered Securities, including all exhibits, in the form it became
effective and of all amendments thereto and that, in connection with each
offering of Offered Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by CSFBC, subparagraph (5)) not later than the
second business day following the execution and delivery of this
Agreement.
(b) During such period as, in the opinion of counsel for the
Underwriters, a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, the Company will
advise CSFBC promptly of any proposal to amend or supplement the
Registration Statement or the Prospectus (except in the case of Annual
Reports filed on Form 10-K or Quarterly Reports filed on Form 10-Q) and
will afford CSFBC a reasonable opportunity to comment on any such
proposed amendment or supplement (except in the case of reports to be
filed by the Company in the ordinary course pursuant to the Exchange
Act); and, during such period as, in the opinion of counsel for the
Underwriters, a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, the Company will
also advise CSFBC promptly of the filing of any such amendment or
supplement (except in the case of reports to be filed by the Company in
the ordinary course pursuant to the Exchange Act) and of the
institution by the Commission of any stop order proceedings in respect
of the Registration Statement or of any part thereof and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company promptly will notify CSFBC of such event and will promptly
prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CSFBC's consent
to, nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
6 hereof.
(d) As soon as practicable, but not later than 16 months, after
the date of this Agreement, the Company will make generally available
to its security holders an earnings statement covering a period of at
least 12 months beginning after the later of (i) the effective date of
the most recent post-effective amendment to the Registration Statement
to become effective prior to the date of this Agreement and (ii) the
date of the Company's most recent Annual Report on Form 10-K filed with
the Commission prior to the date of this Agreement, which will satisfy
the provisions of Section 11(a) of the Act.
(e) The Company will furnish or make generally available to the
Representative copies of the Registration Statement, including all
exhibits, any related preliminary prospectus, and any related
preliminary prospectus supplement, upon request of the Representative,
and the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as
CSFBC reasonably requests. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(f) The Company will cooperate with the Representative in
connection with the qualification of the Offered Securities for sale
and the determination of their eligibility for investment under the
laws of such jurisdictions as CSFBC designates and will continue such
qualifications in effect so long as required for the distribution of
the Offered Securities; provided, however, that the Company shall not
be required in connection therewith to qualify as a foreign corporation
in any jurisdiction in which it is not now so qualified or to take any
action that would subject it to general consent to service of process
or taxation other than as to matters and transactions taken by Company
as contemplated herein that relates to the Prospectus,
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the Registration Statement, or the offering of the Offered Securities
in any jurisdiction in which it is not now so qualified.
(g) During the period of two years hereafter, the Company will
furnish or make generally available to the Representative and, upon
request, to each of the other Underwriters, as soon as practicable
after the end of each fiscal year, a copy of its annual report to
stockholders, if any, for such year; and the Company will furnish to
the Representative as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission
under the Securities Exchange Act of 1934 or mailed to stockholders.
(h) The Company will pay all expenses incident to the performance
of its obligations under this Agreement, for any filing fees and other
expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Offered Securities for sale under
the laws of such jurisdictions as CSFBC designates and the printing of
memoranda relating thereto, for any travel expenses of the Company's
officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective
purchasers of the Offered Securities and for expenses incurred in
distributing preliminary prospectuses, if any, and the Prospectus
(including any amendments and supplements thereto) to the Underwriters.
(i) The Company will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to debt
securities issued or guaranteed by the Company and having a maturity of
more than one year from the date of issue, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of CSFBC for a period beginning at
the date of this Agreement and ending at the later of the Closing Date
and the lifting of trading restrictions by the Representatives.
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Offered
Securities on the Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) On or prior to the date of this Agreement, the Representative
shall have received a letter, dated the date of delivery thereof, of
PricewaterhouseCoopers LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and any
schedules and any summary of earnings examined by them and
included in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act
and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of
Auditing Standards No. 71, Interim Financial Information, on any
unaudited financial statements included in the Registration
Statement;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company
who have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that
caused them to believe that:
(A) the unaudited financial statements, if any, and any
summary of earnings included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or any material
6
modifications should be made to such unaudited financial
statements and summary of earnings for them to be in
conformity with generally accepted accounting principles;
(B) if any unaudited "capsule" information is contained
in the Prospectus, the unaudited consolidated operating
revenues, operating income, net income and net income per
share amounts or other amounts constituting such "capsule"
information and described in such letter (i) do not agree with
the corresponding amounts set forth in the unaudited
consolidated financial statements; or (ii) were not determined
on a basis substantially consistent with that of the
corresponding amounts in the audited statements of income;
(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date
not more than three business days prior to the date of the
such letter, there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt of the
Company and its consolidated subsidiaries or, at the date of
the latest available balance sheet read by such accountants,
there was any decrease in consolidated net current assets or
net assets, as compared with amounts shown on the latest
balance sheet included in the Prospectus; or
(D) for the period from the closing date of the latest
income statement included in the Prospectus to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year, in consolidated
operating revenues, operating income or in net income;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Prospectus (in each case to the
extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its subsidiaries subject to the internal controls of
the Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter, shall be contemplated
by the Commission.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the financial condition,
business, properties or results of operations of the Company and its
subsidiaries taken as one enterprise which, in the judgment of a
majority in interest of the Underwriters including the Representative,
is material and adverse and makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and
payment for the Offered Securities; (ii) any downgrading in the rating
of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any change in U.S. or international
financial, political or economic conditions or currency exchange rates
or exchange controls as
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would in the judgment of a majority in interest of the Underwriters
including the Representative, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Offered
Securities, whether in the primary market or in respect of dealings in
the secondary market; (iv) any material suspension or material
limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company
on any exchange or in the over-the-counter market; (v) any banking
moratorium declared by U.S. Federal or New York authorities; (vi) any
major disruption of settlements of securities or clearance services in
the United States; or (vii) any attack on, outbreak or escalation of
hostilities or act of terrorism involving the United States, any
declaration of war by Congress or any other national or international
calamity or emergency if, in the judgment of a majority in interest of
the Underwriters including the Representative, the effect of any such
attack, outbreak, escalation, act, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities.
(d) The Representative shall have received an opinion, dated the
Closing Date, of Xxxxxxx & Xxxxx Mayor, Day, Xxxxxxxx & Xxxxxx L.L.P.,
counsel for the Company, to the effect that:
(i) The Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the Trust
Indenture Act; the Offered Securities have been duly authorized; the
Offered Securities have been duly executed by the Company; the
Indenture does, and the Offered Securities, when authenticated by the
Trustee and issued and delivered in the manner provided in the
Indenture against payment of the purchase price therefor in accordance
with the terms of this Agreement, will, constitute valid and legally
binding obligations of the Company enforceable in accordance with their
terms, except as (a) may be limited by bankruptcy, insolvency,
fraudulent conveyance or transfer, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally and
(b) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability; and
the Offered Securities conform, as to legal matters, in all material
respects, to the description thereof contained in the Prospectus;
(ii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court of the United
States or the State of New York is required for the consummation of the
transactions contemplated by this Agreement in connection with the
issuance or sale of the Offered Securities by the Company, except such
as have been obtained and made under the Act and the Trust Indenture
Act and such as may be required under state securities laws, as to
which such counsel need not opine;
(iii) The execution and delivery by the Company of, and the
performance by the Company of its obligations under the Indenture and
this Agreement, and the issuance and sale by the Company of the Offered
Securities and compliance with the terms and provisions thereof will
not violate any provision of applicable United States federal law, New
York law or Delaware General Corporation Law, or the charter or bylaws
of the Company or the charter or bylaws of any Significant Subsidiary,
and the Company has full power and authority to authorize, issue and
sell the Offered Securities as contemplated by this Agreement;
(iv) The Registration Statement has become effective under
the Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and the
Registration Statement, as of its effective date, the Registration
Statement and the Prospectus, as of the date of this Agreement, and any
amendment or supplement thereto, as of its date, complied as to form in
all material respects with the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations; in the course of the
preparation by the Company of the Prospectus (including documents
incorporated by reference therein), such counsel has participated in
conferences with certain of the officers and representatives of the
Company, the Company's independent accountants, the Underwriters and
counsel for the Underwriters at which the Registration Statement and
the Prospectus were discussed; no facts have come to counsel's
attention in the course of such proceedings that have caused such
counsel to believe that the Registration Statement, as of its effective
date, as of the date of this Agreement or as
8
of the Closing Date, or any amendment thereto, as of its date or as of
the Closing Date, 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
Prospectus, as of the date of this Agreement or as of such Closing
Date, or any amendment or supplement thereto, as of its date or as of
the Closing Date, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; the descriptions in the Registration
Statement and Prospectus of statutes, legal and governmental
proceedings and contracts and other documents are accurate and fairly
present the information required to be shown; and such counsel do not
know of any legal or governmental proceedings required to be described
in the Prospectus which are not described as required or of any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required;
it being understood that such counsel need express no opinion as to the
financial statements and schedules or other financial data contained or
incorporated by reference in the Registration Statement or the
Prospectus; and
(v) Each document, if any, filed pursuant to the Exchange Act
and incorporated by reference in the Prospectus (except for financial
statements and schedules and other financial or statistical data
included or incorporated by reference therein or omitted therefrom as
to which such counsel need not express any opinion) appeared on its
face to be appropriately responsive in all material respects with the
Exchange Act; and the Registration Statement and Prospectus (except for
financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom as to which such
counsel need not express any opinion) appeared on their face to be
appropriately responsive in all material respects with the requirements
of the Act.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
(vii) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be, (i) an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended, or (ii) a "holding company" within the meaning of, or
subject to regulation under, the Public Utility Holding Company Act of
1935, as amended, and the rules and regulations promulgated by the
Commission thereunder.
(e) The Representative shall have received from Xxxxx Xxxxxxx as
Special Counsel for the Company, an opinion, dated the Closing Date, to
the effect that:
(i) Each of the Company and its Significant Subsidiaries
has been duly incorporated, is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus,
and each is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified or to be in good standing, individually or in the aggregate,
would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(ii) The execution, delivery and performance of this
Agreement, the Indenture and the Securities by the Company, the
compliance by the Company with all the provisions hereof and thereof
and the consummation of the transactions contemplated hereby and
thereby will not, to such counsel's knowledge, (A) violate any
indenture, loan agreement, mortgage, lease or other agreement or
instrument to which the Company or any Significant Subsidiary is a
party or by which the Company or any subsidiary or their respective
property is bound or (B) violate or conflict with any judgment, order
or decree of any court or any governmental body or agency having
jurisdiction over the Company, any subsidiary or their respective
property, except in each case, for such violations as would not have a
material adverse effect on the business, prospects, financial condition
or results of operation of the Company and its subsidiaries, taken as a
whole.
9
(iii) To such counsel's knowledge after due inquiry, there are
no legal or governmental proceedings required to be described in the
Prospectus which are not described as required or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it being
understood that such counsel need express no opinion as to the
financial statements or schedules or other financial data contained in
the Registration Statement or the Prospectus.
(iv) The statements under (A) the caption "Item 3 - Legal
Proceedings" of the Company's most recent annual report on Form 10-K
incorporated by reference into the Prospectus and (B) the caption
"Item 1 - Legal Proceedings" of Part II of the Company's quarterly
reports on Form 10-Q filed since such annual report, in each case
insofar as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present as of the
date of the applicable report the information disclosed therein in all
material respects.
(v) (A) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not violate any provisions of any applicable laws and regulations
specifically governing the generation, transportation, distribution or
delivery of natural gas, oil, electricity or other related commodities
or services, including pipelines, transmission lines, storage
facilities and related facilities and equipment, or the import or
export of such commodities or services (collectively, the "Energy
Industry") and (B) no consent, approval, authorization or order of or
qualification with any United States federal body or agency
specifically regulating the Energy Industry is required for the
performance by the Company of its obligations under this Agreement,
except in each of the foregoing cases for such violations or failures
to obtain such consent, approval, authorization, order or qualification
as would not have a material adverse effect on the business, prospects,
financial condition or results of operation of the Company and its
subsidiaries, taken as a whole.
(f) The Representative shall have received from Xxxxx Xxxxxxx &
Xxxx LLP, counsel for the Underwriters, such opinion or opinions, dated
such Closing Date, with respect to the incorporation of the Company,
the validity of the Offered Securities delivered on such Closing Date,
the Registration Statement, the Prospectus and other related matters as
the Representative may require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(g) The Representative shall have received a certificate, dated
the Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
the Company in this Agreement are true and correct, that the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date, that no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated
by the Commission and that, subsequent to the date of the most recent
financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective
material adverse change, in the financial condition, business,
properties or results of operations of the Company and its
subsidiaries, taken as a whole, except as set forth in or contemplated
by the Prospectus or as described in such certificate.
(h) The Representative shall have received a letter, dated such
Closing Date, of PricewaterhouseCoopers LLP which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three days prior to such Closing Date for the purposes of this
subsection.
The Company will furnish the Representative with such conformed copies of such
opinions, certificates, letters and documents as the Representative reasonably
request. CSFBC may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder.
10
7. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless each Underwriter, its partners, directors and officers and
each person, if any, who controls such Underwriter within the meaning of Section
15 of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any preliminary
prospectus or preliminary prospectus supplement related to the Offered
Securities, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representative specifically for
use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (b) below; and provided, further, that with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
any preliminary prospectus or preliminary prospectus supplement related to the
Offered Securities, the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any Underwriter from whom the person asserting
such losses, claims, damages or liabilities purchased the Offered Securities
concerned, to the extent that a prospectus relating to such Offered Securities
was required to be delivered by such Underwriter under the Act in connection
with such purchase and any such loss, claim, damage or liability of such
Underwriter results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Offered
Securities to such person, a copy of the Prospectus (exclusive of material
incorporated by reference) if the Company had previously furnished copies
thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company, its directors and officers and each person,
if any who controls the Company within the meaning of Section 15 of the
Act, against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or preliminary prospectus supplement, or arise
out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representative specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred,
it being understood and agreed that the only such information furnished
by any Underwriter consists of the following information in the
Prospectus furnished on behalf of each Underwriter: the third paragraph
under the caption "Underwriting," the second and third sentences in the
fifth paragraph under the caption "Underwriting" and the information
contained in the paragraphs related to stabilizing transactions,
over-allotment transactions, syndicate covering transactions and
penalty bids under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish,
11
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party,
be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional
release of such indemnified party from all liability on any claims that
are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to
act by or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters. The relative fault 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 the Company or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 7 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each director of the Company, to each officer of the Company who has
signed a Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder on the
Closing Date and the aggregate principal amount of Offered Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total principal amount of Offered Securities that the
Underwriters are obligated to purchase on such Closing Date, CSFBC may
12
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate principal amount of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
principal amount of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFBC and the
Company for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 9. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Offered Securities by the Underwriters is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 5 and the respective obligations of the Company and the Underwriters
pursuant to Section 7 shall remain in effect, and if any Offered Securities have
been purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Underwriters is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 8
or the occurrence of any event specified in clause (iii), (iv) or (v) of Section
6(c), the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or sent by facsimile and
confirmed to the Representative at Eleven Madison Avenue, New York, N.Y.
10010-3629, Attention: Transactions Advisory Group, or, if sent to the Company,
will be mailed, delivered or sent by facsimile and confirmed to it at 0000
Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: Legal Department, provided,
however, that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or sent by facsimile and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representative will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representative will be binding upon all the
Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
13
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[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
14
If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
SOUTHERN NATURAL GAS COMPANY
By /s/ XXXX X. XXXXXX
----------------------------------
Name Xxxx X. Xxxxxx
--------------------------------
Title Senior Vice President
and Chief Financial Officer
-------------------------------
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ XXXX XXXXX
----------------------------------
Xxxx Xxxxx, Director
Acting on behalf of itself and as the Representative of the several
Underwriters.
..
15
SCHEDULE A
PRINCIPAL
AMOUNT OF
UNDERWRITER SECURITIES
----------- ----------
Credit Suisse First Boston Corporation........................... $180,000,000
Banc One Capital Markets, Inc.................................... 60,000,000
Scotia Capital (USA) Inc......................................... 60,000,000
------------
Total........................................................ $300,000,000
============
16
SCHEDULE B
None.
17
