EXHIBIT 1
EXECUTION COPY
EL PASO CORPORATION
8,790,436 Shares of Common Stock
Underwriting Agreement
December 23, 2003
Deutsche Bank Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
El Paso Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell to Deutsche Bank Securities Inc. and ▇.▇. ▇▇▇▇▇▇ Securities Inc.
(the "Underwriters") an aggregate of 8,790,436 shares of Common Stock, par value
$3.00 per share, of the Company (the "Shares") as set forth in Schedule I
hereto. The shares of Common Stock of the Company to be outstanding after giving
effect to the sale of the Shares are herein referred to as the "Common Stock".
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement (File No. 333-82412), including a prospectus, relating to the Shares.
The registration statement as amended to the date of this Agreement is referred
to in this Agreement as the "Registration Statement". The term "Base Prospectus"
means the prospectus included in the Registration Statement. The Company has
filed with, or transmitted for filing to, or shall promptly hereafter file with
or transmit for filing to, the Commission a prospectus supplement (the
"Prospectus Supplement") specifically relating to the Shares pursuant to Rule
424 under the Securities Act. If the Company has filed an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement. The Base Prospectus as supplemented by any applicable Prospectus
Supplement specifically relating to the Securities in the form first used to
confirm sales of the Securities is hereinafter referred to as the
"Prospectus." Any reference in this Agreement to the Registration Statement, the
Base Prospectus, the Prospectus or any amendment or supplement thereto shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, and any reference to
"amend", "amendment" or "supplement" with respect to the Registration Statement,
the Base Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after such date under the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") that are deemed to be incorporated by
reference therein.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to issue and sell the Shares to the Underwriters as
hereinafter provided, and the Underwriters, severally and not jointly, upon the
basis of the representations and warranties herein contained, but subject to the
terms and conditions hereinafter stated, agree to purchase from the Company the
Shares at a purchase price per share of $7.745 (the "Purchase Price").
2. The Company understands that the Underwriters intend (i) to make a
public offering of the Shares as soon as in their judgment is advisable after
the parties hereto have executed and delivered this Agreement and (ii) initially
to offer the Shares upon the terms set forth in the Prospectus.
3. Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Underwriters at
10:00 a.m. EST on December 26, 2003, or at such other time on the same or such
other date, not later than the fifth Business Day thereafter, as the
Underwriters and the Company may agree upon in writing. The time and date of
such payment for the Shares is referred to herein as the "Closing Date". As used
herein, the term "Business Day" means any day other than a day on which banks
are permitted or required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date shall be made
against delivery to the Underwriters for their respective accounts of the Shares
to be purchased on such date registered in such names and in such denominations
as the Underwriters shall request in writing not later than two full Business
Days prior to the Closing Date, with any transfer taxes payable in connection
with the transfer to the Underwriters of the Shares duly paid by the Company.
The certificates for the Shares will be made available for
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inspection and packaging by the Underwriters at its office set forth above not
later than 1:00 P.M., New York City time, on the Business Day prior to the
Closing Date.
4. The Company represents and warrants to the Underwriters that:
(a) the Company and the transactions contemplated by this Agreement meet
the requirements and conditions for using a registration statement on Form
S-3 under the Securities Act, and the Registration Statement has been
declared effective by the Commission; 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) on the effective date of the Registration Statement, the Registration
Statement conformed in all material respects to the requirements of the
Securities Act and the rules and regulations of the Commission thereunder 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 supplemented, if applicable,
will conform in all material respects to the requirements of the Securities
Act and the rules and regulations on the Commission thereunder, 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, and as amended or
supplemented, if applicable, conforms or will conform in all material
respects to the requirements of the Securities Act and the rules and
regulations on the Commission thereunder and, as of the date of its filing,
did not or will not include, and as of the Closing Date or 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; provided that the
foregoing representations and warranties shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in reliance
upon and in conformity with information relating to the Underwriters
furnished to the Company in writing by the Underwriters expressly for use
therein, it being understood and agreed that the only such information is
that described as such in the second paragraph of Section 7 hereof;
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(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,
conformed and will conform in all material respects with the requirements of
the Securities Act, the Exchange Act or the rules and regulations of the
Commission thereunder, 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 filed and on the Closing Date, as
the case may be, 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 subsidiary set forth on Schedule II hereto (each, a "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
(other than the shares of Series A Preferred Stock of El Paso Tennessee
Pipeline Co.; 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, other than 100% of the equity
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interests of ANR Pipeline Company, El Paso Natural Gas Company and Tennessee
Gas Pipeline Company that are pledged pursuant to that certain Security and
Intercreditor Agreement dated as of April 16, 2003 among the Company and the
other parties named therein (the "Security Agreement");
(f) except for the registration of the Shares under the Securities Act and
such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities laws
and rules and regulations of the National Association of Securities Dealers,
Inc. ("NASD") in connection with the purchase and distribution of the Shares
by the Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby;
(g) the execution, delivery and performance of this Agreement, and the
issuance and sale of the Shares 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, (i) 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 (ii) 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
(iii) the charter or by-laws of the Company or any such Significant
Subsidiary, except in the case of clauses (i) and (ii), for any such breach
or violation which would not, individually or in the aggregate, have a
Material Adverse Effect; and the Company has full power and authority to
authorize, issue and sell the Shares as contemplated by this Agreement;
(h) this Agreement has been duly authorized, executed and delivered by the
Company;
(i) the Shares to be issued and sold by the Company to the Underwriters
hereunder have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and free of any preemptive or
similar rights and will conform to the
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description thereof contained in the Company's Form 8-A/A, as amended, filed
pursuant to the Exchange Act and incorporated by reference in the Prospectus;
(j) the Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued and outstanding shares of capital stock of
the Company, including the Shares, when issued and delivered in accordance
with this Agreement, have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus;
(k) 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, except in
the case of clause (ii) for any such default as would not, individually or in
the aggregate, have a Material Adverse Effect;
(l) except as disclosed in the Prospectus and as provided for in the
Security Agreement, the Company and its Significant 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 and as provided for in the Security Agreement, 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.
(m) 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
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Material Adverse Effect; and, except as disclosed in the Prospectus, the
Company is not aware of any pending investigation which could reasonably be
expected by the Company to lead to such a claim;
(n) except as disclosed in the Prospectus and the documents incorporated
by reference therein, 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 this Agreement, or which are
otherwise material in the context of the sale of the Shares; and no such
actions, suits or proceedings are, to the Company's knowledge, threatened or
contemplated;
(o) the financial statements 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
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;
(p) except as disclosed in the Prospectus, since the date of the latest
audited financial statements incorporated by reference 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,
other than ordinary dividends declared on the Company's Common Stock on April
29, 2003, July 31, 2003 and October 30, 2003;
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(q) no "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Securities 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;
(r) the Company is not and, after giving effect to the offering and sale
of the Shares 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;
(s) each of PricewaterhouseCoopers LLP and Deloitte & Touche LLP, who have
expressed their opinions on the audited financial statements and related
schedules included or incorporated by reference in the Registration Statement
and the Prospectus, are independent public accountants as required by the
Securities Act;
(t) the Company is subject to and in compliance with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act. The Common
Stock is registered pursuant to Section 12(b) of the Exchange Act and is
listed on The New York Stock Exchange, and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or delisting the Common Stock from
The New York Stock Exchange, nor has the Company received any notification
that the Commission or the NASD is contemplating terminating such
registration or listing; and the Shares have been approved for listing on The
New York Stock Exchange, subject to notice of issuance; and
(u) the Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Shares, will
not distribute any written offering material in connection with the offering
and sale of the Shares other than the Registration Statement or any amendment
thereto, or the Prospectus or any amendment or supplement thereto, or other
materials, if any, permitted by the Securities Act.
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5. The Company covenants and agrees with the Underwriters as follows:
(a) to file the final Prospectus with the Commission within the time
period specified by Rule 424(b) under the Securities Act and to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; and to furnish copies of the Prospectus to
the Underwriters in New York City prior to 10:00 a.m., New York City time, on
the Business Day next succeeding the date of this Agreement in such
quantities as the Underwriters may reasonably request;
(b) to deliver, at the expense of the Company, to the Underwriters signed
copies of the Registration Statement (as originally filed) and each amendment
thereto, in each case including exhibits and documents incorporated by
reference therein, and as many copies of the Prospectus (including all
amendments and supplements thereto) and documents incorporated by reference
therein as the Underwriters may reasonably request;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus during the Distribution Period to furnish to the
Underwriters a copy of the proposed amendment or supplement for review and
not to file any such proposed amendment or supplement to which the
Underwriters reasonably and timely object;
(d) to advise the Underwriters promptly, and to confirm such advice in
writing, (i) when any amendment to the Registration Statement has been filed
or becomes effective, (ii) when any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Underwriters with copies
thereof, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for any additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of the Prospectus or any
supplemental prospectus or the initiation or, to the Company's knowledge,
threatening of any proceeding for that purpose, (v) of the occurrence of any
event, 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 in order to make the statements therein, in light of
the circumstances when
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the Prospectus is delivered to a purchaser, not misleading, and (vi) of the
receipt by the Company of any notification with respect to any suspension of
the registration or qualification of the Shares for offer and sale in any
jurisdiction or the initiation or, to the Company's knowledge, threatening of
any proceeding for such purpose, and to use its commercially reasonable
efforts to prevent the issuance of any such stop order, or of any order
preventing or suspending the use of the Prospectus or any supplemental
prospectus, or of any order suspending any such registration or qualification
of the Shares, or notification of any such order thereof and, if issued, to
obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Shares a prospectus relating to the Shares is required by law
to be delivered in connection with sales by the Underwriters or any dealer
(the "Distribution Period"), any event shall occur as a result of which it is
necessary for the Underwriters to amend or supplement the Prospectus in order
to make the statements therein, in light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary
for the Underwriters to amend or supplement the Prospectus to comply with
applicable law, the Company shall use its commercially reasonable efforts
forthwith to prepare and furnish, at the expense of the Company, to the
Underwriters and to the dealers (whose names and addresses the Underwriters
will furnish to the Company) to which Shares may have been sold by the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the statements in
the Prospectus as so amended or supplemented will not, in light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading
or so that the Prospectus will comply with law; neither the Underwriters'
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;
(f) to endeavor to register or qualify the Shares for offer and sale under
the securities or blue sky laws of such jurisdictions as the Underwriters
shall reasonably request and to continue such registration or qualification
in effect so long as reasonably required for distribution of the Shares;
provided that the Company shall not be required to file a general consent to
service of process in any such jurisdiction or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified;
(g) to make generally available to its security holders and to the
Underwriters as soon as practicable an earnings statement covering a period
of at least twelve months beginning not later than the first fiscal quarter
of the Company
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occurring after the date hereof, which shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;
(h) during the period when the Prospectus is required to be delivered
under the Securities Act or the Exchange Act in connection with sales of the
Securities, to file all documents required to be filed by it with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act within the
time periods required by the Exchange Act;
(i) for a period of 90 days from the date of the initial public offering
of the Shares not to directly or indirectly (i) offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, or file with the Commission a registration statement under the
Act relating to, any shares of Common Stock, or any securities of the Company
which are substantially similar to the Common Stock, or (ii) enter into any
swap, option, future, forward or other agreement that transfers, in whole or
in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise without the prior written consent of the Underwriters, which shall
not be unreasonably withheld, other than (i) the Shares to be sold hereunder,
(ii) shares of Common Stock to be issued by the Company pursuant to the terms
of that certain Master Settlement Agreement dated as of June 24, 2003, among
the Company and the other parties named therein, as may be amended from time
to time, (iii) any shares of Common Stock of the Company issued upon the
conversion of any convertible debentures, convertible preferred stock or
other convertible securities or the exercise of options, warrants and rights,
in each case, outstanding on the date of the Prospectus, (iv) the issuance of
shares of Common Stock in connection with the Company's offer to exchange its
outstanding 9% Equity Security Units, (v) stock issued upon the exercise of
options granted or under existing employee stock purchase plans, or the grant
of stock options and restricted stock under the Company's employee equity
plans or (vi) shares issued under the Company's direct stock purchase and
dividend reinvestment plan or (vii) shares of Common Stock held by the El
Paso Corporation Pension Plan which may be sold by that Plan;
(j) to use the net proceeds received by the Company from the sale of the
Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds"; and
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(k) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
reasonable costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all
costs and expenses (i) incident to the preparation, issuance, execution and
delivery of the Shares, (ii) incident to the preparation, printing and filing
under the Securities Act of the Registration Statement, the Prospectus and
any supplemental prospectus (including in each case all exhibits, amendments
and supplements thereto), (iii) incurred in connection with the registration
or qualification of the Shares under the securities or blue sky laws of such
jurisdictions in the United States as the Underwriters may reasonably
designate (including fees of counsel for the Underwriters and its
disbursements), (iv) in connection with the listing of the Shares on The New
York Stock Exchange, (v) expenses related to any filing with the NASD, (vi)
in connection with the printing (including word processing and duplication
costs) and delivery of this Agreement, any blue sky survey and the furnishing
to the Underwriters and dealers of copies of the Registration Statement and
the Prospectus, including mailing and shipping, as herein provided, (vii) any
expenses incurred by the Company in connection with a "road show"
presentation to potential investors, (viii) the cost of preparing stock
certificates and (ix) the cost and charges of any transfer agent and any
registrar provided that, except as otherwise provided herein, the
Underwriters shall pay their own costs and expenses including the fees and
expenses of their counsel and any transfer taxes on the Shares which they may
sell and the expenses of advertising any offering of the Shares made by the
Underwriters.
6. The obligations of the Underwriters hereunder to purchase the Shares on
the Closing Date are subject to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment shall be in effect, and no
proceedings for such purpose shall be pending before or threatened by the
Commission; the Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Securities Act and in accordance with
Section 5(a) hereof; and all requests for additional information shall have
been complied with to the satisfaction of the Underwriters;
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(b) the representations and warranties of the Company contained herein are
true and correct on and as of the Closing Date as if made on and as of the
Closing Date and the Company shall have complied with all agreements and all
conditions on its part to be performed or satisfied hereunder at or prior to
the Closing Date;
(c) subsequent to the execution and delivery of this Agreement and prior
to the Closing Date there shall not have occurred any downgrading, nor shall
any notice have been given of (i) any downgrading, (ii) any intended or
potential downgrading or (iii) any review or possible change that does not
indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(d) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the financial condition, business, properties or
results of operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the effect of
which in the sole judgment of the Underwriters, makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
on the Closing Date on the terms and in the manner contemplated in the
Prospectus; and neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by REFERENCE in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus;
(e) the Underwriters shall have received on and as of the Closing Date a
certificate of an executive officer of the Company, with specific knowledge
about the Company's financial matters, satisfactory to the Underwriters to
the effect set forth in subsections (a) through (d) of this Section and to
the further effect that there has not occurred any material adverse change,
or any development involving a prospective material adverse change, in or
affecting the financial condition, business, properties or results of
operations of the Company and its subsidiaries taken as a whole from that set
forth or contemplated in the Registration Statement;
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(f) ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company, shall have
furnished to the Underwriters their written opinion, dated the Closing Date
in form and substance satisfactory to the Underwriters, to the effect that:
(i) the Shares have been duly authorized and are validly issued, fully
paid and non-assessable; and the authorized capital stock of the Company
conform, as to legal matters, in all material respects to the description
thereof contained in the Company's Form 8-A/A, as amended, filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus;
(ii) 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 or sale of the Shares by the Company, except such as have been
obtained and made under the Securities 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, this Agreement, and the issuance and
sale by the Company of the Shares will not violate (i) any provision of
applicable United States federal law, New York law or Delaware General
Corporation Law, or (ii) the Certificate of Incorporation or Bylaws of the
Company, and the Company has full power and authority to authorize, issue
and sell the Shares as contemplated by this Agreement;
(iv) the Registration Statement has become effective under the Securities
Act, the Prospectus was filed with the Commission pursuant to Rule 424(b)
of the rules and regulations of the Commission thereunder, and to such
counsel's knowledge, 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 Securities Act, and the Registration Statement, as
of its effective date, 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
Securities Act and the rules and regulations of the Commission thereunder;
the descriptions in the Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents are
accurate in all material respects and fairly present in all
-14-
material respects the information required to be shown; and such counsel
does 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 not express an opinion as to the
financial statements and schedules or other financial data contained in
the Registration Statement or the Prospectus;
(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 data included or incorporated
by reference therein or omitted therefrom, as to which such counsel need
not express an 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 an
opinion) appeared on their face to be appropriately responsive in all
material respects with the requirements of the Securities Act;
(vi) this Agreement has been duly authorized, executed and delivered by
the Company; and
(vii) the Company is not and, after giving effect to the offering and sale
of the Shares 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.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the States of Delaware, New York and Texas, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
counsel) of other counsel reasonably acceptable to the Underwriters' counsel,
familiar with the applicable laws; and (B) as to matters of fact, to the extent
such counsel deems proper, on certificates
-15-
of responsible officers of the Company and certificates or other written
statements of officials of jurisdictions having custody of documents respecting
the corporate existence or good standing of the Company. The opinion of such
counsel for the Company shall state that the opinion of any such other counsel
upon which they relied is in form satisfactory to such counsel and, in such
counsel's opinion, the Underwriters and it is justified in relying thereon.
In addition, such counsel shall state that in the course of the
preparation by the Company of the Registration Statement and the Prospectus
(including the 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. Between the date of effectiveness of the Registration Statement and
the Closing Date, such counsel participated in additional conferences with
certain officers and representatives of the Company, the Company's independent
accountants, the Underwriters and counsel for the Underwriters at which portions
of the Registration Statement and the Prospectus were discussed. Such counsel
need not pass upon and or assume any responsibility for the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Registration Statement or the Prospectus nor make an
independent check or verification thereof, except as specifically described in
the opinion in paragraphs (iv) and (v) above. Such counsel shall further state
that, subject to the foregoing, no facts have come to such counsel's attention
that have caused them to believe that the Registration Statement, at the time it
became effective, contained or incorporated by reference 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 not misleading, or
that Prospectus, as of its date, contained or incorporated by reference any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Also, subject to the foregoing, such
counsel shall state that no facts have come to such counsel's attention in the
course of the proceedings described in the first and second sentences of this
paragraph that caused them to believe that the Prospectus as of the Closing Date
contains or incorporates by reference any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Such counsel need express no belief, however, with respect to
financial statements, schedules or notes thereto or other financial data
-16-
included or incorporated by reference in or omitted from the
Registration Statement or Prospectus.
The opinion of ▇▇▇▇▇ Liddell & ▇▇▇▇ LLP described above shall
be rendered to the Underwriters at the request of the Company and shall
so state therein;
(g) ▇▇▇▇▇▇ ▇. ▇▇▇▇, Associate General Counsel for the Company,
shall have furnished to the Underwriters his written opinion, dated the
Closing Date in form and substance satisfactory to the Underwriters, 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, properties, 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 compliance by the Company with all the
provisions hereof 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,
properties, financial condition or results of operation of the
Company and its subsidiaries, taken as a whole;
(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
-17-
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; and
(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, properties,
financial condition or results of operation of the Company and
its subsidiaries, taken as a whole.
The opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇ described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein;
(h) on the Closing Date, each of PricewaterhouseCoopers LLP
and Deloitte & Touche LLP shall have furnished to the Underwriters
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, containing statements and information of
the type customarily included in accountants'
-18-
"comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus;
(i) the Underwriters shall have received on and as of the
Closing Date an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP counsel to the
Underwriters, with respect to the due authorization and valid issuance
of the Shares, the Registration Statement, the Prospectus and other
related matters as the Underwriters may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(j) the "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you on the one hand and each of the
executive officers and directors of the Company, on the other hand,
relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the
date hereof, shall be in full force and effect on the Closing Date; and
(k) on or prior to the Closing Date the Company shall have
furnished to the Underwriters such further certificates and documents
as they shall reasonably request.
7. The Company agrees to indemnify and hold harmless each
Underwriter, each affiliate of any Underwriter which assists the Underwriters in
the distribution of the Shares and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal fees and other
expenses reasonably incurred in connection with any suit, action or proceeding
or any claim asserted as such expenses are incurred) insofar as such losses,
claims, damages or liabilities are (i) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (the term Prospectus for the purpose of this Section 7 being
deemed to include the Prospectus and the Prospectus as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) or
(ii) caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided in any case that the Company shall not be liable to the
extent that such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by the Underwriters expressly 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 the paragraph
below.
-19-
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to each Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, 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 table in the first paragraph, the concession and
reallowance figures and the last sentence in the fourth paragraph, the sixth
paragraph, the seventh paragraph (other than the last sentence),and the eighth
paragraph under the caption "Underwriting."
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding. In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm (in addition to any
local counsel) for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. Any such separate firm for the
Underwriters, each affiliate of the Underwriters which assists the Underwriters
in the distribution of the Shares and such control persons of the Underwriters
shall be designated in writing by the Underwriters and any such separate firm
for the Company, its directors, its officers who sign the Registration Statement
and such control persons of the Company shall be designated in writing by the
Company. The Indemnifying
-20-
Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff in any such action, the Indemnifying Person agrees to
indemnify and hold harmless any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first or second
paragraphs of this Section 7 is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (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 hand from the offering of the Shares 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 hand in connection with the statements or
omissions that 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 hand shall be
deemed to be in the same respective proportions as the net proceeds from the
offering (before deducting expenses) received by the Company and the total
underwriting discounts received by the Underwriters, in each case as set forth
in the table on the cover of the Prospectus, bear to the aggregate public
offering price of the Shares. The relative fault of the Company on the one hand
and the Underwriters on the other hand 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
-21-
to information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall any
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this paragraph to contribute are several in proportion to their underwriting
obligations and not joint.
The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Underwriters or any person controlling the Underwriters or by or
on behalf of the Company, its officers or directors or any other person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
8. Notwithstanding anything herein contained, this Agreement
may be terminated in the absolute discretion of the Underwriters, by notice
given by the Underwriters to the Company, if after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange or the American Stock Exchange or the Nasdaq
-22-
National Market, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) any change in
U.S. or international financial, political or economic conditions or currency
exchange rates or exchange controls as would in the sole judgment of the
Underwriters, be likely to prejudice materially the success of the proposed
issue, sale or distribution of the Shares, whether in the primary market or in
respect of dealings in the secondary market, (iv) a general moratorium on
commercial banking activities in New York shall have been declared by either
federal or New York State authorities, or if there has been a material
disruption in securities settlement or clearance services in the United States,
or (iv) there shall have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis that, in the sole
judgment of the Underwriters, is material and adverse and which, in the sole
judgment of the Underwriters, makes it impracticable or inadvisable to market
the Shares being delivered at the Closing Date on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon execution and
delivery hereof by the parties hereto.
10. If any Underwriter defaults in its obligations to purchase
Shares hereunder on the Closing Date and the aggregate principal amount of
Shares that such defaulting Underwriter agreed but failed to purchase does not
exceed 10% of the total principal amount of Shares that the Underwriters are
obligated to purchase on such Closing Date, the non-defaulting Underwriter may
make arrangements satisfactory to the Company for the purchase of such Shares by
other persons, including such non-defaulting Underwriter, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriter shall
be obligated to purchase the Shares that such defaulting Underwriter agreed but
failed to purchase on such Closing Date. If any Underwriter so defaults and the
aggregate principal amount of Shares with respect to which such default occurs
exceeds 10% of the total principal amount of Shares that the Underwriters are
obligated to purchase on such Closing Date and arrangements satisfactory to the
non-defaulting Underwriter and the Company for the purchase of such Shares by
other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of such non-defaulting Underwriter
or the Company. 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.
11. If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform
-23-
its obligations under this Agreement or any condition of the Underwriters'
obligations cannot be fulfilled, the Company agrees to reimburse the
Underwriters for all out-of-pocket expenses (including the fees and expenses of
its counsel) reasonably incurred by the Underwriters in connection with this
Agreement or the offering contemplated hereunder and upon demand the Company
shall pay the full amount thereof to the Underwriters.
12. This Agreement shall inure to the benefit of and be
binding upon the Company, the Underwriters, each affiliate of the Underwriters
which assists the Underwriters in the distribution of the Shares, directors and
officers of the Company any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Shares from
the Underwriters shall be deemed to be a successor by reason merely of such
purchase.
13. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
given to Deutsche Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, attention: Syndicate Manager (telefax: ▇▇▇ ▇▇▇ ▇▇▇▇) and to ▇.▇. ▇▇▇▇▇▇
Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telefax:
212-648-5552); Attention: Syndicate Department. Notices to the Company shall be
given to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; Attention: Legal
Department (telefax: 713-420-4099).
14. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
16. 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.
17. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section,
-24-
paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes) as
are necessary to make it valid and enforceable.
18. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. In this Agreement, the masculine, feminine and neuter
genders and the singular and plural include one another. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and the Underwriters.
-25-
If the foregoing is in accordance with your understanding,
please sign and return five counterparts hereof.
Very truly yours,
EL PASO CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Accepted as of the date first written above:
DEUTSCHE BANK SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ Mit Mehta
-------------------------------------
Name: Mit Mehta
Title: Vice President
-26-
EXECUTION COPY
SCHEDULE I
Number of
Underwriter Underwritten Shares
----------- -------------------
Deutsche Bank Securities Inc............................ 4,395,218
▇.▇. ▇▇▇▇▇▇ Securities Inc. ............................ 4,395,218
---------
Total.......................................... 8,790,436
=========
EXECUTION COPY
SCHEDULE II
Significant Subsidiaries
El Paso Natural Gas Company
El Paso Tennessee Pipeline Co.
Southern Natural Gas Company
El Paso Production Holding Company
El Paso CGP Company
Tennessee Gas Pipeline Company
ANR Pipeline Company
EXECUTION COPY
EXHIBIT A
[Form of Lock-Up Agreement]
Deutsche Bank Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
On behalf of the Underwriters
named in Schedule I to the Underwriting Agreement
Re: El Paso Corporation - Common Stock Offering
Ladies and Gentlemen:
The undersigned understands that you have entered into an
Underwriting Agreement (the "Underwriting Agreement") with El Paso Corporation,
a Delaware corporation (the "Company"), providing for the public offering (the
"Public Offering") by you (the "Underwriters") of Common Stock, par value $3.00
per share (the "Common Stock"), of the Company. Capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the Underwriting
Agreement.
In consideration of your agreement to purchase and make the
Public Offering of the Common Stock, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without your prior written consent, which shall not be unreasonably
withheld, the undersigned will not, for so long as the undersigned is an officer
or director of the Company and during the period (the "Lock-Up Period") ending
45 days after the date of the prospectus relating to the Public Offering (the
"Prospectus"), (1) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, or publicly disclose the
intention to do any of the foregoing, any shares of Common Stock of the Company
or any securities convertible into or exercisable or exchangeable for Common
Stock (including, but not limited to, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and
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Exchange Commission and securities which may be issued upon exercise of a stock
option or warrant) other than (A) as a bona fide gift or bona fide gifts,
provided, however, that the recipient of such bona fide gift or bona fide gifts
shall execute a copy of and be bound by the terms of, this Agreement prior to
such transfer or (B) the sale of any shares of Common Stock acquired upon the
exercise of options granted under the Company's stock option or stock incentive
plans that would otherwise expire during the Lock-Up Period or (C) the adoption
of a written plan for trading securities consistent with Rule 10b5-1 of the
Securities Exchange Act of 1934, as amended, as long as any sales under such
written plan occur after the Lock-Up Period or (2) enter into any swap, option,
future, forward or other agreement that transfers, in whole or in part, any of
the economic consequences of ownership of the Common Stock or any securities of
the Company which are substantially similar to the Common Stock, including, but
not limited to, any security convertible into or exercisable or exchangeable for
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. In addition, the undersigned agrees that, without the prior
written consent of the Underwriters, which shall not be unreasonably withheld,
it will not, during the period ending 45 days after the date of the Prospectus,
make any demand for or exercise any right with respect to, the registration of
any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
In furtherance of the foregoing, the Company and any duly
appointed transfer agent for the registration or transfer of the securities
described herein are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
Lock-Up Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Agreement.
All authority herein conferred or agreed to be conferred and any obligations of
the undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting
Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Common Stock
to be sold thereunder, this Lock-Up Agreement shall terminate and be of no
further force or effect, and the undersigned shall be released from all
obligations under this Lock-Up Agreement.
The undersigned understands that the Underwriters propose to
proceed with the Public Offering in reliance upon this Lock-Up Agreement.
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THIS LOCK-UP AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
Very truly yours,
By:
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Name:
Title:
