Exhibit 1-(2)
SONAT INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT STANDARD PROVISIONS
September 25, 1997
Sonat Inc., a Delaware corporation (the "Company"), proposes to issue and
sell from time to time certain of its debt securities ("Debt Securities")
registered under the Securities Act of 1933 (the "Securities Act") as set forth
in Section 3. The Debt Securities are to be issued under an indenture, dated as
of June 1, 1986 as amended or supplemented from time to time (the "Indenture"),
between the Company and The Chase Manhattan Bank, as successor by merger to
Manufacturers Hanover Trust Company, as Trustee (the "Trustee").
From time to time, the Company may enter into one or more underwriting
agreements that provide for the sale of the Debt Securities to the underwriter
or several underwriters named therein (the "Underwriters"). The standard
provisions set forth herein may be incorporated by reference in any such
underwriting agreement (an "Underwriting Agreement"). The Underwriting
Agreement, including the provisions hereof incorporated therein by reference, is
herein referred to as this Agreement.
1. SALE AND PURCHASE OF THE DEBT SECURITIES. On the basis of the
representations, warranties and agreements herein contained, the Company
proposes to issue and sell the Debt Securities in one or more series, which
series may vary as to their terms (including, but not limited to, interest rate,
maturity, any redemption provisions and any sinking fund requirements), all of
such terms for any particular series being determined at the time of sale. All
or a portion of a particular series of the Debt Securities will be purchased by
the Underwriters for resale upon terms of offering determined at the time of
sale. The Debt Securities so to be purchased in any such offering are
hereinafter referred to as the "Purchased Securities", and any firm or firms
acting as representatives of such Underwriters are hereinafter referred to as
the "Representatives". If with respect to the Purchased Securities such
Representatives are acting on behalf of the Underwriters, references herein to
the Underwriters (or a majority in interest thereof) or the Representatives in
the alternative shall be deemed to refer only to the Representatives. The term
"Underwriters' Securities" means Purchased Securities other than Contract
Securities. The term "Contract Securities" means Purchased Securities, if any,
to be purchased pursuant to delayed delivery contracts referred to below.
If this Agreement provides for sales of Purchased Securities pursuant to
delayed delivery contracts, the Company hereby authorizes the Underwriters to
solicit offers to purchase Contract Securities on the terms and subject to the
conditions set forth in the Prospectus (as hereinafter
defined) pursuant to delayed delivery contracts substantially in the form of
Schedule I attached hereto (the "Delayed Delivery Contracts") but with such
changes therein as the Company may authorize or approve. Delayed Delivery
Contracts are to be with institutional investors approved by the Company and of
the types set forth in the Prospectus. On the Closing Date (as hereinafter
defined), the Company will pay the Underwriters the fee set forth in the
Underwriting Agreement in respect of the principal amount of Contract
Securities. The Underwriters will not have any responsibility in respect of the
validity or the performance of Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the Contract Securities shall be deducted from the
Purchased Securities to be purchased by the several Underwriters and the
aggregate principal amount of Purchased Securities to be purchased by each
Underwriter shall be reduced pro rata in proportion to the principal amount of
Purchased Securities set forth opposite each Underwriter's name in the
Underwriting Agreement, except to the extent that the Representatives, if any,
determine that such reduction shall be otherwise and so advise the Company.
The obligations of the Underwriters under this Agreement are several and
not joint.
2. PAYMENT AND DELIVERY. Delivery by the Company of the Underwriters'
Securities and payment by the Underwriters therefor by wire transfer to the
Company's account in immediately available funds, or, if the Underwriters'
Securities are denominated in a currency or currencies other than United States
Dollars, by such other means specified in this Agreement, shall take place at
the office, on the date and at the time specified in this Agreement, which date
and time may be postponed for not more than twelve business days by agreement
between a majority in interest of the Underwriters or the Representatives and
the Company (such date and time of delivery and payment for the Underwriters'
Securities is hereinafter referred to as the "Closing Date").
The Underwriters' Securities shall be registered in such names and shall be
in such denominations as the Underwriters or Representatives shall request at
least two full business days (or such lesser number of days as shall be
specified in the Underwriting Agreement) prior to the Closing Date and shall be
made available to the Underwriters or Representatives for checking and packaging
at least one full business day prior to the Closing Date.
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The Company
has filed with the Securities and Exchange Commission (the "Commission"),
pursuant to the Securities Act and the rules and regulations adopted by the
Commission thereunder (the "Rules"), a registration statement on Form S-3,
including a prospectus, relating to the Debt Securities, and such registration
statement has become effective. The Company will file with, or mail for filing
to, the Commission a prospectus supplement specifically relating to the
Purchased Securities pursuant to Rule 424 under the Securities Act (the
"Prospectus Supplement"). The term "Registration Statement" means the
registration statement, including financial statements, exhibits and
Incorporated Documents (as hereinafter defined) as amended to the date of this
Agreement. The term "Basic Prospectus" means the prospectus included in the
Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus
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Supplement. The term "Preliminary Prospectus" means the Basic Prospectus
together with a preliminary prospectus supplement specifically relating to the
Purchased Securities. As used herein, the terms "Registration Statement",
"Basic Prospectus", "Prospectus" and "Preliminary Prospectus" shall include in
each case all documents incorporated, or deemed to be incorporated, therein by
reference pursuant to the requirements of Item 12 of Form S-3 under the
Securities Act (the "Incorporated Documents"), and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to any of the foregoing
documents shall be deemed to refer to and include the filing of any Incorporated
Documents after the date of this Agreement.
The Company understands that the Underwriters propose to make a public
offering of the Purchased Securities, as set forth in and pursuant to the
Prospectus relating thereto. The Company hereby confirms that the Underwriters
and any dealers selected by them are authorized to distribute such Prospectus
(as from time to time further amended or supplemented if the Company furnishes
amendments or supplements thereto to the Underwriters in addition to the
Prospectus Supplement).
4. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to each Underwriter that:
(a) The Company meets the requirements for the use of Form S-3 under
the Securities Act.
(b) The Registration Statement, at the time it became effective, and
the Prospectus contained therein, complied, and on the date of the
Prospectus Supplement and when any amendment to the Registration Statement
becomes effective or any supplement to the Prospectus is filed with the
Commission, the Registration Statement, the Prospectus and any such
amendment or supplement, respectively, will comply, fully in all material
respects with the requirements of the Securities Act and the Rules; the
Incorporated Documents comply and will comply fully in all material
respects with the requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules and regulations adopted by the Commission
thereunder; the Indenture complies and will comply fully in all material
respects with the requirements of the Trust Indenture Act of 1939 (the
"Trust Indenture Act"); and at the date of the Prospectus Supplement, at
the date of any further amendment to the Registration Statement or
supplement to the Prospectus and at the Closing Date, the Registration
Statement and Prospectus 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 not misleading, except that this
representation and warranty does not apply to (i) statements or omissions
in the Registration Statement or Prospectus (or in amendments or
supplements thereto) made in reliance upon information furnished in writing
to the Company by any Underwriter or the Representatives on behalf of any
Underwriter expressly for use therein; or (ii) that part of the
Registration Statement which shall constitute the Statement of Eligibility
of the Trustee under the Trust Indenture Act on Form T-1, except statements
or omissions in such Statement made in reliance upon information furnished
in writing to the Trustee on behalf of the Company for use therein.
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(c) The certificate delivered pursuant to paragraph (d) of Section 5
hereof in connection with the issuance and sale of the Underwriters'
Securities will be, on the date on which it is delivered, in all material
respects true and complete.
5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder to purchase and pay for the Underwriters' Securities are
subject to the following conditions:
(a) No order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall be
pending before or threatened by the Commission and any request for
additional information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Underwriters or the
Representatives.
(b) Subsequent to the execution of this Agreement, (i) there shall
not have been any change in the capital stock or long term debt of the
Company and its subsidiaries, (ii) there shall not have been any change on
a consolidated basis in the general affairs, management, financial position
or results of operations of the Company and its subsidiaries taken as a
whole, whether or not arising from transactions in the ordinary course of
business, in each case other than as set forth in or contemplated by the
Registration Statement and Prospectus, (iii) the Company and its
subsidiaries shall not have sustained any material loss or interference
with their business taken as a whole from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
any court or legislative or other governmental action, order or decree,
which is not set forth in the Registration Statement and Prospectus,
(iv) no downgrading shall have occurred in the rating accorded the
Company's debt securities by Standard & Poor's Corporation or ▇▇▇▇▇'▇
Investors Service, Inc. and (v) if the Underwriters' Securities are
denominated in a currency or currencies other than United States Dollars,
there shall not have occurred any action by any governmental authority or
any change involving currency exchange rates or exchange controls, if in
the reasonable judgment of a majority in interest of the Underwriters or
the Representatives any such development referred to in clause (i), (ii),
(iii), (iv) or (v) is so material and adverse as to make it impracticable
or inadvisable to consummate the sale and delivery of the Underwriters'
Securities by the Underwriters as contemplated in the Prospectus.
(c) The representations and warranties of the Company contained
herein shall be true and correct on and as of the Closing Date and the
Company shall have performed all covenants and agreements herein contained
to be performed on its part at or prior to the Closing Date.
(d) The Underwriters or the Representatives shall have received on
the Closing Date a certificate, dated the Closing Date, of the Chairman of
the Board, the Vice Chairman of the Board, the President, any Vice
President or the Treasurer and the chief financial or chief accounting
officer of the Company, which shall certify that (i) no order
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suspending the effectiveness of the Registration Statement or prohibiting
the sale of the Purchased Securities has been issued and no proceedings for
such purpose are pending before or, to the knowledge of such officers,
threatened by the Commission and (ii) the representations and warranties of
the Company contained herein are true and correct on and as of the Closing
Date and the Company has performed all covenants and agreements herein
contained to be performed on its part at or prior to the Closing Date.
(e) Within 24 hours after the execution of the Underwriting Agreement
by the Company (or at such later time acceptable to the Representatives, or
if there are none, such firm as may be designated by a majority in interest
of the Underwriters) and on the Closing Date, the Representatives or such
designated firm shall have received signed letters from Ernst & Young,
dated the date of delivery, (i) in the case of the first such letter,
substantially identical to the proposed form of such letter previously
delivered to the Representatives or such designated firm; and (ii) in the
case of the second such letter, confirming, on the basis of a review in
accordance with the procedures set forth in the first such letter, that
nothing has come to their attention from the date of the most recent
financial statements of the Company filed with the Commission, audited or
interim, as the case may be, to a date not more than six days prior to the
Closing Date which would require any change in the first such letter if it
were required to be dated and delivered on the Closing Date, except in each
case as described in the second such letter.
(f) The Underwriters or the Representatives shall have received on
the Closing Date from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP an opinion, dated the
Closing Date, substantially identical to the form of their opinion attached
hereto as Annex A.
(g) The Underwriters or the Representatives shall have received on
the Closing Date from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters,
opinions dated the Closing Date, with respect to the Company, the
Underwriters' Securities, the Registration Statement and Prospectus and
this Agreement. Such opinions shall be satisfactory in all respects to the
Underwriters or the Representatives, and the Company shall have furnished
to counsel for the Underwriters such documents as they may reasonably
request for the purpose of enabling them to render such opinions.
(h) Subsequent to execution of this Agreement there shall not have
occurred any of the following: (x) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or (y) a
general moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities.
(i) The Company shall have complied with the provisions of
Section 6(d) hereof with respect to the furnishing of prospectuses on the
New York business day next succeeding the date of this Agreement.
6. COVENANTS. The Company covenants and agrees as follows:
(a) To advise the Underwriters or the Representatives promptly of any
amendment or supplementation of the Registration Statement or the
Prospectus (excluding the
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filing of Incorporated Documents) prior to the termination of the
distribution of the Underwriters' Securities, to furnish the Underwriters
or the Representatives with a copy of such amendment or supplementation,
and not to file any such amendment or supplementation to which a majority
in interest of the Underwriters or the Representatives shall reasonably
object.
(b) As soon as the Company is advised thereof, to advise the
Underwriters or the Representatives (i) of the initiation or threatening by
the Commission of any proceedings for the issuance of any order suspending
the effectiveness of the Registration Statement, or the qualification of
the Indenture, and (ii) of receipt by the Company or any representative or
attorney of the Company of any other communication from the Commission
relating to the Company, the Registration Statement, any Preliminary
Prospectus or the Prospectus. The Company will make every reasonable
effort to prevent the issuance of an order suspending the effectiveness of
the Registration Statement or the qualification of the Indenture and if any
such order is issued to obtain as soon as possible the lifting thereof.
(c) To deliver, without charge, to the counsel for the Underwriters,
three signed copies of the registration statement, including exhibits and
Incorporated Documents, relating to the Debt Securities in the form it
became effective and of all amendments thereto, including exhibits.
(d) Prior to 10:00 a.m., New York City time, on the business day next
succeeding the date of the Underwriting Agreement, to furnish the
Underwriters with copies of the Prospectus in New York City in such
quantities as the Representatives may reasonably request, and during such
period as a prospectus is required by law to be delivered in connection
with sales of Purchased Securities by an Underwriter or dealer, to deliver
to the Representatives or to Underwriters and dealers, at such office or
offices as the Underwriters or the Representatives may designate, as many
conformed copies of the Indenture, the Registration Statement (excluding
exhibits but including the Incorporated Documents), each Preliminary
Prospectus, the Prospectus and all amendments and supplements to such
documents as the Underwriters or the Representatives may reasonably
request.
(e) During the period in which copies of the Prospectus are to be
delivered as provided in paragraph (d) above, if any event occurs as a
result of which it shall be necessary to amend or supplement the Prospectus
in order to make the statements therein not misleading or to file any
document which will be deemed an Incorporated Document in order to comply
with the Exchange Act and the rules and regulations thereunder, forthwith
(at its own expense, if such supplement or amendment is required at any
time within nine months from the first date upon which Purchased Securities
to which such Prospectus relates are offered to the public) to prepare and
file with the Commission either (i) amendments or supplements to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not be misleading or (ii) documents which will effect
such compliance. Delivery by Underwriters of any such amendments or
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supplements to the Prospectus or documents shall not constitute a waiver of
any of the conditions set forth in Section 5 hereof. In case any
Underwriter is required to deliver a Prospectus nine months or more after
the first date upon which the Purchased Securities to which such Prospectus
relates are offered to the public, the Company will, upon the request of
such Underwriter or the Representatives but at the expense of such
Underwriter, furnish such Underwriter with reasonable quantities of
prospectuses complying with Section 10(a)(3) of the Securities Act. The
Underwriters agree to use the Prospectus, as amended and supplemented from
time to time, in lieu of the Prospectus theretofore in effect.
(f) To make generally available to the Company's security holders, as
soon as practicable, but in no event later than 45 days after the end of
the 12-month period beginning at the end of the Company's fiscal quarter
during which the filing of the Prospectus pursuant to Rule 424 under the
Securities Act occurs (except not later than 95 days if such filing date is
in the quarter ending December 31), an earning statement which satisfies
the provisions of Section 11(a) of the Securities Act.
(g) To take such action as the Underwriters or the Representatives
may reasonably request in order to qualify the Purchased Securities for
offer and sale under the securities or "blue sky" laws of such
jurisdictions as the Underwriters or the Representatives may reasonably
request; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in
suits, other than those arising out of the offering or sale of the
Purchased Securities, in any jurisdiction where it is not now so subject.
(h) During the period of five years from the date of this Agreement,
to supply to the Representatives, if any, and to each other Underwriter who
may so request in writing, a copy of each annual or other report it shall
be required to file with the Commission.
(i) To pay, or reimburse if paid by the Underwriters or the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all reasonable costs and
expenses incident to the performance of the obligations of the Company
under this Agreement, including those relating to (i) the preparation,
printing and filing of the Registration Statement and exhibits thereto,
each Preliminary Prospectus, the Prospectus, all amendments and supplements
to the Registration Statement and the Prospectus (except as provided in
paragraph (e) above), and the printing of the Underwriting Agreements
(including the Agreement Among Underwriters, if any, and the Agreements
With Dealers, if any), (ii) the issuance of the Purchased Securities and
the preparation and delivery of certificates for the Purchased Securities
to the Underwriters, (iii) the registration or qualification of the
Purchased Securities for offer and sale under the securities or "blue sky"
laws of the various jurisdictions referred to in paragraph (g) above,
including the fees and disbursements of counsel for the Underwriters in
connection therewith and the preparation and printing of
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preliminary or supplementary "blue sky" memoranda and legal investment
memoranda, (iv) the furnishing to the Representatives, if any, and the
Underwriters of copies of each Preliminary Prospectus, the Prospectus and
all amendments or supplements to the Prospectus (except as provided in
paragraph (e) above), and of the several documents required by this
Section 6 to be so furnished, including costs of shipping and mailing,
(v) the listing, if any, of the Purchased Securities on any national
securities exchange, (vi) the filing requirements of the National
Association of Securities Dealers, Inc., in connection with its review of
corporate financings, (vii) the rating of the Purchased Securities by
rating agencies, and (viii) the furnishing to the Representatives, if any,
and to the Underwriters of copies of all reports and information required
by paragraph (h) above, including costs of shipping and mailing; but the
Company shall not in any event be liable to any of the several Underwriters
for damages on account of loss of anticipated profits from the sale by them
of the Purchased Securities.
(j) To endeavor to obtain as promptly as practicable the listing of
the Purchased Securities on the national securities exchange designated in
the Underwriting Agreement if any such designation is made.
(k) To prepare the Prospectus as amended and supplemented in relation
to the applicable Purchased Securities in a form approved by the
Underwriters or the Representatives and to file (or transmit by means
reasonably calculated to result in filing) such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the Commission's close
of business on the second business day following the execution and delivery
of this Agreement or, if applicable, such earlier time as may be required
by Rule 424(b).
(l) As soon as the Company is advised thereof, to advise the
Underwriters of any suspension of the qualification of the Purchased
Securities for offering or sale in any jurisdiction or the initiation or
threatening of any proceeding for any such purpose. The Company will make
every reasonable effort to prevent the issuance of an order suspending the
effectiveness of the qualification of the Purchased Securities for offering
or sale, and if any such order is issued to obtain as soon as possible the
lifting thereof.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any and all losses, claims, damages and liabilities,
joint or several (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to which they,
or any of them, may become subject under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the ▇▇▇▇▇▇▇▇-
▇
tion Statement or the Prospectus, or any amendment or supplement thereto,
or 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, except insofar as any such untrue statement or omission or
alleged untrue statement or omission was made in (i) such Preliminary
Prospectus, the Registration Statement or the Prospectus, or such amendment
or supplement, in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
expressly for use in the preparation thereof or (ii) that part of the
Registration Statement which constitutes the Statement of Eligibility and
Qualification of the Trustee under the Trust Indenture Act other than any
such untrue statement or omission or alleged untrue statement or omission
made therein in reliance upon and in conformity with information furnished
in writing to the Trustee by or on behalf of the Company for use in the
preparation thereof; provided, however, that the foregoing indemnity
agreement against losses, claims, damages or liabilities is subject to the
condition that, insofar as it relates to any untrue statement or alleged
untrue statement, omission or alleged omission made in the Registration
Statement or any Preliminary Prospectus but eliminated or remedied in the
Prospectus (not including Incorporated Documents), such indemnity agreement
shall not inure to the benefit of any Underwriter from whom the person
asserting any loss, claim, damage or liability purchased the Underwriters'
Securities which are the subject thereof (or to the benefit of any person
who controls such Underwriter) if such Underwriter failed to send or give a
copy of the Prospectus (not including Incorporated Documents) (or, if the
Prospectus (not including Incorporated Documents) has been amended or
supplemented in the manner and under the circumstances specified in the
next following proviso clause and copies thereof have previously been
furnished by or on behalf of the Company to such Underwriter, then the
Prospectus (not including Incorporated Documents) as so amended or
supplemented) to such person at or prior to the time such action is
required by the Securities Act; provided further, that the foregoing
indemnity agreement is also subject to the condition that, insofar as it
relates to any untrue statement or alleged untrue statement, omission or
alleged omission made in the Prospectus attributable solely to facts or
events which occur after the date of this Agreement which untrue statement
or alleged untrue statement, omission or alleged omission is eliminated or
remedied in an amendment or supplement to the Prospectus (not including
Incorporated Documents), such indemnity agreement shall not inure to the
benefit of any Underwriter from whom the person asserting any loss, claim,
damage or liability purchased the Underwriters' Securities which are
subject thereof (or to the benefit of any person who controls such
Underwriter), if such Underwriter, having previously been furnished by or
on behalf of the Company with copies of the Prospectus (not including
Incorporated Documents) as so amended or supplemented, in lieu thereof
delivered to such person the Prospectus (not including Incorporated
Documents) without such amendment or supplement.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from
the Company to each Underwriter, but only insofar as such
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losses, claims, damages or liabilities arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which
was made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with information furnished in writing to the Company by such
Underwriter expressly for use in the preparation thereof.
(c) Any party which proposes to assert the right to be indemnified
under this Section 7 will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim is to be made against an indemnified party under this Section 7,
notify each such indemnifying party of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served, but the omission
so to notify such indemnifying party of any such action, suit or proceeding
shall not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 7. In case any such
action, suit or proceeding shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any
legal or other expenses, other than reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party has been authorized by the indemnifying
parties, (ii) the indemnified party shall have reasonably concluded that
there may be a conflict of interest between the indemnifying parties and
the indemnified party in the conduct of the defense of such action (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not in fact have employed counsel to assume the
defense of such action. An indemnifying party shall not be liable for any
settlement of any action or claim effected without its consent. For the
purposes of clause (ii) of the preceding sentence only, any indemnified
party or parties shall be represented by one counsel whom they may select
with the approval, which shall not be unreasonably withheld, of the
indemnifying parties.
8. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 7 is
applicable but for any reason, other than as specified in Section 7, is held to
be unavailable from the indemnifying party, then each indemnifying party shall,
in lieu of indemnifying such indemnified party, contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted), 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
Purchased Securities. If however, the allocation
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provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and then Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), 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 of Purchased Securities
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the Prospectus. 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 on the one hand or the
Underwriters on the other 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 contributions pursuant to this Section 8 were determined by PRO RATA
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. Notwithstanding
the provisions of this Section 8, (i) in no case shall any Underwriter (except
as may be provided in the Agreements Among Underwriters, if any) be responsible
for any amount in excess of the sum of the underwriting discount applicable to
the Underwriters' Securities purchased by such Underwriter hereunder and
commissions received for sales of Contract Securities, if any, and (ii) 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. For purposes of
this Section 8, each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of the Securities Act and the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 8. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 8, notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section 8. No party shall be liable for
contribution with respect to any action or claim settled without its written
consent. The Underwriters' obligations under this section to contribute are
several in proportion to their respective underwriting obligations and not
joint.
11
9. TERMINATION. This Agreement may be terminated by the Representatives
or by Underwriters who have agreed to purchase in the aggregate at least 50% of
the principal amount of the Underwriters' Securities by notifying the Company at
any time
(a) at or prior to the Closing Date if, in the judgment of the
Representatives or in the judgment of such Underwriters, as the case may
be, payment for and delivery of the Underwriters' Securities is rendered
impracticable or inadvisable because (i) any event shall have occurred or
shall exist which makes untrue or incorrect in any material respect any
statement or information contained in the Registration Statement or
Prospectus or which is not reflected in the Registration Statement or
Prospectus but should be reflected therein in order to make the statements
or information contained therein not misleading in any material respect, or
(ii) the declaration by the United States of a national emergency or war
shall have occurred, or there shall have occurred an outbreak or escalation
of hostilities involving the United States to such an extent as, in the
judgment of the Underwriters, to affect materially and adversely the
marketability of the Underwriters' Securities; or
(b) at or prior to the Closing Date, if any of the conditions
specified in Section 5 hereof shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of the provisions hereof,
except as otherwise provided in Sections 6(i), 7 and 10 hereof, the Company
shall not be under any liability to any Underwriter and no Underwriter shall be
under any liability to the Company, except that (a) if this Agreement is
terminated by the Representatives or 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, the Company will reimburse the Underwriters
for all their reasonable out-of-pocket expenses up to $20,000 (including the
fees and disbursements of their counsel) and (b) no Underwriter who shall have
failed or refused to purchase the Underwriters' Securities agreed to be
purchased by it hereunder, without some reason sufficient hereunder to justify
its cancellation or termination of its obligations hereunder, shall be relieved
of liability to the Company or to the other Underwriters for damages occasioned
by its default.
10. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the termination of
this Agreement) to purchase on the Closing Date the Underwriters' Securities
agreed to be purchased by such Underwriter or Underwriters on such Closing Date,
the Representatives or, if there are none, such firm as may be designated by a
majority in interest of the Underwriters, may find one or more substitute
underwriters to purchase such Underwriters' Securities, or make such other
arrangements as they may deem advisable or one or more of the remaining
Underwriters may agree to purchase such Underwriters' Securities in such
proportions as may be approved by the Representatives or such designated firm,
in each case upon the terms herein set forth. If no such arrangements have been
made within 24 hours after the Closing Date, and
(a) the aggregate principal amount of Underwriters' Securities to be
purchased by the defaulting Underwriters on the Closing Date shall not
exceed 10% of
12
the total principal amount of Underwriters' Securities that the
Underwriters are obligated to purchase on the Closing Date, each of the
nondefaulting Underwriters shall be obligated to purchase such
Underwriters' Securities on the terms herein set forth in proportion to
their respective obligations hereunder; or
(b) the aggregate principal amount of Underwriters' Securities to be
purchased by the defaulting Underwriters on the Closing Date shall exceed
10% of the total principal amount of Underwriters' Securities that the
Underwriters are obligated to purchase on the Closing Date, the Company
shall be entitled to an additional period of 24 hours within which to find
one or more substitute underwriters satisfactory to the Representatives or
such designated firm, to purchase such Underwriters' Securities upon the
terms set forth herein.
In any such case, either the Representatives or such designated firm or the
Company shall have the right to postpone the Closing Date for a period of not
more than five business days in order that necessary changes and arrangements
may be effected. If neither the non-defaulting Underwriters nor the Company
shall make arrangements pursuant to clause (b) of this Section 10 within the
period stated for the purchase of the Underwriters' Securities which such
defaulting Underwriters agreed to purchase, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter to the Company
and without liability on the part of the Company, except, in both cases, as
provided in Section 7, 8 and 9 hereof. The provisions of this Section 10 shall
not in any way affect the liability of any defaulting Underwriter to the Company
or the non-defaulting Underwriters arising out of such default.
11. MISCELLANEOUS. The representations, warranties and covenants of the
Company in this Agreement shall remain in full force and effect regardless of
(a) any investigation made by or on behalf of any Underwriter or controlling
person or by or on behalf of the Company or any controlling person, director or
officer, and (b) delivery of and payment for the Purchased Securities under this
Agreement. The indemnification and reimbursement agreements contained in
Sections 7 and 8 hereof shall remain in full force and effect regardless of any
termination of this Agreement.
This Agreement has been and is made solely for the benefit of the
Underwriters and the Company, and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters or the Company, directors and officers of the Company and their
respective successors and assigns, and no other person, partnership, association
or corporation shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
Purchased Securities from any Underwriter merely because of such purchase.
In all dealings hereunder, the Representatives, if designated, shall act on
behalf of each of the Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by such firm as the Representatives may designate to
the Company.
13
Except as otherwise provided in this Agreement, all notices and communications
hereunder shall be in writing and mailed or delivered, or by telephone or
telegraph if subsequently confirmed in writing, to the Underwriters at their
addresses furnished to the Company in writing, and to the Company at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
14
SCHEDULE I
DELAYED DELIVERY CONTRACT
__________, 19__
Dear Sirs:
The undersigned hereby agrees to purchase from Sonat Inc., a Delaware
corporation (the "Company"), and the Company agrees to sell to the undersigned
$
principal amount of the Company's [state title of issue] (the "Securities"),
offered by the Company's Prospectus dated , 19__ and Prospectus
Supplement dated , 19__, receipt of copies of which is hereby
acknowledged, at a purchase price of % of the principal amount thereof plus
accrued interest and amortization, if any, and on the further terms and
conditions set forth in this contract. The undersigned does not contemplate
selling Securities prior to making payment therefor.
The undersigned will purchase from the Company Securities in the principal
amounts and on the delivery dates set forth below:
PLUS ACCRUED
INTEREST AND
AMORTIZATION, IF
DELIVERY DATE PRINCIPAL AMOUNT ANY, FROM:
------------- ---------------- ----------------
$
$
$
Each such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date".
Payment for the Securities which the undersigned has agreed to purchase on
each Delivery Date shall be made to the Company or its order [by certified or
official bank check in immediately available funds at the office of
, New York, New York, at 10:00 a.m. (New York time) on the Delivery
Date] [state means of payment if the Securities are denominated in a currency or
currencies other than United States Dollars], upon delivery to the undersigned
of the Securities to be purchased by the undersigned on the Delivery Date, in
such denominations and registered in such names as the undersigned may designate
by written or telegraphic communication addressed to the Company not less than
five full business days prior to the Delivery Date. If no such request is
received, the Securities will be registered in the name of the
undersigned and issued in a denomination equal to the aggregate principal amount
of Securities to be purchased by the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
the Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Securities to be made by the undersigned shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above, of such part of the Securities as is to
be sold to them. Promptly after completion of sale and delivery to the
Underwriters, the Company will mail or deliver to the undersigned at its address
set forth below notice to such effect, accompanied by a copy of the opinion of
counsel for the Company delivered to the Underwriters in connection therewith.
The undersigned represents and warrants to you that its investment in the
Securities is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which govern such
investment.
Failure to take delivery of and make payment for securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this contract.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first-served basis.
If this contract is acceptable to the Company, it is requested that the
Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below. This
will become a binding contract, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
2
This contract shall be governed by and construed in accordance with the
laws of the State of NEW YORK.
Yours very truly,
---------------------------------------
(Purchaser)
By
------------------------------------
---------------------------------------
---------------------------------------
(Title)
---------------------------------------
---------------------------------------
(Address)
Accepted:
SONAT INC.
By
---------------------------------
------------------------------------
(Title)
------------------------------------
------------------------------------
(Address)
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)
TELEPHONE NUMBER
NAME (INCLUDING AREA CODE) DEPT.
---- --------------------- -----
3
ANNEX A
Pursuant to Section 5(f) of the Sonat Inc. Underwriting Agreement Standard
Provisions, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP shall furnish an opinion with respect to
the Federal laws of the United States, the laws of the State of New York and the
General Corporation Law of the State of Delaware to the effect that:
(i) The Company was duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power under the General Corporation Law of such State to carry on the
business in which it is now engaged, as described in the Prospectus, and is duly
qualified as a foreign corporation in the States of Alabama, New York, and
Texas.
(ii) Southern Natural Gas Company and Sonat Exploration Company were duly
incorporated and are validly existing as corporations in good standing under the
laws of the State of Delaware with corporate power under the General Corporation
Law of such State to carry on the business in which they are now engaged, as
described in the Prospectus, and the shares of capital stock of each such
corporation owned by the Company are duly and validly issued, fully paid and
nonassessable and, to such counsel's knowledge, are owned by the Company free
and clear of all mortgages, pledges, liens, encumbrances and other security
interests.
(iii) The Purchased Securities and the Indenture conform in all material
respects to the descriptions thereof in the Prospectus under the captions
"Description of Debt Securities" and "Description of Notes".
(iv) The Indenture has been duly authorized, executed and delivered by the
Company, has been duly qualified under the Trust Indenture Act of 1939, as
amended, and, assuming that it has been duly authorized, executed and delivered
by the Trustee, shall constitute a valid and binding agreement of the Company in
accordance with its terms, except as limited by general equitable principles and
by bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights; and the Purchased Securities have been duly
authorized and executed by the Company, and, when authenticated, issued and
delivered in accordance with the provisions of the Indenture and the
Underwriting Agreement, will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture, except as limited by general
equitable principles and by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights.
(v) The Registration Statement has become effective under the Securities
Act and, to such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued under the Securities Act or
proceedings therefor instituted or threatened under the Securities Act by the
Securities and Exchange Commission.
(vi) The Registration Statement and the Prospectus comply as to form in
all material respects with the requirements of the Securities Act, the Trust
Indenture Act of 1939, as amended, and the applicable Rules and Regulations of
the Securities and Exchange Commission thereunder (except for the Statement of
Eligibility of the Trustee on Form T-1, the financial
statements and notes thereto, related schedules and exhibits and other financial
data included in or omitted from the Registration Statement and other matters
referred to in the Prospectus under "Experts", as to which such counsel may
express no opinion).
(vii) No approval, authorization, consent or other order of any public
board or body (other than in connection or in compliance with the provisions of
the Federal securities laws or the securities or Blue Sky laws of any State) is
legally required for the issuance and sale by the Company of the Purchased
Securities.
(viii) The Underwriting Agreement has been duly authorized, executed and
delivered on behalf of the Company.
-ii-
