1
EXHIBIT 1.1
ENRON OIL & GAS COMPANY
UNDERWRITING AGREEMENT
December 9, 1998
Enron Oil & Gas Company
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
NationsBanc Xxxxxxxxxx Securities LLC and Xxxxxxx Xxxxx Xxxxxx Inc.
(the "Underwriters") understand that Enron Oil & Gas Company, a Delaware
corporation (the "Company"), proposes to issue and sell $175,000,000 aggregate
principal amount of 6.00% Notes due December 15, 2008 (the "Purchased
Securities"), registered on Registration Statement No. 333-44785. Subject to the
terms and conditions set forth herein or 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 below opposite their names at a purchase price equal to
98.801% of the principal amount thereof, plus accrued interest, if any, from
December 14, 1998:
Name Principal Amount
---- ----------------
NationsBanc Xxxxxxxxxx Securities LLC $ 87,500,000
Xxxxxxx Xxxxx Xxxxxx Inc. $ 87,500,000
-----------
Total $175,000,000
============
The Underwriters will pay for such Purchased Securities upon
confirmation of delivery thereof at the offices of Xxxxxxxxx & Xxxxxxxxx,
L.L.P., South Tower Pennzoil Place, 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx 00000-0000 at 9:00 a.m. (Houston time) on December 14, 1998.
-1-
2
The Purchased Securities shall have the following terms:
Maturity: December 15, 2008
Initial Price to Public: 99.451
Interest Rate: 6.00% per annum
Redemption Provisions: The Company, at its option, may at any time
redeem all or any portion of the Purchased Securities, at a
redemption price equal to the greater of (i) 100% of their
principal amount or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon
discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at
the applicable Treasury Rate plus 20 basis points, plus accrued
and unpaid interest to the date of redemption.
"Treasury Rate" means, with respect to any redemption date
applicable to the Purchased Securities, the rate per annum equal
to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, at a price equal to the applicable
Comparable Treasury Price.
"Comparable Treasury Issue" means, with respect to the
Purchased Securities, the United States Treasury security
selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Purchased
Securities that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to
the remaining term of the Purchased Securities.
"Comparable Treasury Price" means, with respect to any
redemption date applicable to the Purchased Securities, (1) the
average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal
amount) on the third business day preceding such redemption
date, as set forth in the daily statistical release (or any
successor release) published by the Federal Reserve Bank of New
York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (2) if such release (or any successor
release) is not published or does not contain such prices on
such business day, (A) the average of the Reference Treasury
Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
-2-
3
"Independent Investment Banker" means, with respect to the
Purchased Securities offered hereby, an independent investment
banking institution of national standing appointed by the
Trustee.
"Reference Treasury Dealer" means, with respect to the
Purchased Securities, at least four primary U.S. Government
securities dealers as the Company or the Trustee shall select.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the
average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case
as a percentage of its principal amount) quoted in writing to
the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third business day preceding such redemption date.
Holders of the Purchased Securities to be redeemed will
receive notice thereof by first-class mail at least 30 and not
more than 60 days prior to the date fixed for redemption.
Interest Payment Dates: June 15 and December 15 of each year,
commencing June 15, 1999
Sinking Fund: None
Date referred to in Section 6(l) of the Standard Provisions:
December 14, 1998
Purchase Price: 98.801% of the principal amount thereof
Listing: None
Other Items: References in the Standard Provisions to settlement in
next business day funds shall refer to settlement in immediately
available funds pursuant to settlement procedures of The
Depository Trust Company. In addition, the Company is making the
representations and warranties attached hereto as Annex A.
All statements, requests, notices, communications and agreements
hereunder shall be in writing, and if to the Underwriters shall be delivered or
sent by mail, telex or facsimile transmission to the Underwriters in care of
NationsBanc Xxxxxxxxxx Securities LLC, NationsBank Corporate Center, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx,
Facsimile No. (000) 000-0000; and if to the Company shall be delivered or sent
by mail, telex or facsimile transmission to it at 0000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxx 00000, Attention: Xxxxxx Xxxxxx, Senior Vice President and Chief Financial
Officer, Facsimile No. (000) 000-0000.
-3-
4
Unless otherwise provided herein, all the provisions contained in the
document entitled Enron Oil & Gas Company Debt Securities Underwriting Agreement
Standard Provisions dated December 20, 1996, a copy of which was filed as an
exhibit to, or incorporated by reference into, Registration Statement No.
333-44785, are hereby incorporated herein 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.
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below and returning the signed
copy to us, and in addition have an authorized officer send us no later than
5:00 p.m. (New York time) on December 9, 1998 by wire, telex, facsimile
transmission or other written means, the following message:
We have entered into the Underwriting Agreement dated December 9, 1998
relating to the Purchased Securities referred to therein by signing a
copy of the Underwriting Agreement and returning the same or depositing
the same in the mail to you.
Very truly yours,
NATIONSBANK XXXXXXXXXX SECURITIES LLC
XXXXXXX XXXXX BARNEY INC.
By: NATIONSBANC XXXXXXXXXX
SECURITIES LLC
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Accepted:
ENRON OIL & GAS COMPANY
By: /s/ X. X. Xxxxxxx
------------------------------
Name: X. X. Xxxxxxx
Title: Vice President, Finance
And Treasurer
-4-
5
ANNEX A
The Company represents and warrants to each Underwriter, as of the date of the
Underwriting Agreement and as of the Closing referred to in the Underwriting
Agreement, that:
(a) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or, to the knowledge of the Company, threatened by the Commission;
(b) the financial statements, and the related notes thereto, included
or incorporated by reference in the Registration Statement and the Prospectus,
present fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the periods
specified; and said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis, and the
supporting schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein;
(c) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; and except as set forth or contemplated in the
Prospectus neither the Company nor any of its subsidiaries has entered into any
transaction or agreement (whether or not in the ordinary course of business)
material to the Company and its subsidiaries, taken as a whole;
(d) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the state of its incorporation,
with power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, other than where
the failure to be so qualified or in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
(e) each of the Company's subsidiaries has been duly incorporated and
is validly existing as a corporation under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification, other
than where the failure to be so qualified or in good standing would
6
not have a material adverse effect on the Company and its subsidiaries, taken as
a whole; and all the outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued, are fully-paid and
non-assessable, and (except in the case of foreign subsidiaries, for directors'
qualifying shares) are owned by the Company, directly or indirectly, free and
clear of all liens, encumbrances, security interests and claims;
(f) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding agreement of the
Company, except as rights to indemnity and contribution thereunder may be
limited by applicable law;
(g) the Purchased Securities have been duly authorized, and, when
issued and delivered pursuant to the Underwriting Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute valid and
binding obligations of the Company entitled to the benefits provided by the
Indenture; the Indenture has been duly authorized, executed and delivered by the
Company and the Trustee, constitutes a valid and binding instrument and has been
duly qualified under the Trust Indenture Act; and the Purchased Securities will,
and the Indenture does, conform to the descriptions thereof in the Prospectus;
(h) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, its Certificate of Incorporation or By-Laws or any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or any of
them or any of their respective properties is bound, except for violations and
defaults which individually and in the aggregate are not material to the Company
and its subsidiaries, taken as a whole, or to the holders of the Purchased
Securities; the issue and sale of the Purchased Securities and the performance
by the Company of all of the provisions of its obligations under the Purchased
Securities, the Indenture and the Underwriting Agreement and the consummation of
the transactions therein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other material agreement
or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will any such action result in any violation of the provisions of the
Certificate of Incorporation or the By-Laws of the Company or any applicable law
or statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company, its subsidiaries or any of their
respective properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Purchased Securities or the
consummation by the Company of the transactions contemplated by the Underwriting
Agreement or the Indenture, except such consents, approvals,
7
authorizations, registrations or qualifications as have been obtained under the
Securities Act, the Trust Indenture Act and as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Purchased Securities by the Underwriters; and
(i) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the knowledge of the
Company, threatened to which the Company or any of its subsidiaries is or may be
a party or to which any property of the Company or any of its subsidiaries is or
may be the subject which, if determined adversely to the Company, could
individually or in the aggregate reasonably be expected to have a material
adverse effect on the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and there are no contracts or other
documents of a character required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration Statement or the
Prospectus which are not filed or described as required.
