<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 7, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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EL PASO ENERGY CORPORATION*
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 76-0568816
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
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1001 LOUISIANA STREET, HOUSTON, TEXAS, 77002
(713) 420-2131
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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BRITTON WHITE, JR., ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
1001 LOUISIANA STREET, HOUSTON, TEXAS, 77002
(713) 420-2131
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copy to:
GARY P. COOPERSTEIN, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE NEW YORK PLAZA
NEW YORK, NY 10004
(212) 859-8000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement and the merger
of DeepTech International Inc. with a subsidiary of El Paso Energy Corporation.
---------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE(1)
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<S> <C> <C> <C> <C>
Guarantees of Senior Notes.......... $74,125,000 100% $74,125,000 $21,867
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Guarantees of Subordinated Note..... $15,350,000 100% $15,350,000 $ 4,528
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933.
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* As more fully described in this Registration Statement, on August 1, 1998
El Paso Natural Gas Company ("El Paso") adopted a holding company structure
whereby El Paso and its subsidiaries became direct and indirect subsidiaries of
El Paso Energy Corporation.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED AUGUST 7, 1998
PROSPECTUS
$89,475,000
EL PASO ENERGY CORPORATION
GUARANTEES
---------------------
The Guarantee with respect to each of the $74,125,000 12% Senior Secured
Notes Due 2000 (the "Senior Notes") and the $15,350,000 11% Senior Subordinated
Promissory Note Due 2000 (the "Subordinated Note," and together with the Senior
Notes, the "Securities"), of DeepTech International Inc. ("DeepTech"), to which
this Prospectus relates will be offered (the "Offering") by certain Holders (as
defined under "Issuance of Guarantees to the Holders") of the Senior Notes (the
"Senior Notes Holders") or Subordinated Notes (the "Subordinated Note Holder"),
as the case may be. All of such Holders do not necessarily intend to sell their
Guarantee with respect to the Senior Notes (the "Senior Notes Guarantee") or
their Guarantee with respect to the Subordinated Note (the "Subordinated Note
Guarantee," and together with the Senior Notes Guarantee, the "Guarantees"), but
they may decide to do so in the future. See "Selling Holders." The Senior Note
Guarantee offered by the Senior Notes Holders must be sold in conjunction with
the associated Senior Notes (the "Guaranteed Senior Notes") and in connection
with such sale such Senior Notes must be registered or be exempt from
registration under the Securities Act of 1933, as amended (the "Securities
Act"). The Subordinated Note Guarantee offered by Subordinated Note Holder must
be sold in conjunction with the Subordinated Note (the "Guaranteed Subordinated
Note," and together with the Guaranteed Senior Notes, the "Guaranteed
Securities") and in connection with such sale the Subordinated Note must be
registered or be exempt from registration under the Securities Act. The
Guaranteed Securities offered by the Holders may be sold at prices then
prevailing, in negotiated transactions or in the over-the-counter market, or in
brokerage transactions, or in a combination of such transactions. Neither El
Paso Energy Corporation ("El Paso Energy" or the "Company") nor DeepTech will
receive any proceeds from the sale of the Guarantees offered hereby.
As a result of a holding company reorganization effected on August 1, 1998,
El Paso Natural Gas Company ("El Paso") became a wholly owned subsidiary of El
Paso Energy and El Paso Energy succeeded El Paso as the publicly traded
corporation. In conjunction with the merger of DeepTech with El Paso or El Paso
Energy (the "Merger") pursuant to the Agreement and Plan of Merger dated as of
February 27, 1998, as amended, and the solicitations (collectively, the
"Solicitations") of consents by El Paso and DeepTech pursuant to a consent
solicitation statement (the "Statement") and a Consent Letter (the "Consent
Letter") with respect to the Securities, El Paso agreed that El Paso or El Paso
Energy, as successor to El Paso, would guarantee the Securities and would
register the resales of such Guarantees under the Securities Act, if the Merger
were effected between DeepTech and a subsidiary of El Paso Energy. Based upon
elections made by stockholders of DeepTech, the Merger is being effected as a
merger of a subsidiary of El Paso Energy into DeepTech, and accordingly El Paso
Energy is issuing the Guarantees.
The issuance of the Guarantees is conditioned upon the due execution and
delivery by all parties thereto of a First Supplemental Indenture (the
"Supplemental Indenture") to the Indenture (the "Indenture") between DeepTech
and The Bank of New York, successor in interest to the First Interstate Bank of
Texas, N.A., as trustee (the "Trustee"), with respect to the Senior Notes, and
Amendment No. 1 (the "Subordinated Note Amendment") to the Subordinated Note
with respect to the Subordinated Note, each containing, among other things, the
Proposed Amendments (as defined under "Issuance of Guarantees to Holders" below)
with respect to which consents have previously been obtained by the Company and
DeepTech in the Solicitations and the occurrence of the Effective Time (as
defined under "The Merger and Related Transactions" below). See "Description of
the Guarantee -- Conditions to the Effectiveness of the Guarantees" below.
The Guarantees will be executed after the satisfaction of all of the
conditions to the issuance of the Guarantees. The Subordinated Note Amendment
has been duly executed and delivered by the Subordinated Note Holder. It is
intended that the Supplemental Indenture will be executed on or shortly prior to
the Effective Time, provided that the Proposed Amendments will not become
effective until the Effective Time and the Guarantees will only become effective
upon the Effectiveness Date (as defined under "Description of the
Guarantees -- Conditions to the Effectiveness of the Guarantees").
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
THE DATE OF THIS PROSPECTUS IS AUGUST , 1998.
<PAGE> 3
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY ANY AGENT, UNDERWRITER OR DEALER. NEITHER THE DELIVERY OF THIS PROSPECTUS,
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN
THOSE TO WHICH THIS PROSPECTUS RELATES.
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AVAILABLE INFORMATION
The Company is, and El Paso was, subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, the Company files, and El Paso filed, reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the
Commission, at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of such material also may be obtained
from the Public Reference Section of the Commission, at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission also maintains a
World Wide Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission (at http://www.sec.gov). The Company's common stock is listed on the
NYSE (as was the Common Stock of El Paso), and reports, proxy statements and
other information concerning the Company and El Paso can be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
This Prospectus does not contain all of the information set forth in the
Registration Statement filed with the Commission by the Company, certain parts
of which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to the Registration Statement and the exhibits
thereto for further information. Exhibits to the Registration Statement that are
omitted from this Prospectus may also be obtained at the Commission's World Wide
Web site described above. Statements contained or incorporated by reference
herein concerning the provisions of any agreement or other document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission are
not necessarily complete, and readers are referred to the copy so filed for more
detailed information, each such statement being qualified in its entirety by
such reference.
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
This Prospectus (including the documents incorporated by reference herein)
contains forward-looking statements within the meaning of Section 27A of the
Securities Act, and Section 21E of the Exchange Act. Where any such
forward-looking statement includes a statement of the assumptions or bases
underlying such forward-looking statement, the Company cautions that, while such
assumptions or bases are believed to be reasonable and are made in good faith,
assumed facts or bases almost always vary from the actual results, and the
differences between assumed facts or bases and actual results can be material,
depending upon the circumstances. Where, in any forward-looking statement, the
Company, including its subsidiaries, or its management expresses an expectation
or belief as to future results, such expectation or belief is expressed in good
faith and is believed to have a reasonable basis, but there can be no assurance
that the statement of expectation or belief will result or be achieved or
accomplished. The words "believe," "expect," "estimate," "anticipate" and
similar expressions may identify forward-looking statements.
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Important factors that could cause actual results to differ materially from
those in the forward-looking statements herein include increasing competition
within the Company's industry, the timing and extent of changes in commodity
prices for natural gas, uncertainties associated with acquisitions and joint
ventures, potential environmental liabilities, political and economic risks
associated with current and future operations in foreign countries, conditions
of the equity and other capital markets during the periods covered by the
forward-looking statements, and other risks, uncertainties and factors discussed
more completely in the other filings of the Company and El Paso, as predecessor
of the Company, with the Commission, including the Form 10-K of El Paso.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed with the Commission by the Company
or El Paso pursuant to the Exchange Act are incorporated herein by reference:
1. El Paso's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (the "Form 10-K");
2. El Paso's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1998;
3. The portions of El Paso's definitive Proxy Statement for the Annual
Meeting of Stockholders held on May 12, 1998 that have been incorporated by
reference into the Form 10-K; and
4. El Paso's Current Reports on Form 8-K dated December 26, 1996,
March 17, 1998 and August 3, 1998 and Form 8-K/A dated January 21, 1997 and
January 22, 1997, and the Company's Current Report on Form 8-K dated August
3, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Guarantees offered hereby shall be deemed
to be incorporated by reference in this Prospectus and to be part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained therein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus. The Company will provide without charge to each person, including
any beneficial owner of the Guarantees, to whom a copy of this Prospectus is
delivered, upon written or oral request of such person, a copy of any or all
documents incorporated by reference in this Prospectus (other than exhibits to
such documents unless such exhibits are specifically incorporated by reference
into such documents). Written requests for such copies should be directed to the
Vice President, Investor and Public Relations, El Paso Energy Corporation, 1001
Louisiana Street, Houston, Texas 77002 (telephone (713) 420-2131).
---------------------
3
<PAGE> 5
THE COMPANY
GENERAL
The Company is a Delaware corporation which was incorporated in 1998. As a
result of a holding company reorganization effected on August 1, 1998, the
Company succeeded El Paso, a Delaware corporation formed in 1928, as the
publicly traded corporation, and El Paso and its subsidiaries became direct and
indirect subsidiaries of the Company.
The Company's principal operations include the interstate and intrastate
transportation, gathering and processing of natural gas; the marketing of
natural gas and other commodities; and the development and operation of energy
infrastructure facilities worldwide. The Company owns or has interests in over
28,200 miles of interstate and intrastate pipeline connecting the nation's
principal natural gas supply regions to the four largest consuming regions in
the United States, namely the GulfCoast, California, the Northeast and the
Midwest. The Company's natural gas transmission operations include one of the
nation's largest mainline natural gas transmission systems which is comprised of
five interstate pipeline systems: the El Paso Natural Gas pipeline, the
Tennessee Gas pipeline, Midwestern Gas Transmission pipeline, the East Tennessee
Natural Gas pipeline, and the Mojave Pipeline pipeline. Intrastate transmission
operations are conducted through the Company's interests in Oasis Pipe Line
Company, Channel Industries and Gulf States Gas Pipeline Company.
In addition to its interstate and intrastate transmission services, the
Company provides services including natural gas gathering, products extraction,
dehydration, purification and compression. These operations include
approximately 8,750 miles of gathering systems, 240,000 horsepower of
compression and ownership of or interests in 25 natural gas processing and
treating facilities located in the most prolific and active production areas of
the United States (including the San Juan, Anadarko and Permian Basins and in
East Texas, South Texas, Louisiana and the Gulf of Mexico). The Company's
marketing activities include the marketing and trading of natural gas, natural
gas liquids, power, crude oil and refined products, as well as providing risk
management activities associated with these commodities, and participating in
the development and ownership of domestic power generation facilities.
The Company's international activities are focused on the development and
operation of international energy infrastructure projects and include ownership
interests in (i) three major existing natural gas transmission systems in
Australia, (ii) natural gas transmission systems and power generation facilities
currently in operation or under construction in Argentina, Bolivia, Brazil,
Chile, Czech Republic, Hungary, Indonesia, Mexico, Pakistan and Peru, and (iii)
three operating domestic power generation plants.
The Company's principal executive offices are located at 1001 Louisiana,
Houston, Texas 77002, and its telephone number at that address is (713)
420-2131.
THE MERGER AND RELATED TRANSACTIONS
General
On February 27, 1998, El Paso, El Paso Acquisition Company ("Merger Sub"),
a direct wholly owned subsidiary of El Paso, and DeepTech International Inc.
("DeepTech") entered into an Agreement and Plan of Merger (as amended from time
to time, the "Merger Agreement"), providing for the merger (the "Merger") of
DeepTech with El Paso or a subsidiary of El Paso. The Merger Agreement was
amended on June 16, 1998 to add the Company as a party, and to provide for the
issuance of the Common Stock in lieu of common stock of El Paso and for the
merger of DeepTech with the Company or a subsidiary of the Company, if the
holding company reorganization occurs prior to the Merger. Prior to the Merger,
DeepTech will dispose of substantially all of its assets other than its general
and limited partnership interests in Leviathan Gas Pipeline Partners, L.P.
("Leviathan"), through the contribution of its offshore drilling services
business to its 94%-owned subsidiary, Tatham Offshore, Inc. ("Tatham Offshore"),
and a rights offering (the "Rights Offering") to DeepTech stockholders of the
shares of Tatham Offshore owned by DeepTech and its subsidiaries. As a result,
at the time of the Merger, DeepTech will have no material assets other than its
4
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Leviathan interests and cash. Subject to the terms and conditions of the Merger
Agreement, the Merger is expected to occur on August 14, 1998.
Merger Consideration
As a result of the Merger, based upon the elections which were made by
stockholders of DeepTech, each DeepTech stockholder will receive for each share
of DeepTech Common Stock, par value $0.01 per share (the "DeepTech Common
Stock"), $14.00 in cash, without interest.
As of the Effective Time of the Merger, the Company has agreed to guarantee
the Securities pursuant to the Guarantees.
For further information regarding the Merger and the related transactions
to be undertaken in connection therewith, see the Registration Statement on Form
S-4, which has been filed with the Commission.
THE EL PASO REORGANIZATION
On August 1, 1998, El Paso effected the holding company reorganization
whereby El Paso and its subsidiaries became direct and indirect subsidiaries of
the Company. Pursuant to the holding company reorganization, holders of shares
of the Common Stock, par value $3.00 per share (the "Common Stock"), of El Paso
became holders on a share-for-share basis of shares of the Common Stock with the
result that the Company replaced El Paso as the publicly held corporation, and
all stockholders of El Paso immediately prior to such reorganization now own the
same number of shares of the Common Stock immediately after the reorganization.
The change to a holding company structure was tax free for federal income tax
purposes to stockholders of El Paso and was effected without a vote of
stockholders under applicable Delaware law.
USE OF PROCEEDS
The Guarantees offered hereby, which must be sold in conjunction with the
Securities, are being sold by the Holders named under "Selling Holders." The
Company will not receive any proceeds from the Offering.
RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, -------------------------------------
1998(1) 1997 1996 1995 1994 1993
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividend
Requirements............................... $2.36 $2.26 $1.59 $2.51 $2.87 $3.04
</TABLE>
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(1) Because of the seasonal nature of the Company's business, the ratio for the
three month period may not necessarily be indicative of the ratio that will
result for the full year 1998.
For purposes of calculating these ratios: (i) "fixed charges" represent
interest expense (exclusive of interest on rate refunds), amortization of debt
costs, the portion of rental expense representing the interest factor and
preferred stock dividend requirements of majority-owned subsidiaries; and (ii)
"earnings" represent the aggregate of income from continuing operations before
income taxes, interest expense (exclusive of interest on rate refunds),
amortization of debt costs, the portion of rental expense representing the
interest factor and the actual amount of any preferred stock dividend
requirements of majority-owned subsidiaries.
5
<PAGE> 7
DESCRIPTION OF THE GUARANTEES
GENERAL
The Guarantees will be executed by the Company upon the consummation of the
Merger. Copies of the Guarantees are filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Guarantees are offered in
uncertificated form, subject to the satisfaction or waiver of certain conditions
described below. See "Conditions to the Effectiveness of the Guarantee".
The Guarantees provide that the Company unconditionally guarantees that (i)
the Company will promptly and punctually perform and observe each and every
agreement, covenant and condition on the part of DeepTech to be performed or
observed, which agreement, covenant or condition is contained in the Senior
Notes, as amended by the Supplemental Indenture, or the Subordinated Notes, as
amended by the Subordinated Note Amendment (all of such instruments being herein
collectively called the "Operative Instruments"), (ii) all sums stated in the
Operative Instruments to be payable and all other amounts payable pursuant to
the Operative Instruments, including, without limitation, the principal of, the
interest and any premium on, the Securities, will be promptly paid in full when
due in accordance with the provisions thereof, whether at maturity or as a
prepayment or by acceleration or otherwise, all at the time and place and in the
amount and manner prescribed in, and otherwise in accordance with, the
applicable Operative Instrument, and (iii) the Company will, promptly after
demand, pay to the Holder, the costs and expenses incurred in connection with
enforcing the rights of said Holder against DeepTech following any default in
the due performance or observance of any agreement, covenant or condition on the
part of DeepTech to be performed or observed under any of the Operative
Instruments, including without limitation, the fees and expenses of counsel.
The Guarantees are unconditional and absolute guarantees of payment and not
guarantees of collection, and if for any reason any duty, agreement or
obligation of DeepTech contained in any Operative Instrument is not performed or
observed by DeepTech as provided therein, or if any amount payable under or in
connection with any Operative Instrument is not paid in full when the same
becomes due and payable, the Company undertakes to perform or cause to be
performed promptly each of such duties, agreements and obligations and to pay
forthwith each such amount to the person entitled to receive the same,
regardless of any defense or set-off or counterclaim which DeepTech or any other
person may have or assert and regardless of whether or not the Holder or anyone
on behalf of such Holder shall have instituted any suit, action or proceeding or
exhausted its remedies or taken any steps to enforce any rights against DeepTech
or any other person to compel any such performance or observance or to collect
all or part of any such amount, either pursuant to the provisions of any
Operative Instrument or at law or in equity, and regardless of any other
condition or contingency.
If the Company is required to make any payments on account of the
Securities or otherwise in accordance with any Operative Instrument and pursuant
to the Guarantees, the Company will be subrogated to the rights of the Holder of
the Securities (subject to the prior payment in full in cash of all principal,
interest and premium, if any, due on the Securities and all amounts payable
under the Operative Instruments) to receive payments or distributions of assets
of DeepTech payable or distributable to said Holder until the Company has been
repaid in full. If at any time any payment received by the Holder under any
Operative Instrument is required to be repaid by such Holder, the obligations,
covenants, agreements and duties of the Company under the Guarantees will be
reinstated for not less than one year as if such payment had not been made.
COVENANTS IN THE GUARANTEES
Waiver. The Company unconditionally: (i) waives any requirement that the
Holder, in the event of any default by DeepTech, first make demand upon, or seek
to enforce remedies against, DeepTech or any other person before demanding
payment under or seeking to enforce the Guarantees; (ii) covenants that the
Guarantees will not be discharged except by complete performance of all
obligations contained in every Operative Instrument; (iii) agrees that the
Guarantees will remain in full force and effect without regard to, and will not
be affected or impaired, without limitation, by, any invalidity, irregularity or
unenforceability in
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whole or in part of any Operative Instrument or any limitation on the liability
of DeepTech thereunder, or any limitation on the method or terms of payment
thereunder which may be caused or imposed in any manner whatsoever; and (iv)
waives diligence, presentment and protest with respect to, and any notice of
default in the payment of any amount at any time payable by DeepTech under or in
connection with, any operative Instrument.
No Impairment of Covenants. The obligations, covenants, agreements and
duties of the Company under the Guarantees will not be released, affected or
impaired by any assignment or transfer, in whole or in part, of any Operative
Instrument, although made without notice to or the consent of the Company, or
any waiver by the Holder, or by any other person, of the performance or
observance by DeepTech or the Company of any of the agreements, covenants, terms
or conditions contained in any Operative Instrument, or any indulgence in or the
extension of the time for payment by DeepTech or the Company of any amounts
payable under or in connection with any Operative Instrument or of the time for
performance by DeepTech or the Company of any other obligations under or arising
out of any Operative Instrument or the extension or renewal thereof, or the
modification or amendment (whether material or otherwise) of any duty, agreement
or obligation of DeepTech or the Company set forth in any Operative Instrument,
or the voluntary or involuntary liquidation, administration, sale or other
disposition of all or substantially all of the assets of DeepTech or the
Company, or any receivership, insolvency, bankruptcy, reorganization, or other
similar proceeding, affecting DeepTech or the Company or any assets of DeepTech
or the Company, or the release or discharge of DeepTech or the Company from the
performance or observance of any agreement, covenant, term or condition
contained in any Operative Instrument by operation of law, or the merger or
consolidation of DeepTech or the Company, or any other cause, whether similar or
dissimilar to the foregoing.
Limitation on Sale and Leaseback Transactions. In addition to the foregoing
covenants, the Senior Notes Guarantee contains a covenant which restricts sale
and lease-back transactions. The Senior Notes Guarantee will provide that the
Company will not, nor will it permit any Subsidiary to, create, assume, incur or
suffer to exist any Mortgage (as defined below) upon any Principal Property (as
defined below), whether owned or leased on the date of the Senior Notes
Guarantee or thereafter acquired, to secure any Debt (as defined below), of the
Company or any other Person (other than the Senior Notes), without in any such
case making effective provision whereby all of the Senior Notes outstanding will
be directly secured equally and ratably with such Debt, excluding, however, the
following: (i) any Mortgage upon property owned or leased by any corporation
existing at the time such corporation becomes a Subsidiary; (ii) any Mortgage
upon property existing at the time of acquisition thereof; (iii) any Mortgage to
secure the payment of all or any part of the purchase price of property or to
secure any Debt incurred prior to, at the time of or within 180 days after the
acquisition of such property for the purpose of financing all or any part of the
purchase price thereof; (iv) any Mortgage upon property to secure all or any
part of the cost of construction, alteration, repair or improvement of all or
any part of such property, or Debt incurred prior to, at the time of or within
180 days after the completion of such construction, alteration, repair or
improvement or commencement of full operations on such property for the purpose
of financing all or any part of such cost; (v) any Mortgage securing Debt of a
Subsidiary owing to the Company or to another Subsidiary; (vi) any Mortgage
existing at the date of the Senior Notes Guarantee; and (vii) any extension,
renewal or replacement (or successive extensions, renewals or replacements) in
whole or in part of any Mortgage referred to in the foregoing clauses (i) to
(vi), inclusive; provided, however, that the principal amount of Debt secured
thereby shall not exceed the principal amount of Debt so secured at the time of
such extension, renewal or replacement; and provided, further, that such
Mortgage shall be limited to all or such part of the property which was subject
to the Mortgage so extended, renewed or replaced (plus improvements on such
property).
Notwithstanding the provisions described in the preceding paragraph, the
Company may, and may permit any Subsidiary to, create, assume, incur or suffer
to exist any Mortgage upon any Principal Property which would otherwise be
subject to the restrictions described in the preceding paragraph without equally
and ratably securing the Senior Notes, provided that the aggregate amount of all
Debt then outstanding secured by such Mortgage and all similar Mortgages,
together with all net sale proceeds from Sale-Leaseback Transactions (as defined
below) which are not permitted pursuant to clauses (i) and (ii) of the next
paragraph, does not exceed 10% of the total consolidated stockholders' equity of
the Company as shown on the audited consolidated
7
<PAGE> 9
balance sheet contained or incorporated by reference in the Company's latest
Annual Report on Form 10-K. For the purpose of this paragraph, no Mortgage to
secure any Debt will be deemed to be created by any Mortgage in favor of the
United States of America or any state thereof, or any other country, or any
political subdivision of any of the foregoing, to secure partial, progress,
advance or other payments pursuant to the provisions of any contract or statute,
or any Mortgage securing industrial development, pollution control or similar
revenue bonds.
The Company further agrees that it will not, nor will it permit any
Subsidiary to, sell or transfer any Principal Property with the Company or any
Subsidiary taking back a lease of such Principal Property (a "Sale-Leaseback
Transaction"), unless (i) such Sale-Leaseback Transaction occurs within 180 days
from the date of acquisition of such Principal Property or the date of the
completion of construction or commencement of full operations on such Principal
Property, whichever is later, or (ii) the Company, within 120 days after such
Sale-Leaseback Transaction, applies or causes to be applied to the retirement of
Funded Debt of the Guarantor or any Subsidiary (other than Funded Debt of the
Company which by its terms or the terms of the instrument pursuant to which it
was issued is subordinate in right of payment to the Senior Notes) an amount not
less than the net proceeds of the sale of such Principal Property.
Notwithstanding the provisions described in the preceding paragraph, the
Company may, and may permit any Subsidiary to, effect any Sale-Leaseback
Transaction involving any Principal Property, provided that the net sale
proceeds from such Sale-Leaseback Transaction, together with all Debt secured by
Mortgages which would otherwise be subject to the restrictions described in the
first paragraph under the caption "Limitation on Sale and Leaseback
Transactions" does not exceed 10% of the total consolidated stockholders' equity
of the Company as shown on the audited consolidated balance sheet contained or
incorporated by reference in the Company's latest Annual Report on Form 10-K.
The provisions of this paragraph will also not prevent any Sale-Leaseback
Transaction involving a lease for a period, including renewals, of not more than
36 months.
Certain Definitions
The following definitions are applicable to the covenants relating to
Limitation on Sale and Leaseback Transactions:
"Debt" means indebtedness for money borrowed.
"Funded Debt" means all Debt maturing one year or more from the date of the
creation thereof, all Debt directly or indirectly renewable or extendible, at
the option of the debtor, by its terms or by the terms of any instrument or
agreement relating thereto, to a date one year or more from the date of the
creation thereof, and all Debt under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of one year or
more.
"Mortgage" means and includes any mortgage, pledge, lien, charge, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Principal Property" means (i) any pipeline assets of the Company or any
Subsidiary, including any related facilities employed in the transportation,
distribution or marketing of natural gas, and (ii) any processing or
manufacturing plant owned or leased by the Company or any Subsidiary and located
within the United States of America or any state thereof or the Dominion of
Canada or any province or territory thereof, except any such assets or plant
which in the opinion of the Board of Directors of the Company are not Principal
Properties in relation to the activities of the Company and its Subsidiaries as
a whole.
Reinstatement; Amendment
If at any time any payment received by the Holder under any Operative
Instrument is required to be repaid by such Holder, the obligations, covenants,
agreements and duties of the Company under the Guarantees will be reinstated for
not less than one year as if such payment had not been made.
8
<PAGE> 10
The Guarantees may not be amended or modified except by a writing executed
by the Company with the written consent of the Holder executed thereon. The
obligations of the Company under the Guarantees are continuing obligations and a
fresh cause of action will arise in respect of each default thereunder.
Record Holders of the Senior Notes will receive a copy of the Senior Notes
Guarantee from the Bank of New York, successor in interest to the First
Interstate Bank of Texas, N.A., as Trustee (the "Trustee"), under the Indenture
dated as of March 21, 1994, between DeepTech and the Trustee (the "Indenture").
It will not be necessary for new certificates evidencing the Senior Notes to be
issued.
The Holder of the Subordinated Note will receive a copy of the Subordinated
Note Guarantee from the Company. It will not be necessary to reissue the
Subordinated Note.
CONDITIONS TO THE EFFECTIVENESS OF THE GUARANTEES
The Senior Notes Guarantee or the Subordinated Note Guarantee, as the case
may be, will not become effective unless and until the Effectiveness Date has
occurred. The "Effectiveness Date" is the date that (i) the Supplemental
Indenture or the Subordinated Note Amendment, as the case may be, has been duly
executed and delivered by all parties thereto and (ii) the Effective Time (as
defined in the Merger Agreement) has occurred or is simultaneously occurring.
The conditions to the consummation of the issuance of the Guarantees are
for the sole benefit of the Company, and such conditions may be asserted by the
Company in its sole discretion regardless of the circumstances giving rise to
such conditions or may be waived by the Company, in whole or in part, in its
sole discretion. The Board of Directors of the Company has not made a decision
as to which circumstances would lead it to waive any such condition, and any
such waiver would depend on circumstances prevailing at the time of such waiver.
Any determination by the Company concerning the events described in this
paragraph shall be final and binding upon all persons.
ISSUANCE OF GUARANTEES TO HOLDERS
As a result of a holding company reorganization effected on August 1, 1998,
El Paso became a wholly owned subsidiary of El Paso Energy and El Paso Energy
succeeded El Paso as the publicly traded corporation. In conjunction with the
Merger of DeepTech with El Paso or El Paso Energy pursuant to the Agreement and
Plan of Merger dated as of February 27, 1998, as amended, and the Solicitations
of consents by El Paso and DeepTech pursuant to the Statement and the Consent
Letter with respect to the Securities, El Paso agreed that El Paso or El Paso
Energy, as successor to El Paso, would guarantee the Securities and would
register the resales of such Guarantees under the Securities Act, if the Merger
were effected between DeepTech and a subsidiary of El Paso Energy. Based upon
elections made by stockholders of DeepTech, the Merger is being effected as a
merger of a subsidiary of El Paso Energy into DeepTech, and accordingly El Paso
Energy is issuing the Guarantees. The proposed amendments (the "Proposed
Amendments") to each of the Indenture and Subordinated Note would, among other
things, amend each of the Indenture and the Subordinated Note to change or
eliminate certain existing covenants (including those relating to Change of
Control (as defined in the Indenture)), (i) events of default and other
provisions therein, (ii) eliminate provisions requiring DeepTech to file SEC
reports if DeepTech is not subject to the requirements of Section 13 or 15(d) of
the Exchange Act and (iii) eliminate the requirements for annual compliance
certifications by independent public accountants. In addition to the foregoing
amendments, the Proposed Amendments with respect to the Senior Notes would amend
the Indenture to eliminate the provisions relating to collateral and security
and replace such provisions with provisions in the Indenture or in the Senior
Notes Guarantee limiting the grant of security interests in the assets and
properties of El Paso Energy or its subsidiaries and the sale or transfer of any
such assets and properties with El Paso Energy or any subsidiary taking back a
lease of such assets and properties (the "Negative Pledge and Sale-leaseback
Covenant"). After the Merger, the Securities will have substantially similar
covenants and event of default provisions to the Company's other senior debt
securities.
The Proposed Amendments with respect to the Senior Notes will be embodied
in the Supplemental Indenture to be executed by DeepTech and the Trustee. The
Proposed Amendments with respect to the
9
<PAGE> 11
Subordinated Note are embodied in the Subordinated Note Amendment executed by
the Holder and DeepTech. Upon the Effective Time, the Guarantees will be
executed by the Company. The Proposed Amendments will only become effective upon
the Effective Time and the Guarantees will only become effective upon the
Effectiveness Date.
The Indenture and the Subordinated Note will remain in effect, without
giving effect to the Supplemental Indenture or the Subordinated Note Amendment,
as the case may be, until the Effective Time with respect to the Proposed
Amendments, and until the Effectiveness Date, with respect to the Guarantees.
This Prospectus does not constitute part of the Solicitations, which were
effected by, and fully described in, the Statement, the Consent Letter and the
other documents relating to the Solicitations that have been delivered by El
Paso to the Holders. This Prospectus relates solely to resales by the Holders,
subject to the occurrence of the Effectiveness Date, of the Guarantees.
PLAN OF DISTRIBUTION
The Selling Holders may only sell the Guarantees in conjunction with the
sale of the associated Senior Notes or Subordinated Note, as the case may be
(the "Guaranteed Securities"). The Selling Holders may sell or distribute some
or all of the Guarantees from time to time through dealers or brokers or other
agents or directly to one or more purchasers in privately negotiated
transactions or in the over-the-counter market, or in brokerage transactions, or
in a combination of such transactions. Such transactions may be effected by the
Selling Holders at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices, or at fixed
prices, which may be changed. Brokers, dealers or other agents participating in
such transactions as agent may receive compensation in the form of discounts,
concessions or commissions from Selling Holders (and, if they act as agent for
the purchaser of such shares, from such purchaser). Such discounts, concessions
or commissions as to a particular broker, dealer, or other agent might be in
excess of those customary in the type of transaction involved.
The Selling Holders and any such brokers, dealers or other agents that
participate in such distribution may be deemed to be "underwriters" within the
meaning of the Securities Act, and any discounts, commissions or concessions
received by any such brokers, dealers or other agents might be deemed to be
underwriting discounts and commissions under the Securities Act. Neither the
Company nor the Selling Holders can presently estimate the amount of such
compensation. The Company knows of no existing arrangements between any Selling
Holder and any other Selling Holder, broker, dealer or other agent relating to
the sale or distribution of the shares of Common Stock.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of any of the Guaranteed Securities may not
simultaneously engage in market activities with respect to the Guaranteed
Securities for the applicable period under Regulation M prior to the
commencement of such distribution. In addition and without limiting the
foregoing, the Selling Holders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation Rule 10b-5, which provisions may limit the timing of purchases and
sales of any of the Guaranteed Securities by the Selling Holders. All of the
foregoing may affect the marketability of the Guarantees.
The Company will pay substantially all of the expenses incident to this
offering of the Guarantees by the Selling Holders to the public other than
commissions, concessions and discounts of brokers, dealers or other agents. Each
Selling Holder may indemnify any broker, dealer, or other agent that
participates in transactions involving sales of the Guarantees against certain
liabilities, including liabilities arising under the Securities Act. The Company
may agree to indemnify the Selling Holders and any such statutory "underwriters"
and controlling persons of such "underwriters" against certain liabilities,
including certain liabilities under the Securities Act.
In order to comply with certain states' securities laws, if applicable, the
Guarantees will be sold in such jurisdictions only through registered or
licensed brokers or dealers.
10
<PAGE> 12
The Company has agreed to maintain the effectiveness of this Registration
Statement for a period of one year after the Effective Time of the Merger. No
sales may be made pursuant to this Prospectus after such date unless the Company
amends or supplements this Prospectus to indicate that it has agreed to extend
such period of effectiveness. There can be no assurance that the Selling Holders
will sell all or any of the Guaranteed Securities.
SELLING HOLDERS
The following table sets forth certain information as of August 6, 1998
with respect to the Selling Holders:
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL
AMOUNT OWNED PRIOR
NAME OF SELLING HOLDER TO THE OFFERING PERCENT
---------------------- ------------------- -------
AMOUNT
(IN THOUSANDS)
<S> <C> <C>
Davis High Income Fund(1).................................. $ 500 *
Donaldson, Lufkin & Jenrette Securities
Corporation(1)(3)........................................ 26,110 31.84%
Dreyfus Variable Limited Term High Income Fund(1).......... 450 *
Dreyfus Short Term High Yield(1)........................... 2,800 3.41%
Dreyfus Premier Limited Term High Income(1)................ 4,850 5.91%
Harvard Management Company Inc.(1)......................... 2,000 2.44%
Lehman Brothers Inc.(1).................................... 4,000 4.9%
Sirach Capital Management Inc.(1).......................... 20,750 25.30%
Smith Barney Managed High Income Fund(1)................... 2,315 2.82%
Smith Barney High Income Opportunity Fund(1)............... 3,950 4.82%
Smith Barney High Income Bond Fund(1)...................... 5,400 6.59%
Smith Barney/Travelers High Income Portfolio(1)............ 750 *
Smith Barney USA High Yield Fund(1)........................ 250 *
Dreyfus Short Term High Yield(2)........................... 4,500 29.32%
Dreyfus High Yield Securities(2)........................... 3,000 19.54%
Dreyfus Short Term Income(2)............................... 7,850 51.14%
</TABLE>
- ---------------
* Less than 1%
(1) Represents Holders of the Senior Notes.
(2) Represents Holder of the Subordinated Note.
(3) Donaldson, Lufkin & Jenrette Securities has an investment banking
relationship with El Paso and in the past three years has acted as a
financial advisor to El Paso and as a managing underwriter of various
securities offerings on behalf of El Paso and its affiliates, for which it
received customary fees.
LEGAL OPINIONS
The legality of the Guarantees will be passed upon for the Company by
Fried, Frank, Harris, Shriver & Jacobson (a partnership including professional
corporations).
11
<PAGE> 13
EXPERTS
The consolidated financial statements and the financial statement schedules
of El Paso as of December 31, 1997 and 1996 and for each of the three years in
the period ended December 31, 1997 have been incorporated by reference herein
and in the Registration Statement in reliance on the report of
PricewaterhouseCoopers LLP., independent accountants, given upon the authority
of such firm as experts in accounting and auditing.
12
<PAGE> 14
- ------------------------------------------------------------
- ------------------------------------------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THE PROSPECTUS AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS
PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES.
---------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information.......................
Documents Incorporated by Reference.........
The Company.................................
Use of Proceeds.............................
Description of the Guarantees...............
Issuance of Guarantees to Holders...........
Plan of Distribution........................
Selling Holders.............................
Legal Opinions..............................
Experts.....................................
</TABLE>
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
$89,475,000
EL PASO ENERGY
CORPORATION
GUARANTEES
------------------------
PROSPECTUS
------------------------
August , 1998
- ------------------------------------------------------------
- ------------------------------------------------------------
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are as
follows. All of such expenses will be paid for by the Company.
<TABLE>
<S> <C>
S.E.C. Registration Fee..................................... $28,718
Legal Fees and Expenses..................................... 25,000
Accounting Fees and Expenses................................ 5,000
Printing Fees............................................... 5,000
Miscellaneous............................................... 6,282
-------
$70,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement in connection with specified actions, rules, or
proceedings, whether civil, criminal, administrative, or investigative (other
than action by or in the right of the corporation -- a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement, or otherwise.
Article X of the Company's By-laws require indemnification to the full
extent permitted under Delaware law as from time to time in effect. Subject to
any restrictions imposed by Delaware law, the By-laws of the Company provide an
unconditional right to indemnification for all expense, liability, and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes, or penalties
and amounts paid in settlement) actually and reasonably incurred or suffered by
any person in connection with any actual or threatened proceeding (including, to
the extent permitted by law, any derivative action) by reason of the fact that
such person is or was serving as a director, officer, or employee of the Company
or that, being or having been such a director or officer or an employee of the
Company, such person is or was serving at the request of the Company as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, including an employee benefit plan. The
By-laws of the Company also provide that the Company may, by action of its Board
of Directors, provide indemnification to its agents with the same scope and
effect as the foregoing indemnification of directors and officers.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (i) any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
payment of unlawful dividends or unlawful stock purchases or redemptions, or
(iv) any transaction from which the director derived an improper personal
benefit.
Article 10 of the Company's Certificate of Incorporation, as amended,
provides that to the full extent that the Delaware General Corporation Law, as
it now exists or may hereafter be amended, permits the limitation or elimination
of the liability of directors, a director of the Company shall not be liable to
the Company or its
II-1
<PAGE> 16
stockholders for monetary damages for breach of fiduciary duty as a director.
Any amendment to or repeal of such Article 10 shall not adversely affect any
right or protection of a director of the Company for or with respect to any acts
or omissions of such director occurring prior to such amendment or repeal.
The Company maintains directors' and officers' liability insurance which
provides for payment, on behalf of the directors and officers of the Company and
its subsidiaries, of certain losses of such persons (other than matters
uninsurable under law) arising from claims, including claims arising under the
Securities Act, for acts or omissions by such persons while acting as directors
or officers of the Company and/or its subsidiaries, as the case may be.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
2.1. -- Agreement and Plan of Merger (the "Merger Agreement"),
dated as of February 27, 1998, among El Paso Natural Gas
Company, El Paso Acquisition Company and DeepTech
International Inc.*
2.2. -- Amendment No. 1 to the Merger Agreement, dated as of June
16, 1998, by and among the Company, El Paso Natural Gas
Company, El Paso Acquisition Company, and DeepTech
International Inc.*
4.1. -- Form of Guarantee re: Senior Notes
4.2. -- Form of Guarantee re: Subordinated Note
5.1. -- Opinion of Fried, Frank, Harris, Shriver & Jacobson re:
legality
12.1. -- Statement regarding the computation of the ratio of
earnings to fixed charges
23.1. -- Consent of PricewaterhouseCoopers LLP, independent public
accountants of the Company
23.2. -- Consent of Fried, Frank, Harris, Shriver & Jacobson
(included in Exhibit 5.1 to this Registration Statement)
</TABLE>
- ---------------
* Previously filed with the Company's registration statement on Form S-4,
registration no. 333-49863
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs A(1)(a) and A(1)(b) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
II-2
<PAGE> 17
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registration hereby undertakes that, for purposes of
determining any liability under the Securities Act, such filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on August 7, 1998.
EL PASO ENERGY CORPORATION
By: /s/ WILLIAM A. WISE
----------------------------------
William A. Wise
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the persons whose signatures
appear below, constitute and appoint H. Brent Austin and Britton White, Jr. and
each of them as their true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for them and in their names, places,
steads, in any and all capacities, to sign this Registration Statement to be
filed with the Securities and Exchange Commission and any and all amendments
(including post-effective amendments) to this Registration Statement, and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as they might or could do in person, thereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates as indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ WILLIAM A. WISE Chairman of the Board, President, August 7, 1998
- ----------------------------------------------------- Chief Executive Officer and
William A. Wise Director
/s/ H. BRENT AUSTIN Executive Vice President and Chief August 7, 1998
- ----------------------------------------------------- Financial Officer (Principal
H. Brent Austin Financial Officer)
/s/ JEFFREY I. BEASON Vice President and Controller August 7, 1998
- ----------------------------------------------------- (Chief Accounting Officer)
Jeffrey I. Beason
/s/ BYRON ALLUMBAUGH Director August 7, 1998
- -----------------------------------------------------
Byron Allumbaugh
/s/ JUAN CARLOS BRANIFF Director August 7, 1998
- -----------------------------------------------------
Juan Carlos Braniff
</TABLE>
II-4
<PAGE> 19
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ PETER T. FLAWN Director August 7, 1998
- -----------------------------------------------------
Peter T. Flawn
/s/ JAMES F. GIBBONS Director August 7, 1998
- -----------------------------------------------------
James F. Gibbons
/s/ BEN F. LOVE Director August 7, 1998
- -----------------------------------------------------
Ben F. Love
/s/ KENNETH L. SMALLEY Director August 7, 1998
- -----------------------------------------------------
Kenneth L. Smalley
/s/ MALCOLM WALLOP Director August 7, 1998
- -----------------------------------------------------
Malcolm Wallop
</TABLE>
II-5
<PAGE> 20
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S>
2.1. -- Agreement and Plan of Merger (the "Merger Agreement"),
dated as of February 27, 1998, among El Paso Natural Gas
Company, El Paso Acquisition Company and DeepTech
International Inc.*
2.2. -- Amendment No. 1 to the Merger Agreement, dated as of June
16, 1998, by and among the Company, El Paso Natural Gas
Company, El Paso Acquisition Company, and DeepTech
International Inc.*
4.1. -- Form of Guarantee re: Senior Notes
4.2. -- Form of Guarantee re: Subordinated Note
5.1. -- Opinion of Fried, Frank, Harris, Shriver & Jacobson re:
legality
12.1. -- Statement regarding the computation of the ratio of
earnings to fixed charges
23.1. -- Consent of PricewaterhouseCoopers LLP, independent public
accountants of the Company
23.2. -- Consent of Fried, Frank, Harris, Shriver & Jacobson
(included in Exhibit 5.1 to this Registration Statement)
</TABLE>
- ---------------
* Previously filed with the Company's registration statement on Form S-4,
registration no. 333-49863
<PAGE> 1
EXHIBIT 4.1
GUARANTY
GUARANTY made by EL PASO ENERGY CORPORATION, a Delaware corporation
(herein, together with its successors and assigns, called the "Guarantor").
WITNESSETH:
WHEREAS, DeepTech International Inc., a Delaware corporation ("DeepTech")
has issued 12% Senior Secured Securities due December 15, 2000 (the
"Securities"), in the principal amount of $82,000,000 issued pursuant to the
Indenture dated as of March 21, 1994 between DeepTech and the Bank of New York
(the "Trustee"), successor in interest to the First Interstate Bank of Texas,
N.A. and the related loan and security documents (collectively, the
"Indenture").
WHEREAS, DeepTech, Guarantor, El Paso Natural Gas Company, a Delaware
corporation and El Paso Acquisition Company, a Delaware corporation ("Merger
Sub") have entered into that certain Agreement and Plan of Merger, dated
February 27, 1998, (the "Merger Agreement"), as amended by Amendment No. 1,
dated June 16, 1998 (as amended, "Amended Merger Agreement") pursuant to which
DeepTech will merge with Merger Sub (the "Merger").
WHEREAS, the consummation of the Merger is conditioned upon, among other
things, the holders of the Securities (each, a "Holder") having consented to
certain amendments to the Indenture.
WHEREAS, the surviving corporation of the Merger (the "Company") and the
Trustee are entering into that certain Supplemental Indenture (the "Supplemental
Indenture") dated August , 1998 to amend the Indenture.
WHEREAS, the Guarantor will derive direct and indirect benefit from the
consummation of the transactions contemplated by the Merger Agreement.
NOW THEREFORE, to induce the Holders to enter into the First Supplemental
Indenture, Guarantor hereby agrees with and for the benefit of each Holder
(which term, together with all other terms used in this Guaranty without
definition, shall have the same respective meanings given thereto in the
Indenture, as amended by the Supplemental Indenture) as follows:
1. The Guarantor hereby unconditionally guarantees to each Holder that: (i)
the Company will promptly and punctually perform and observe each and every
agreement, covenant and condition on the part of the Company to be performed or
observed, which agreement, covenant or condition is contained in the Indenture,
the First Supplemental Indenture or in the Securities (all of said instruments
being herein collectively called the "Operative Instruments"), (ii) all sums
stated in the Operative Instruments to be payable and all other amounts payable
pursuant to the Operative Instruments, including, without limitation, the
principal of, the interest and any premium on, the Securities, will be promptly
paid in full when due in accordance with the provisions thereof, whether at
maturity or as a prepayment or by acceleration or otherwise, all at the time and
place and in the amount and manner prescribed in, and otherwise in accordance
with, the applicable Operative Instrument, and (iii) the Guarantor will,
promptly after demand, pay to each Holder, the costs and expenses incurred in
connection with enforcing the rights of said Holder against the Guarantor
following any default in the due performance or observance of any agreement,
covenant or condition on the part of the Company to be performed or observed
under any of the Operative Instruments, including without limitation, the fees
and expenses of counsel.
2. The Guarantor hereby unconditionally guarantees to each Holder that:
(a) The Company will not, nor will it permit any Subsidiary to,
create, assume, incur or suffer to exist any Mortgage (as defined in
subsection (c) below) upon any Principal Property (as defined in subsection
(c) below), whether owned or leased on the date hereof or hereafter
acquired, to secure any Debt (as defined in subsection (c) below), of the
Guarantor or any other Person (other than the
<PAGE> 2
Securities), without in any such case making effective provision whereby
all of the Securities outstanding shall be directly secured equally and
ratably with such Debt, excluding, however, the following:
(i) any Mortgage upon property owned or leased by any corporation
existing at the time such corporation becomes a Subsidiary;
(ii) any Mortgage upon property existing at the time of acquisition
thereof;
(iii) any Mortgage to secure the payment of all or any part of the
purchase price of property or to secure any Debt incurred prior to, at
the time of or within 180 days after the acquisition of such property
for the purpose of financing all or any part of the purchase price
thereof;
(iv) any Mortgage upon property to secure all or any part of the
cost of construction, alteration, repair or improvement of all or any
part of such property, or Debt incurred prior to, at the time of or
within 180 days after the completion of such construction, alteration,
repair or improvement or commencement of full operations on such
property for the purpose of financing all or any part of such cost;
(v) any Mortgage securing Debt of a Subsidiary owing to the
Guarantor or to another Subsidiary;
(vi) any Mortgage existing at the date hereof; and
(vii) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any
Mortgage referred to in the foregoing clauses (i) to (vi), inclusive;
provided, however, that the principal amount of Debt secured thereby
shall not exceed the principal amount of Debt so secured at the time of
such extension, renewal or replacement; and provided, further, that such
Mortgage shall be limited to all or such part of the property which was
subject to the Mortgage so extended, renewed or replaced (plus
improvements on such property).
Notwithstanding the foregoing provisions of this subsection (a),
the Guarantor may, and may permit any Subsidiary to, create, assume,
incur or suffer to exist any Mortgage upon any Principal Property which
is not excepted by clauses (i) through (vii) above without equally and
ratably securing the Securities, provided that the aggregate amount of
all Debt then outstanding secured by such Mortgage and all similar
Mortgages, together with all net sale proceeds from Sale-Leaseback
Transactions (as defined in subsection (b) of this Section 2) which are
not permitted pursuant to clauses (i) and (ii) of subsection (b) of this
Section 2, does not exceed 10% of the total consolidated stockholders'
equity of the Guarantor as shown on the audited consolidated balance
sheet contained or incorporated by reference in the Guarantor's latest
Annual Report on Form 10-K. For the purpose of this subsection (a), no
Mortgage to secure any Debt will be deemed to be created by any Mortgage
in favor of the United States of America or any state thereof, or any
other country, or any political subdivision of any of the foregoing, to
secure partial, progress, advance or other payments pursuant to the
provisions of any contract or statute, or any Mortgage securing
industrial development, pollution control or similar revenue bonds.
(b) The Guarantor will not, nor will it permit any Subsidiary to, sell
or transfer any Principal Property with the Guarantor or any Subsidiary
taking back a lease of such Principal Property (a "Sale-Leaseback
Transaction"), unless (i) such Sale-Leaseback Transaction occurs within 180
days from the date of acquisition of such Principal Property or the date of
the completion of construction or commencement of full operations on such
Principal Property, whichever is later, or (ii) the Guarantor, within 120
days after such Sale-Leaseback Transaction, applies or causes to be applied
to the retirement of Funded Debt of the Guarantor or any Subsidiary (other
than Funded Debt of the Guarantor which by its terms or the terms of the
instrument pursuant to which it was issued is subordinate in right of
payment to the Securities) an amount not less than the net proceeds of the
sale of such Principal Property.
Notwithstanding the foregoing provisions of this subsection (b), the
Guarantor may, and may permit any Subsidiary to, effect any Sale-Leaseback
Transaction involving any Principal Property, provided that
2
<PAGE> 3
the net sale proceeds from such Sale-Leaseback Transaction, together with
all Debt secured by Mortgages not specifically excluded pursuant to clauses
(i) through (vii) of subsection (a) of this Section 2 from the operation of
such subsection (a), does not exceed 10% of the total consolidated
stockholders' equity of the Guarantor as shown on the audited consolidated
balance sheet contained or incorporated by reference in the Guarantor's
latest Annual Report on Form 10-K. The provisions of this subsection (b)
shall also not prevent any Sale-Leaseback Transaction involving a lease for
a period, including renewals, of not more than 36 months.
(c) For purposes of this Section 2:
(i) "Debt" means indebtedness for money borrowed.
(ii) "Funded Debt" means all Debt maturing one year or more from
the date of the creation thereof, all Debt directly or indirectly
renewable or extendible, at the option of the debtor, by its terms or by
the terms of any instrument or agreement relating thereto, to a date one
year or more from the date of the creation thereof, and all Debt under a
revolving credit or similar agreement obligating the lender or lenders
to extend credit over a period of one year or more.
(iii) "Mortgage" means and includes any mortgage, pledge, lien,
charge, security interest, conditional sale or other title retention
agreement or other similar encumbrance.
(iv) "Principal Property" means (i) any pipeline assets of the
Guarantor or any Subsidiary, including any related facilities employed
in the transportation, distribution or marketing of natural gas, and
(ii) any processing or manufacturing plant owned or leased by the
Guarantor or any Subsidiary and located within the United States of
America or any state thereof or the Dominion of Canada or any province
or territory thereof, except any such assets or plant which in the
opinion of the Board of Directors of the Guarantor are not Principal
Properties in relation to the activities of the Guarantor and its
Subsidiaries as a whole.
3. This is an unconditional and absolute guaranty of payment and not a
guaranty of collection, and if for any reason any duty, agreement or obligation
of the Company contained in any Operative Instrument shall not be performed or
observed by the Company as provided therein, or if any amount payable under or
in connection with any Operative Instrument shall not be paid in full when the
same becomes due and payable, the Guarantor undertakes to perform or cause to be
performed promptly each of such duties, agreements and obligations and to pay
forthwith each such amount to the person entitled to receive the same,
regardless of any defense or set-off or counterclaim which the Company or any
other person may have or assert and regardless of whether or not any Holder or
anyone on behalf of such Holder shall have instituted any suit, action or
proceeding or exhausted its remedies or taken any steps to enforce any rights
against the Company or any other person to compel any such performance or
observance or to collect all or part of any such amount, either pursuant to the
provisions of any Operative Instrument or at law or in equity, and regardless of
any other condition or contingency.
4. The Guarantor hereby unconditionally: (i) waives any requirement that
any Holder, in the event of any default by the Company, first make demand upon,
or seek to enforce remedies against, the Company or any other person before
demanding payment under or seeking to enforce this Guaranty; (ii) covenants that
this Guaranty will not be discharged except by complete performance of all
obligations contained in every Operative Instrument; (iii) agrees that this
Guaranty shall remain in full force and effect without regard to, and shall not
be affected or impaired, without limitation, by, any invalidity, irregularity or
unenforceability in whole or in part of any Operative Instrument or any
limitation on the liability of the Company thereunder, or any limitation on the
method or terms of payment thereunder which may now or hereafter be caused or
imposed in any manner whatsoever; and (iv) waives diligence, presentment and
protest with respect to, and any notice of default in the payment of any amount
at any time payable by the Company under or in connection with, any operative
Instrument.
5. The obligations, covenants, agreements and duties of the Guarantor under
this Guaranty shall not be released, affected or impaired by any assignment or
transfer, in whole or in part, of any Operative Instrument, although made
without notice to or the consent of the Guarantor, or any waiver by any Holder,
or by any other person, of the performance or observance by the Company or the
Guarantor of any of the agreements,
3
<PAGE> 4
covenants, terms or conditions contained in any Operative Instrument, or any
indulgence in or the extension of the time for payment by the Company or the
Guarantor of any amounts payable under or in connection with any Operative
Instrument or of the time for performance by the Company or the Guarantor of any
other obligations under or arising out of any Operative Instrument or the
extension or renewal thereof, or the modification or amendment (whether material
or otherwise) of any duty, agreement or obligation of the Company or the
Guarantor set forth in any Operative Instrument, or the voluntary or involuntary
liquidation, administration, sale or other disposition of all or substantially
all of the assets of the Company or the Guarantor, or any receivership,
insolvency, bankruptcy, reorganization, or other similar proceeding, affecting
the Company or the Guarantor or any assets of the Company or the Guarantor, or
the release of any property from any security for any Security, or the
impairment of any such property or security, or the release or discharge of the
Company or the Guarantor from the performance or observance of any agreement,
covenant, term or condition contained in any Operative Instrument by operation
of law, or the merger or consolidation of the Company or the Guarantor, or any
other cause, whether similar or dissimilar to the foregoing.
6. If the Guarantor shall be required to make any payments on account of
any Security or otherwise in accordance with any Operative Instrument and
pursuant to this Guaranty, the Guarantor shall be subrogated to the rights of
the Holder of such Security (subject to the prior payment in full in cash of all
principal, interest and premium, if any, due on all the Securities and all
amounts payable under the Operative Instruments) to receive payments or
distributions of assets of the Company payable or distributable to said Holder
until the Guarantor shall have been repaid in full.
7. If at any time any payment received by any Holder under any Operative
Instrument is required to be repaid by such Holder, the obligations, covenants,
agreements and duties of the Guarantor under this Guaranty shall be reinstated
for not less than one year as if such payment had not been made.
8. This Guaranty may not be amended or modified except by a writing
executed by the Guarantor with the written consent of all of the Holders
executed thereon. The obligations of the Guarantor under this Guaranty are
continuing obligations and a fresh cause of action shall arise in respect of
each default hereunder.
9. This Guaranty shall for all purposes be construed in accordance with and
governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
on its behalf by its officer thereunto duly authorized, this day of
, 1998.
EL PASO ENERGY CORPORATION
By:
------------------------------------
Name:
Title:
Address for Notices for the
Guarantor:
1001 Louisiana
Houston, Texas 77002
Attention: William A. Wise
Facsimile No.: (713) 757-6030
and
Attention Britton White, Jr.
Facsimile No.: (713) 757-1872
4
<PAGE> 1
EXHIBIT 4.2
GUARANTY
GUARANTY made by EL PASO ENERGY CORPORATION, a Delaware corporation
(herein, together with its successors and assigns, called the "Guarantor").
WITNESSETH:
WHEREAS, DeepTech International Inc., a Delaware corporation ("DeepTech")
has issued 11% Senior Subordinated Promissory Note due May 31, 2000 (the
"Note"), in the principal amount of $15,350,000, dated January 23, 1997,
originally payable to Hare & Co. and reissued as payable to Bost & Co. or any
subsequent holder (collectively, the "Holder").
WHEREAS, DeepTech, Guarantor, El Paso Natural Gas Company, a Delaware
corporation, and El Paso Acquisition Company, a Delaware corporation ("Merger
Sub") have entered into that certain Agreement and Plan of Merger, dated
February 27, 1998 (the "Merger Agreement"), as amended by Amendment No. 1 dated
June 16, 1998 (as amended, the "Amended Merger Agreement"), pursuant to which
DeepTech will merge with Merger Sub (the "Merger").
WHEREAS, the consummation of the Merger is conditioned upon, among other
things, the Holder having consented to certain amendments to the Note.
WHEREAS, the surviving corporation of the Merger (the "Company") and the
Trustee are entering into that Amendment No. 1 to the Note ("Amendment No. 1")
dated June 18, 1998, to amend the Note.
WHEREAS, the Guarantor will derive direct and indirect benefit from the
consummation of the transactions contemplated by the Merger Agreement.
NOW THEREFORE, to induce the Holder to enter into Amendment No. 1,
Guarantor hereby agrees with and for the benefit of the Holder (which term,
together with all other terms used in this Guaranty without definition, shall
have the same respective meanings given thereto in the Note) as follows:
1. The Guarantor hereby unconditionally guarantees to the Holder that:
(i) the Company will promptly and punctually perform and observe each and
every agreement, covenant and condition on the part of the Company to be
performed or observed, which agreement, covenant or condition is contained
in the Note or Amendment No. 1 (all of said instruments being herein
collectively called the "Operative Instruments"), (ii) all sums stated in
the Operative Instruments to be payable and all other amounts payable
pursuant to the Operative Instruments, including, without limitation, the
principal of, the interest and any premium on, the Note, will be promptly
paid in full when due in accordance with the provisions thereof, whether at
maturity or as a prepayment or by acceleration or otherwise, all at the
time and place and in the amount and manner prescribed in, and otherwise in
accordance with, the applicable Operative Instrument, and (iii) the
Guarantor will, promptly after demand, pay to the Holder, the costs and
expenses incurred in connection with enforcing the rights of said Holder
against the Guarantor following any default in the due performance or
observance of any agreement, covenant or condition on the part of the
Company to be performed or observed under any of the Operative Instruments,
including without limitation, the fees and expenses of counsel.
2. This is an unconditional and absolute guaranty of payment and not a
guaranty of collection, and if for any reason any duty, agreement or
obligation of the Company contained in any Operative Instrument shall not
be performed or observed by the Company as provided therein, or if any
amount payable under or in connection with any Operative Instrument shall
not be paid in full when the same becomes due and payable, the Guarantor
undertakes to perform or cause to be performed promptly each of such
duties, agreements and obligations and to pay forthwith each such amount to
the person entitled to receive the same, regardless of any defense or
set-off or counterclaim which the Company or any other person may have or
assert and regardless of whether or not the Holder or anyone on behalf of
such Holder shall have instituted any suit, action or proceeding or
exhausted its remedies or taken any steps to enforce any rights
<PAGE> 2
against the Company or any other person to compel any such performance or
observance or to collect all or part of any such amount, either pursuant to
the provisions of any Operative Instrument or at law or in equity, and
regardless of any other condition or contingency.
3. The Guarantor hereby unconditionally: (i) waives any requirement
that the Holder, in the event of any default by the Company, first make
demand upon, or seek to enforce remedies against, the Company or any other
person before demanding payment under or seeking to enforce this Guaranty;
(ii) covenants that this Guaranty will not be discharged except by complete
performance of all obligations contained in every Operative Instrument;
(iii) agrees that this Guaranty shall remain in full force and effect
without regard to, and shall not be affected or impaired, without
limitation, by, any invalidity, irregularity or unenforceability in whole
or in part of any Operative Instrument or any limitation on the liability
of the Company thereunder, or any limitation on the method or terms of
payment thereunder which may now or hereafter be caused or imposed in any
manner whatsoever; and (iv) waives diligence, presentment and protest with
respect to, and any notice of default in the payment of any amount at any
time payable by the Company under or in connection with, any operative
Instrument.
4. The obligations, covenants, agreements and duties of the Guarantor
under this Guaranty shall not be released, affected or impaired by any
assignment or transfer, in whole or in part, of any Operative Instrument,
although made without notice to or the consent of the Guarantor, or any
waiver by the Holder, or by any other person, of the performance or
observance by the Company or the Guarantor of any of the agreements,
covenants, terms or conditions contained in any Operative Instrument, or
any indulgence in or the extension of the time for payment by the Company
or the Guarantor of any amounts payable under or in connection with any
Operative Instrument or of the time for performance by the Company or the
Guarantor of any other obligations under or arising out of any Operative
Instrument or the extension or renewal thereof, or the modification or
amendment (whether material or otherwise) of any duty, agreement or
obligation of the Company or the Guarantor set forth in any Operative
Instrument, or the voluntary or involuntary liquidation, administration,
sale or other disposition of all or substantially all of the assets of the
Company or the Guarantor, or any receivership, insolvency, bankruptcy,
reorganization, or other similar proceeding, affecting the Company or the
Guarantor or any assets of the Company or the Guarantor, or the release or
discharge of the Company or the Guarantor from the performance or
observance of any agreement, covenant, term or condition contained in any
Operative Instrument by operation of law, or the merger or consolidation of
the Company or the Guarantor, or any other cause, whether similar or
dissimilar to the foregoing.
5. If the Guarantor shall be required to make any payments on account
of the Note or otherwise in accordance with any Operative Instrument and
pursuant to this Guaranty, the Guarantor shall be subrogated to the rights
of the Holder of the Note (subject to the prior payment in full in cash of
all principal, interest and premium, if any, due on the Note and all
amounts payable under the Operative Instruments) to receive payments or
distributions of assets of the Company payable or distributable to said
Holder until the Guarantor shall have been repaid in full.
6. If at any time any payment received by the Holder under any
Operative Instrument is required to be repaid by such Holder, the
obligations, covenants, agreements and duties of the Guarantor under this
Guaranty shall be reinstated for not less than one year as if such payment
had not been made.
7. This Guaranty may not be amended or modified except by a writing
executed by the Guarantor with the written consent of the Holder executed
thereon. The obligations of the Guarantor under this Guaranty are
continuing obligations and a fresh cause of action shall arise in respect
of each default hereunder.
8. This Guaranty shall for all purposes be construed in accordance
with and governed by the laws of the State of New York.
2
<PAGE> 3
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
on its behalf by its officer thereunto duly authorized, this day of
, 1998.
EL PASO ENERGY CORPORATION
By:
------------------------------------
Name:
Title:
Address for Notices for the
Guarantor:
1001 Louisiana
Houston, Texas 77002
Attention: William A. Wise
Facsimile No.: (713) 757-6030
and
Attention Britton White, Jr.
Facsimile No.: (713) 757-1872
3
<PAGE> 1
EXHIBIT 5.1
FORM OF OPINION OF
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
212-859-8296
August , 1998 (FAX: 212-859-8585)
El Paso Energy Corporation
1001 Louisiana Street
Houston, Texas 77002
Ladies and Gentlemen:
We are acting as special counsel to El Paso Energy Corporation, a Delaware
corporation ("El Paso Energy" or the "Guarantor"), in connection with the
Registration Statement on Form S-3, as amended (the "Registration Statement"),
under the Securities Act of 1933, as amended (the "Securities Act"), to register
the resale of the guarantees (the "Guarantees") that may be offered for sale by
the holders (each, a "Selling Holder") of the 12% Senior Secured Notes Due 2000
(the "Senior Notes") and the 11% Senior Subordinated Promissory Note Due 2000
(the "Subordinated Note," and together with the Senior Notes, the "Securities")
of DeepTech International Inc. ("DeepTech"). As a result of a holding company
reorganization effected August 1, 1998, El Paso Natural Gas Company ("EPNG")
became a wholly owned subsidiary of El Paso Energy and El Paso Energy succeeded
EPNG as the publicly traded corporation. In conjunction with the merger of
DeepTech with EPNG or El Paso Energy (the "Merger") pursuant to the Agreement
and Plan of Merger dated as of February 27, 1998, as amended, and the
solicitations of consents by EPNG and DeepTech pursuant to a consent
solicitation statement (the "Consent Solicitation Statement") with respect to
the Securities, EPNG agreed that EPNG or El Paso Energy, as successor to EPNG,
would guarantee the Notes and would register the resales of such Guarantees
under the Securities Act of 1933, as amended, if the Merger were effected
between DeepTech and a subsidiary of El Paso Energy. Based upon elections made
by stockholders of DeepTech, the Merger is being effected as a merger of a
subsidiary of El Paso Energy into DeepTech, and accordingly El Paso Energy is
issuing the Guarantees. With your permission, all assumptions and statements of
reliance herein have been made without any independent investigation or
verification on our part except to the extent otherwise expressly stated, and we
express no opinion with respect to the subject matter or accuracy of such
assumptions or items relied upon.
In connection with this opinion, we have (i) investigated such questions of
law, (ii) examined originals, or certified, conformed or reproduction copies of
such agreements, instruments, documents and records of El Paso Energy, such
certificates of public officials and such other documents, and (iii) received
such information from officers and representatives of El Paso Energy as we have
deemed necessary or appropriate for the purposes of this opinion.
In all such examinations, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of original and
certified documents and the conformity to original or certified documents of all
copies submitted to us as conformed or reproduction copies. As to various
questions of fact relevant to the opinion expressed herein, we have relied upon,
and assume the accuracy of, representations and warranties contained in the
documents relevant hereto and certificates and oral or written statements and
other information of or from representatives of El Paso Energy and others and
assume compliance on the part of all parties to such documents with their
covenants and agreements contained therein.
We also have assumed, with respect to all parties to the documents relevant
hereto other than El Paso Energy, that such parties have the power and authority
to enter into and perform such documents and to consummate the transactions
contemplated thereby, that such documents have been duly authorized, executed
and delivered by such parties and constitute legal, valid and binding
obligations of such parties enforceable against such parties in accordance with
the terms, and that such parties will comply with all of their obligations under
such documents and all laws applicable thereto. As to various questions of fact
relevant
<PAGE> 2
to such opinions, we have relied upon, and have assumed the accuracy of,
certificates and oral or written statements and other information of or from
public officials, officers or representatives of El Paso Energy, and others.
Based upon the foregoing, it is our opinion that the Guarantees have been
duly authorized and executed by El Paso Energy and constitute legal, valid and
binding obligations of El Paso Energy.
Our opinion given above is subject to: (i) bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect affecting
creditors' rights generally; (ii) general principles of equity (including,
without limitation, standards of materiality, good faith, fair dealing and
reasonableness) whether such principles are considered in a proceeding in equity
or at law; (iii) the application of any applicable fraudulent conveyance,
fraudulent transfer, fraudulent obligation, or preferential transfer law or any
law governing the distribution of assets of any person; and (iv) provisions in
the Guarantees or the Indenture which relates to the Senior Notes (the
"Indenture") or the Subordinated Note that provide that El Paso Energy's
liability thereunder shall not be affected by actions or failures to act on the
part of the holders of the Securities or the trustee of the Indenture or by
amendments or waivers of provisions of documents governing the guaranteed
obligations might not be enforceable under circumstances and in the event of
actions that change the essential nature of the terms and conditions of the
guaranteed obligations.
We express no opinion as to the enforceability of any provisions of the
Guarantees containing any purported waiver, release, variation, disclaimer,
consent or other agreement to similar effect (all of the foregoing,
collectively, a "Waiver") in the Guarantees insofar as it relates to causes or
circumstances that would operate as a discharge or release of, or defense
available to El Paso Energy thereunder as a matter of law (including judicial
decisions), except to the extent such Waiver is effective under and is not
prohibited by or void or invalid under applicable law (including judicial
decisions).
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Experts" in the Prospectus forming a part of the Registration Statement as
having passed upon the legality, validity and binding effect of the Guarantees.
In giving this consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
Fried, Frank, Harris, Shriver &
Jacobson
By:
----------------------------------
Warren de Wied
2
<PAGE> 1
EXHIBIT 12.1
EL PASO ENERGY CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
FOR THE
QUARTER
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
--------- -------------------------------------
1998 1997 1996 1995 1994 1993
--------- ----- ----- ----- ----- -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Earnings
Income from continuing operations........... $ 58 $ 186 $ 38 $ 85 $ 90 $ 92
Income taxes................................ 35 129 25 48 58 59
Minority interest........................... 6 25 2 0 0 0
----- ----- ----- ----- ----- -----
Income from continuing operations before
income taxes and minority interest....... 99 340 65 133 148 151
Interest and debt expense................... 60 218 100 85 76 71
Interest component of rentals............... 2 7 5 3 3 3
----- ----- ----- ----- ----- -----
Total earnings available for fixed
charges........................... $ 161 $ 565 $ 170 $ 221 $ 227 $ 225
===== ===== ===== ===== ===== =====
Fixed charges(a)
Interest and debt expense................... 60 218 100 85 76 71
Interest components of rentals.............. 2 7 5 3 3 3
----- ----- ----- ----- ----- -----
Fixed charges excluding preferred stock
dividend requirement..................... 62 225 105 88 79 74
Preferred stock dividend requirements....... 6 25 2 0 0 0
----- ----- ----- ----- ----- -----
Total fixed charges................. $ 68 $ 250 $ 107 $ 88 $ 79 $ 74
===== ===== ===== ===== ===== =====
Ratio of Earnings to Fixed Charges(a)......... 2.36 2.26 1.59 2.51 2.87 3.04
</TABLE>
- ---------------
(a) The ratio of earnings to combined fixed charges and preferred and preference
stock dividend requirements for the periods presented would be the same as
the ratio of earning to fixed charges since EPG has no outstanding preferred
stock or preference stock and, therefore, no dividend requirements.
For purposes of calculating these ratios: (i) "fixed charges" represent
interest expense (exclusive of interest on rate refunds), amortization of debt
costs, the estimated portion of rental expense representing the interest factor,
and preferred stock dividend requirements of majority-owned subsidiaries; and
(ii) "earnings" represent the aggregate of income from continuing operations
before income taxes, interest expense (exclusive of interest on rate refunds),
amortization of debt costs, the portion of rental expense representing the
interest factor, and the actual amount of any preferred stock dividend
requirements of majority owned subsidiaries.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
of El Paso Energy Corporation on Form S-3 of our report dated March 12, 1998, on
our audits of the consolidated financial statements and financial statement
schedule of El Paso Natural Gas Company as of December 31, 1997 and 1996, and
for the years ended December 31, 1997, 1996 and 1995, which report is included
in the Annual Report on Form 10-K of El Paso Natural Gas Company for the year
ended December 31, 1997. We also consent to the reference to our firm under the
caption "Experts."
PricewaterhouseCoopers LLP
Houston, Texas
August 6, 1998
