SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event reported: September 25, 1997
SONAT INC.
(Exact name of registrant as specified in its charter)
Delaware 1-7179 63-0647939
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
AmSouth-Sonat Tower,
Birmingham, Alabama 35203
(Address of Principal Executive Offices) (Zip code)
Registrant's telephone number, including area code: (205) 325-3800
<PAGE>
Item 5. Other Events
On September 25, 1997, Sonat Inc. (the "Company") entered into an Underwriting
Agreement, in the form of Exhibit 1 hereto, with the Underwriters named therein
with respect to the issue and sale by the Company of $100,000,000 aggregate
principal amount of its 6.75% Notes due October 1, 2007 (the "Notes"),
registered under its Registration Statement on Form S-3 (No. 33-62166) (the
"Registration Statement"). The Notes will be issued under the Indenture dated as
of June 1, 1986, between the Company and The Chase Manhattan Bank, as successor
by merger to Chemical Bank and Manufacturers Hanover Trust Company, as Trustee,
in the form of Exhibit 4-(1) hereto, as supplemented by the First Supplemental
Indenture dated as of June 1, 1995, in the form of Exhibit 4-(2) hereto.
On September 25, 1997, by resolution duly adopted by a meeting at which a quorum
was present and acting throughout, the Board of Directors of the Company
designated and appointed William A. Smith, whose address is 1900 Fifth Avenue
North, Birmingham, Alabama 35203, as the Company's agent for service in all
matters relating to the Registration Statement and any amendments thereto.
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
The Index to Exhibits to this Report is incorporated by reference herein by
reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SONAT INC.
By: /s/ JAMES E. MOYLAN, JR.
--------------------------------
Name: James E. Moylan, Jr.
Title: Senior Vice President and
Chief Financial Officer
Dated: September 29, 1997
<PAGE>
SONAT INC.
CURRENT REPORT ON FORM 8-K
INDEX TO EXHIBITS
Exhibit No. Exhibit
1.* Form of Underwriting Agreement, dated September 25, 1997,
including Underwriting Agreement Standard Provisions, dated
September 25, 1997, incorporated into the Underwriting
Agreement by reference
4-(1) Indenture, dated as of June 1, 1986, between the Company and
The Chase Manhattan Bank, as successor by merger to
Manufacturers Hanover Trust Company and Chemical Bank,
Trustee, incorporated by reference herein from Exhibit 4-(1)
to Registration Statement No. 33-5947
4-(2) First Supplemental Indenture, dated as of June 1, 1995,
between the Company and the Trustee, incorporated by
reference herein from Exhibit 4-(1) to Form 8-K of Sonat Inc.
dated June 6, 1995
4-(3)* Form of Note
12* Computation of Ratio of Earnings to Fixed Charges
- -------------
* Filed herewith.
EXHIBIT 1
UNDERWRITING AGREEMENT
----------------------
Sonat Inc.,
Amsouth-Sonat Tower,
Birmingham, Alabama 35203.
Dear Sirs:
The underwriters named below (such underwriters being herein called
the "Underwriters") understand that Sonat Inc., a Delaware corporation (the
"Company"), proposes to issue and sell $100,000,000 aggregate principal amount
of 6.75% Notes due October 1, 2007 (the "Purchased Securities"), registered on
Registration Statement No. 33-62166. Subject to the terms and conditions set
forth herein and incorporated by reference herein and referred to below, the
Company hereby agrees to sell and the Underwriters agree to purchase, severally
and not jointly, the principal amount of such Purchased Securities set forth
opposite their names at 99.098% of their principal amount.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
NAME OF NOTES
- ---- ----------------
<S> <C>
Goldman, Sachs & Co. ....................................... $ 33,400,000
Chase Securities Inc. ...................................... 33,300,000
Merrill Lynch, Pierce,
Fenner & Smith Incorporated............................. 33,300,000
------------
Total ............................................ $100,000,000
============
</TABLE>
The Underwriters will pay for such Purchased Securities upon delivery
thereof at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New
York at 10:00 a.m. (New York time) on September 30, 1997.
<PAGE>
The Purchased Securities shall have the following terms:
Maturity: October 1, 2007
Interest Rate: 6.75%
Redemption Provisions: Not redeemable prior to maturity.
DefeasanceProvisions: Subject to the defeasance and covenant
defeasance provisions of Article 15 of the Indenture, dated as of
June 1, 1986, between the Company and The Chase Manhattan Bank,
as successor by merger to Manufacturers Hanover Trust Company, as
Trustee.
Interest Payment Dates: April 1 and October 1, commencing April 1,
1998.
Unless otherwise provided herein, all the provisions contained in the
document entitled Sonat Inc. Underwriting Agreement Standard Provisions, dated
September 25, 1997, a copy of which is attached hereto, are herein incorporated
by reference in their entirety and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein.
All notices and communications hereunder to an Underwriter shall be
given to Goldman, Sachs & Co., attention of the Registration Statement, at the
address set forth below.
<PAGE>
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
Very truly yours,
GOLDMAN, SACHS & CO.
CHASE SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By:-------------------------------------
(Goldman, Sachs & Co.)
Accepted:
SONAT INC.
By:------------------------
Name:
Title:
<PAGE>
SONAT INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT STANDARD PROVISIONS
------------
September 25, 1997
Sonat Inc., a Delaware corporation (the "Company"), proposes to issue
and sell from time to time certain of its debt securities ("Debt Securities")
registered under the Securities Act of 1933 (the "Securities Act") as set forth
in Section 3. The Debt Securities are to be issued under an indenture, dated as
of June 1, 1986 as amended or supplemented from time to time (the "Indenture"),
between the Company and The Chase Manhattan Bank, as successor by merger to
Manufacturers Hanover Trust Company, as Trustee (the "Trustee").
From time to time, the Company may enter into one or more underwriting
agreements that provide for the sale of the Debt Securities to the underwriter
or several underwriters named therein (the "Underwriters"). The standard
provisions set forth herein may be incorporated by reference in any such
underwriting agreement (an "Underwriting Agreement"). The Underwriting
Agreement, including the provisions hereof incorporated therein by reference, is
herein referred to as this Agreement.
1. SALE AND PURCHASE OF THE DEBT SECURITIES. On the basis of the
representations, warranties and agreements herein contained, the Company
proposes to issue and sell the Debt Securities in one or more series, which
series may vary as to their terms (including, but not limited to, interest rate,
maturity, any redemption provisions and any sinking fund requirements), all of
such terms for any particular series being determined at the time of sale. All
or a portion of a particular series of the Debt Securities will be purchased by
the Underwriters for resale upon terms of offering determined at the time of
sale. The Debt Securities so to be purchased in any such offering are
hereinafter referred to as the "Purchased Securities", and any firm or firms
acting as representatives of such Underwriters are hereinafter referred to as
the "Representatives". If with respect to the Purchased Securities such
Representatives are acting on behalf of the Underwriters, references herein to
the Underwriters (or a majority in interest thereof) or the Representatives in
the alternative shall be deemed to refer only to the Representatives. The term
"Underwriters' Securities" means Purchased Securities other than Contract
Securities. The term "Contract Securities" means Purchased Securities, if any,
to be purchased pursuant to delayed delivery contracts referred to below.
If this Agreement provides for sales of Purchased Securities pursuant
to delayed delivery contracts, the Company hereby authorizes the Underwriters to
solicit offers to purchase Contract Securities on the terms and subject to the
conditions set forth in the Prospectus (as hereinafter defined) pursuant to
<PAGE>
delayed delivery contracts substantially in the form of Schedule I attached
hereto (the "Delayed Delivery Contracts") but with such changes therein as the
Company may authorize or approve. Delayed Delivery Contracts are to be with
institutional investors approved by the Company and of the types set forth in
the Prospectus. On the Closing Date (as hereinafter defined), the Company will
pay the Underwriters the fee set forth in the Underwriting Agreement in respect
of the principal amount of Contract Securities. The Underwriters will not have
any responsibility in respect of the validity or the performance of Delayed
Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the Contract Securities shall be deducted from the
Purchased Securities to be purchased by the several Underwriters and the
aggregate principal amount of Purchased Securities to be purchased by each
Underwriter shall be reduced pro rata in proportion to the principal amount of
Purchased Securities set forth opposite each Underwriter's name in the
Underwriting Agreement, except to the extent that the Representatives, if any,
determine that such reduction shall be otherwise and so advise the Company.
The obligations of the Underwriters under this Agreement are several
and not joint.
2. PAYMENT AND DELIVERY. Delivery by the Company of the Underwriters'
Securities and payment by the Underwriters therefor by wire transfer to the
Company's account in immediately available funds, or, if the Underwriters'
Securities are denominated in a currency or currencies other than United States
Dollars, by such other means specified in this Agreement, shall take place at
the office, on the date and at the time specified in this Agreement, which date
and time may be postponed for not more than twelve business days by agreement
between a majority in interest of the Underwriters or the Representatives and
the Company (such date and time of delivery and payment for the Underwriters'
Securities is hereinafter referred to as the "Closing Date").
The Underwriters' Securities shall be registered in such names and
shall be in such denominations as the Underwriters or Representatives shall
request at least two full business days (or such lesser number of days as shall
be specified in the Underwriting Agreement) prior to the Closing Date and shall
be made available to the Underwriters or Representatives for checking and
packaging at least one full business day prior to the Closing Date.
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The Company
has filed with the Securities and Exchange Commission (the "Commission"),
pursuant to the Securities Act and the rules and regulations adopted by the
Commission thereunder (the "Rules"), a registration statement on Form S-3,
including a prospectus, relating to the Debt Securities, and such registration
statement has become effective. The Company will file with, or mail for filing
to, the Commission a prospectus supplement specifically relating to the
Purchased Securities pursuant to Rule 424 under the Securities Act (the
"Prospectus Supplement"). The term "Registration Statement" means the
<PAGE>
registration statement, including financial statements, exhibits and
Incorporated Documents (as hereinafter defined) as amended to the date of this
Agreement. The term "Basic Prospectus" means the prospectus included in the
Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term "Preliminary Prospectus" means
the Basic Prospectus together with a preliminary prospectus supplement
specifically relating to the Purchased Securities. As used herein, the terms
"Registration Statement", "Basic Prospectus", "Prospectus" and "Preliminary
Prospectus" shall include in each case all documents incorporated, or deemed to
be incorporated, therein by reference pursuant to the requirements of Item 12 of
Form S-3 under the Securities Act (the "Incorporated Documents"), and any
reference herein to the terms "amend", "amendment" or "supplement" with respect
to any of the foregoing documents shall be deemed to refer to and include the
filing of any Incorporated Documents after the date of this Agreement.
The Company understands that the Underwriters propose to make a public
offering of the Purchased Securities, as set forth in and pursuant to the
Prospectus relating thereto. The Company hereby confirms that the Underwriters
and any dealers selected by them are authorized to distribute such Prospectus
(as from time to time further amended or supplemented if the Company furnishes
amendments or supplements thereto to the Underwriters in addition to the
Prospectus Supplement).
4. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to each Underwriter that:
(a) The Company meets the requirements for the use of Form S-3
under the Securities Act.
(b) The Registration Statement, at the time it became effective,
and the Prospectus contained therein, complied, and on the date of the
Prospectus Supplement and when any amendment to the Registration
Statement becomes effective or any supplement to the Prospectus is
filed with the Commission, the Registration Statement, the Prospectus
and any such amendment or supplement, respectively, will comply, fully
in all material respects with the requirements of the Securities Act
and the Rules; the Incorporated Documents comply and will comply fully
in all material respects with the requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations adopted by the Commission thereunder; the Indenture
complies and will comply fully in all material respects with the
requirements of the Trust Indenture Act of 1939 (the "Trust Indenture
Act"); and at the date of the Prospectus Supplement, at the date of
any further amendment to the Registration Statement or supplement to
the Prospectus and at the Closing Date, the Registration Statement and
Prospectus will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except that
this representation and warranty does not apply to (i) statements or
omissions in the Registration Statement or Prospectus (or in
amendments or supplements thereto) made in reliance upon information
furnished in writing to the Company by any Underwriter or the
Representatives on behalf of any Underwriter expressly for use
therein; or (ii) that part of the Registration Statement which shall
constitute the Statement of Eligibility of the Trustee under the Trust
Indenture Act on Form T-1, except statements or omissions in such
Statement made in reliance upon information furnished in writing to
the Trustee on behalf of the Company for use therein.
<PAGE>
(c) The certificate delivered pursuant to paragraph (d) of
Section 5 hereof in connection with the issuance and sale of the
Underwriters' Securities will be, on the date on which it is
delivered, in all material respects true and complete.
5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder to purchase and pay for the Underwriters' Securities are
subject to the following conditions:
(a) No order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall
be pending before or threatened by the Commission and any request for
additional information on the part of the Commission (to be included
in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the reasonable satisfaction of the
Underwriters or the Representatives.
(b) Subsequent to the execution of this Agreement, (i) there
shall not have been any change in the capital stock or long term debt
of the Company and its subsidiaries, (ii) there shall not have been
any change on a consolidated basis in the general affairs, management,
financial position or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and
Prospectus, (iii) the Company and its subsidiaries shall not have
sustained any material loss or interference with their business taken
as a whole from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is
not set forth in the Registration Statement and Prospectus, (iv) no
downgrading shall have occurred in the rating accorded the Company's
debt securities by Standard & Poor's Corporation or Moody's Investors
Service, Inc. and (v) if the Underwriters' Securities are denominated
in a currency or currencies other than United States Dollars, there
shall not have occurred any action by any governmental authority or
any change involving currency exchange rates or exchange controls, if
in the reasonable judgment of a majority in interest of the
Underwriters or the Representatives any such development referred to
in clause (i), (ii), (iii), (iv) or (v) is so material and adverse as
to make it impracticable or inadvisable to consummate the sale and
delivery of the Underwriters' Securities by the Underwriters as
contemplated in the Prospectus.
(c) The representations and warranties of the Company contained
herein shall be true and correct on and as of the Closing Date and the
Company shall have performed all covenants and agreements herein
contained to be performed on its part at or prior to the Closing Date.
(d) The Underwriters or the Representatives shall have received
on the Closing Date a certificate, dated the Closing Date, of the
Chairman of the Board, the Vice Chairman of the Board, the President,
any Vice President or the Treasurer and the chief financial or chief
accounting officer of the Company, which shall certify that (i) no
<PAGE>
order suspending the effectiveness of the Registration Statement or
prohibiting the sale of the Purchased Securities has been issued and
no proceedings for such purpose are pending before or, to the
knowledge of such officers, threatened by the Commission and (ii) the
representations and warranties of the Company contained herein are
true and correct on and as of the Closing Date and the Company has
performed all covenants and agreements herein contained to be
performed on its part at or prior to the Closing Date.
(e) Within 24 hours after the execution of the Underwriting
Agreement by the Company (or at such later time acceptable to the
Representatives, or if there are none, such firm as may be designated
by a majority in interest of the Underwriters) and on the Closing
Date, the Representatives or such designated firm shall have received
signed letters from Ernst & Young, dated the date of delivery, (i) in
the case of the first such letter, substantially identical to the
proposed form of such letter previously delivered to the
Representatives or such designated firm; and (ii) in the case of the
second such letter, confirming, on the basis of a review in accordance
with the procedures set forth in the first such letter, that nothing
has come to their attention from the date of the most recent financial
statements of the Company filed with the Commission, audited or
interim, as the case may be, to a date not more than six days prior to
the Closing Date which would require any change in the first such
letter if it were required to be dated and delivered on the Closing
Date, except in each case as described in the second such letter.
(f) The Underwriters or the Representatives shall have received
on the Closing Date from Hughes, Hubbard & Reed LLP an opinion, dated
the Closing Date, substantially identical to the form of their opinion
attached hereto as Annex A.
(g) The Underwriters or the Representatives shall have received
on the Closing Date from Sullivan & Cromwell, counsel for the
Underwriters, opinions dated the Closing Date, with respect to the
Company, the Underwriters' Securities, the Registration Statement and
Prospectus and this Agreement. Such opinions shall be satisfactory in
all respects to the Underwriters or the Representatives, and the
Company shall have furnished to counsel for the Underwriters such
documents as they may reasonably request for the purpose of enabling
them to render such opinions.
(h) Subsequent to execution of this Agreement there shall not
have occurred any of the following: (x) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange or (y) a general moratorium on commercial banking activities
in New York declared by either Federal or New York State authorities.
(i) The Company shall have complied with the provisions of
Section 6(d) hereof with respect to the furnishing of prospectuses on
the New York business day next succeeding the date of this Agreement.
6. COVENANTS. The Company covenants and agrees as follows:
(a) To advise the Underwriters or the Representatives promptly of
any amendment or supplementation of the Registration Statement or the
<PAGE>
Prospectus (excluding the filing of Incorporated Documents) prior to
the termination of the distribution of the Underwriters' Securities,
to furnish the Underwriters or the Representatives with a copy of such
amendment or supplementation, and not to file any such amendment or
supplementation to which a majority in interest of the Underwriters or
the Representatives shall reasonably object.
(b) As soon as the Company is advised thereof, to advise the
Underwriters or the Representatives (i) of the initiation or
threatening by the Commission of any proceedings for the issuance of
any order suspending the effectiveness of the Registration Statement,
or the qualification of the Indenture, and (ii) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the
Registration Statement, any Preliminary Prospectus or the Prospectus.
The Company will make every reasonable effort to prevent the issuance
of an order suspending the effectiveness of the Registration Statement
or the qualification of the Indenture and if any such order is issued
to obtain as soon as possible the lifting thereof.
(c) To deliver, without charge, to the counsel for the
Underwriters, three signed copies of the registration statement,
including exhibits and Incorporated Documents, relating to the Debt
Securities in the form it became effective and of all amendments
thereto, including exhibits.
(d) Prior to 10:00 a.m., New York City time, on the business day
next succeeding the date of the Underwriting Agreement, to furnish the
Underwriters with copies of the Prospectus in New York City in such
quantities as the Representatives may reasonably request, and during
such period as a prospectus is required by law to be delivered in
connection with sales of Purchased Securities by an Underwriter or
dealer, to deliver to the Representatives or to Underwriters and
dealers, at such office or offices as the Underwriters or the
Representatives may designate, as many conformed copies of the
Indenture, the Registration Statement (excluding exhibits but
including the Incorporated Documents), each Preliminary Prospectus,
the Prospectus and all amendments and supplements to such documents as
the Underwriters or the Representatives may reasonably request.
(e) During the period in which copies of the Prospectus are to be
delivered as provided in paragraph (d) above, if any event occurs as a
result of which it shall be necessary to amend or supplement the
Prospectus in order to make the statements therein not misleading or
to file any document which will be deemed an Incorporated Document in
order to comply with the Exchange Act and the rules and regulations
thereunder, forthwith (at its own expense, if such supplement or
amendment is required at any time within nine months from the first
date upon which Purchased Securities to which such Prospectus relates
are offered to the public) to prepare and file with the Commission
either (i) amendments or supplements to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not
be misleading or (ii) documents which will effect such compliance.
<PAGE>
Delivery by Underwriters of any such amendments or supplements to the
Prospectus or documents shall not constitute a waiver of any of the
conditions set forth in Section 5 hereof. In case any Underwriter is
required to deliver a Prospectus nine months or more after the first
date upon which the Purchased Securities to which such Prospectus
relates are offered to the public, the Company will, upon the request
of such Underwriter or the Representatives but at the expense of such
Underwriter, furnish such Underwriter with reasonable quantities of
prospectuses complying with Section 10(a)(3) of the Securities Act.
The Underwriters agree to use the Prospectus, as amended and
supplemented from time to time, in lieu of the Prospectus theretofore
in effect.
(f) To make generally available to the Company's security
holders, as soon as practicable, but in no event later than 45 days
after the end of the 12-month period beginning at the end of the
Company's fiscal quarter during which the filing of the Prospectus
pursuant to Rule 424 under the Securities Act occurs (except not later
than 95 days if such filing date is in the quarter ending December
31), an earning statement which satisfies the provisions of Section
11(a) of the Securities Act.
(g) To take such action as the Underwriters or the
Representatives may reasonably request in order to qualify the
Purchased Securities for offer and sale under the securities or "blue
sky" laws of such jurisdictions as the Underwriters or the
Representatives may reasonably request; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
which would subject it to service of process in suits, other than
those arising out of the offering or sale of the Purchased Securities,
in any jurisdiction where it is not now so subject.
(h) During the period of five years from the date of this
Agreement, to supply to the Representatives, if any, and to each other
Underwriter who may so request in writing, a copy of each annual or
other report it shall be required to file with the Commission.
(i) To pay, or reimburse if paid by the Underwriters or the
Representatives, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all reasonable costs
and expenses incident to the performance of the obligations of the
Company under this Agreement, including those relating to (i) the
preparation, printing and filing of the Registration Statement and
exhibits thereto, each Preliminary Prospectus, the Prospectus, all
amendments and supplements to the Registration Statement and the
Prospectus (except as provided in paragraph (e) above), and the
printing of the Underwriting Agreements (including the Agreement Among
Underwriters, if any, and the Agreements With Dealers, if any), (ii)
the issuance of the Purchased Securities and the preparation and
delivery of certificates for the Purchased Securities to the
Underwriters, (iii) the registration or qualification of the Purchased
Securities for offer and sale under the securities or "blue sky" laws
of the various jurisdictions referred to in paragraph (g) above,
including the fees and disbursements of counsel for the Underwriters
in connection therewith and the preparation and printing of
<PAGE>
preliminary or supplementary "blue sky" memoranda and legal investment
memoranda, (iv) the furnishing to the Representatives, if any, and the
Underwriters of copies of each Preliminary Prospectus, the Prospectus
and all amendments or supplements to the Prospectus (except as
provided in paragraph (e) above), and of the several documents
required by this Section 6 to be so furnished, including costs of
shipping and mailing, (v) the listing, if any, of the Purchased
Securities on any national securities exchange, (vi) the filing
requirements of the National Association of Securities Dealers, Inc.,
in connection with its review of corporate financings, (vii) the
rating of the Purchased Securities by rating agencies, and (viii) the
furnishing to the Representatives, if any, and to the Underwriters of
copies of all reports and information required by paragraph (h) above,
including costs of shipping and mailing; but the Company shall not in
any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the
Purchased Securities.
(j) To endeavor to obtain as promptly as practicable the listing
of the Purchased Securities on the national securities exchange
designated in the Underwriting Agreement if any such designation is
made.
(k) To prepare the Prospectus as amended and supplemented in
relation to the applicable Purchased Securities in a form approved by
the Underwriters or the Representatives and to file (or transmit by
means reasonably calculated to result in filing) such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the
Commission's close of business on the second business day following
the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 424(b).
(l) As soon as the Company is advised thereof, to advise the
Underwriters of any suspension of the qualification of the Purchased
Securities for offering or sale in any jurisdiction or the initiation
or threatening of any proceeding for any such purpose. The Company
will make every reasonable effort to prevent the issuance of an order
suspending the effectiveness of the qualification of the Purchased
Securities for offering or sale, and if any such order is issued to
obtain as soon as possible the lifting thereof.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any investigation, legal and
other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or
<PAGE>
the Prospectus, or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as any such untrue statement or omission or
alleged untrue statement or omission was made in (i) such Preliminary
Prospectus, the Registration Statement or the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter expressly for use in the preparation thereof or (ii) that
part of the Registration Statement which constitutes the Statement of
Eligibility and Qualification of the Trustee under the Trust Indenture
Act other than any such untrue statement or omission or alleged untrue
statement or omission made therein in reliance upon and in conformity
with information furnished in writing to the Trustee by or on behalf
of the Company for use in the preparation thereof; provided, however,
that the foregoing indemnity agreement against losses, claims, damages
or liabilities is subject to the condition that, insofar as it relates
to any untrue statement or alleged untrue statement, omission or
alleged omission made in the Registration Statement or any Preliminary
Prospectus but eliminated or remedied in the Prospectus (not including
Incorporated Documents), such indemnity agreement shall not inure to
the benefit of any Underwriter from whom the person asserting any
loss, claim, damage or liability purchased the Underwriters'
Securities which are the subject thereof (or to the benefit of any
person who controls such Underwriter) if such Underwriter failed to
send or give a copy of the Prospectus (not including Incorporated
Documents) (or, if the Prospectus (not including Incorporated
Documents) has been amended or supplemented in the manner and under
the circumstances specified in the next following proviso clause and
copies thereof have previously been furnished by or on behalf of the
Company to such Underwriter, then the Prospectus (not including
Incorporated Documents) as so amended or supplemented) to such person
at or prior to the time such action is required by the Securities Act;
provided further, that the foregoing indemnity agreement is also
subject to the condition that, insofar as it relates to any untrue
statement or alleged untrue statement, omission or alleged omission
made in the Prospectus attributable solely to facts or events which
occur after the date of this Agreement which untrue statement or
alleged untrue statement, omission or alleged omission is eliminated
or remedied in an amendment or supplement to the Prospectus (not
including Incorporated Documents), such indemnity agreement shall not
inure to the benefit of any Underwriter from whom the person asserting
any loss, claim, damage or liability purchased the Underwriters'
Securities which are subject thereof (or to the benefit of any person
who controls such Underwriter), if such Underwriter, having previously
been furnished by or on behalf of the Company with copies of the
Prospectus (not including Incorporated Documents) as so amended or
supplemented, in lieu thereof delivered to such person the Prospectus
(not including Incorporated Documents) without such amendment or
supplement.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each director of the Company and each officer of the
Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only
insofar as such losses, claims, damages or liabilities arise out of or
are based upon any untrue statement or omission or alleged untrue
statement or omission which was made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by such Underwriter
expressly for use in the preparation thereof.
(c) Any party which proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an indemnified
party under this Section 7, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served, but the omission so to notify such indemnifying
party of any such action, suit or proceeding shall not relieve it from
any liability which it may have to any indemnified party otherwise
than under this Section 7. In case any such action, suit or proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses, other than
reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of counsel
by such indemnified party has been authorized by the indemnifying
parties, (ii) the indemnified party shall have reasonably concluded
that there may be a conflict of interest between the indemnifying
parties and the indemnified party in the conduct of the defense of
such action (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the
indemnified party) or (iii) the indemnifying parties shall not in fact
have employed counsel to assume the defense of such action. An
indemnifying party shall not be liable for any settlement of any
action or claim effected without its consent. For the purposes of
clause (ii) of the preceding sentence only, any indemnified party or
parties shall be represented by one counsel whom they may select with
the approval, which shall not be unreasonably withheld, of the
indemnifying parties.
8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7 is applicable but for any reason, other than as specified in Section
7, is held to be unavailable from the indemnifying party, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted),
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of Purchased Securities. If however, the allocation provided by the
<PAGE>
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
then Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering of Purchased Securities (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section 8
were determined by PRO RATA allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8. Notwithstanding the provisions of this Section 8, (i) in no case shall any
Underwriter (except as may be provided in the Agreements Among Underwriters, if
any) be responsible for any amount in excess of the sum of the underwriting
discount applicable to the Underwriters' Securities purchased by such
Underwriter hereunder and commissions received for sales of Contract Securities,
if any, and (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each person, if any, who controls the Company within the meaning of the
Securities Act and the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 8, notify such party
or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this Section 8. No party
shall be liable for contribution with respect to any action or claim settled
without its written consent. The Underwriters' obligations under this section to
contribute are several in proportion to their respective underwriting
obligations and not joint.
<PAGE>
9. TERMINATION. This Agreement may be terminated by the
Representatives or by Underwriters who have agreed to purchase in the aggregate
at least 50% of the principal amount of the Underwriters' Securities by
notifying the Company at any time
(a) at or prior to the Closing Date if, in the judgment of the
Representatives or in the judgment of such Underwriters, as the case
may be, payment for and delivery of the Underwriters' Securities is
rendered impracticable or inadvisable because (i) any event shall have
occurred or shall exist which makes untrue or incorrect in any
material respect any statement or information contained in the
Registration Statement or Prospectus or which is not reflected in the
Registration Statement or Prospectus but should be reflected therein
in order to make the statements or information contained therein not
misleading in any material respect, or (ii) the declaration by the
United States of a national emergency or war shall have occurred, or
there shall have occurred an outbreak or escalation of hostilities
involving the United States to such an extent as, in the judgment of
the Underwriters, to affect materially and adversely the marketability
of the Underwriters' Securities; or
(b) at or prior to the Closing Date, if any of the conditions
specified in Section 5 hereof shall not have been fulfilled when and
as required by this Agreement.
If this Agreement is terminated pursuant to any of the provisions
hereof, except as otherwise provided in Sections 6(i), 7 and 10 hereof, the
Company shall not be under any liability to any Underwriter and no Underwriter
shall be under any liability to the Company, except that (a) if this Agreement
is terminated by the Representatives or the Underwriters because of any failure
or refusal on the part of the Company to comply with the terms or to fulfill any
of the conditions of this Agreement, the Company will reimburse the Underwriters
for all their reasonable out-of-pocket expenses up to $20,000 (including the
fees and disbursements of their counsel) and (b) no Underwriter who shall have
failed or refused to purchase the Underwriters' Securities agreed to be
purchased by it hereunder, without some reason sufficient hereunder to justify
its cancellation or termination of its obligations hereunder, shall be relieved
of liability to the Company or to the other Underwriters for damages occasioned
by its default.
10. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the termination of
this Agreement) to purchase on the Closing Date the Underwriters' Securities
agreed to be purchased by such Underwriter or Underwriters on such Closing Date,
the Representatives or, if there are none, such firm as may be designated by a
majority in interest of the Underwriters, may find one or more substitute
underwriters to purchase such Underwriters' Securities, or make such other
arrangements as they may deem advisable or one or more of the remaining
Underwriters may agree to purchase such Underwriters' Securities in such
proportions as may be approved by the Representatives or such designated firm,
in each case upon the terms herein set forth. If no such arrangements have been
made within 24 hours after the Closing Date, and
(a) the aggregate principal amount of Underwriters' Securities to
be purchased by the defaulting Underwriters on the Closing Date shall
<PAGE>
not exceed 10% of the total principal amount of Underwriters'
Securities that the Underwriters are obligated to purchase on the
Closing Date, each of the nondefaulting Underwriters shall be
obligated to purchase such Underwriters' Securities on the terms
herein set forth in proportion to their respective obligations
hereunder; or
(b) the aggregate principal amount of Underwriters' Securities to
be purchased by the defaulting Underwriters on the Closing Date shall
exceed 10% of the total principal amount of Underwriters' Securities
that the Underwriters are obligated to purchase on the Closing Date,
the Company shall be entitled to an additional period of 24 hours
within which to find one or more substitute underwriters satisfactory
to the Representatives or such designated firm, to purchase such
Underwriters' Securities upon the terms set forth herein.
In any such case, either the Representatives or such designated firm
or the Company shall have the right to postpone the Closing Date for a period of
not more than five business days in order that necessary changes and
arrangements may be effected. If neither the non-defaulting Underwriters nor the
Company shall make arrangements pursuant to clause (b) of this Section 10 within
the period stated for the purchase of the Underwriters' Securities which such
defaulting Underwriters agreed to purchase, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter to the Company
and without liability on the part of the Company, except, in both cases, as
provided in Section 7, 8 and 9 hereof. The provisions of this Section 10 shall
not in any way affect the liability of any defaulting Underwriter to the Company
or the non-defaulting Underwriters arising out of such default.
11. MISCELLANEOUS. The representations, warranties and covenants of
the Company in this Agreement shall remain in full force and effect regardless
of (a) any investigation made by or on behalf of any Underwriter or controlling
person or by or on behalf of the Company or any controlling person, director or
officer, and (b) delivery of and payment for the Purchased Securities under this
Agreement. The indemnification and reimbursement agreements contained in
Sections 7 and 8 hereof shall remain in full force and effect regardless of any
termination of this Agreement.
This Agreement has been and is made solely for the benefit of the
Underwriters and the Company, and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters or the Company, directors and officers of the Company and their
respective successors and assigns, and no other person, partnership, association
or corporation shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
Purchased Securities from any Underwriter merely because of such purchase.
In all dealings hereunder, the Representatives, if designated, shall
act on behalf of each of the Underwriters, and the parties hereto shall be
entitled to act and rely upon any statement, request, notice or agreement on
behalf of any Underwriter made or given by such firm as the Representatives may
designate to the Company.
<PAGE>
Except as otherwise provided in this Agreement, all notices and
communications hereunder shall be in writing and mailed or delivered, or by
telephone or telegraph if subsequently confirmed in writing, to the Underwriters
at their addresses furnished to the Company in writing, and to the Company at
1900 Fifth Avenue North, AmSouth-Sonat Tower, Birmingham, Alabama 35203,
Attention: General Counsel.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
<PAGE>
SCHEDULE I
DELAYED DELIVERY CONTRACT
__________, 19__
Dear Sirs:
The undersigned hereby agrees to purchase from Sonat Inc., a Delaware
corporation (the "Company"), and the Company agrees to sell to the undersigned
$
principal amount of the Company's [state title of issue] (the "Securities"),
offered by the Company's Prospectus dated , 19__ and Prospectus Supplement dated
, 19__, receipt of copies of which is hereby acknowledged, at a purchase price
of % of the principal amount thereof plus accrued interest and amortization, if
any, and on the further terms and conditions set forth in this contract. The
undersigned does not contemplate selling Securities prior to making payment
therefor.
The undersigned will purchase from the Company Securities in the
principal amounts and on the delivery dates set forth below:
<TABLE>
<CAPTION>
PLUS ACCRUED INTEREST
AND AMORTIZATION,
DELIVERY DATE PRINCIPAL AMOUNT IF ANY, FROM:
------------- ---------------- ---------------------
<S> <C> <C>
$
$
$
</TABLE>
Each such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date".
Payment for the Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Company or its order [by
certified or official bank check in immediately available funds at the office of
, New York, New York, at 10:00 a.m. (New York time) on the
Delivery Date] [state means of payment if the Securities are denominated in a
currency or currencies other than United States Dollars], upon delivery to the
undersigned of the Securities to be purchased by the undersigned on the Delivery
Date, in such denominations and registered in such names as the undersigned may
designate by written or telegraphic communication addressed to the Company not
less than five full business days prior to the Delivery Date. If no such request
is received, the Securities will be registered in the name of the undersigned
<PAGE>
and issued in a denomination equal to the aggregate principal amount of
Securities to be purchased by the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Securities to be made by the undersigned shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above, of such part of the Securities as is to
be sold to them. Promptly after completion of sale and delivery to the
Underwriters, the Company will mail or deliver to the undersigned at its address
set forth below notice to such effect, accompanied by a copy of the opinion of
counsel for the Company delivered to the Underwriters in connection therewith.
The undersigned represents and warrants to you that its investment in the
Securities is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which govern such
investment.
Failure to take delivery of and make payment for securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first-served basis.
If this contract is acceptable to the Company, it is requested that
the Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below. This will
become a binding contract, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
<PAGE>
This contract shall be governed by and construed in accordance with
the laws of the State of NEW YORK.
Yours very truly,
----------------------------------------
(Purchaser)
By--------------------------------------
----------------------------------------
----------------------------------------
(Title)
----------------------------------------
----------------------------------------
(Address)
Accepted:
SONAT INC.
By-------------------------------
- ---------------------------------
(Title)
- ---------------------------------
- ---------------------------------
(Address)
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)
<TABLE>
<CAPTION>
TELEPHONE NUMBER
NAME (INCLUDING AREA CODE) DEPT.
---- --------------------- -----
<S> <C> <C>
</TABLE>
<PAGE>
ANNEX A
Pursuant to Section 5(f) of the Sonat Inc. Underwriting Agreement Standard
Provisions, Hughes Hubbard & Reed LLP shall furnish an opinion with respect to
the Federal laws of the United States, the laws of the State of New York and the
General Corporation Law of the State of Delaware to the effect that:
(i) The Company was duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power under the General Corporation Law of such State to carry on the
business in which it is now engaged, as described in the Prospectus, and is duly
qualified as a foreign corporation in the States of Alabama, New York, and
Texas.
(ii) Southern Natural Gas Company and Sonat Exploration Company were
duly incorporated and are validly existing as corporations in good standing
under the laws of the State of Delaware with corporate power under the General
Corporation Law of such State to carry on the business in which they are now
engaged, as described in the Prospectus, and the shares of capital stock of each
such corporation owned by the Company are duly and validly issued, fully paid
and nonassessable and, to such counsel's knowledge, are owned by the Company
free and clear of all mortgages, pledges, liens, encumbrances and other security
interests.
(iii) The Purchased Securities and the Indenture conform in all
material respects to the descriptions thereof in the Prospectus under the
captions "Description of Debt Securities" and "Description of Notes".
(iv) The Indenture has been duly authorized, executed and delivered by
the Company, has been duly qualified under the Trust Indenture Act of 1939, as
amended, and, assuming that it has been duly authorized, executed and delivered
by the Trustee, shall constitute a valid and binding agreement of the Company in
accordance with its terms, except as limited by general equitable principles and
by bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights; and the Purchased Securities have been duly
authorized and executed by the Company, and, when authenticated, issued and
delivered in accordance with the provisions of the Indenture and the
Underwriting Agreement, will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture, except as limited by general
equitable principles and by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights.
(v) The Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the Securities
Act or proceedings therefor instituted or threatened under the Securities Act by
the Securities and Exchange Commission.
(vi) The Registration Statement and the Prospectus comply as to form
in all material respects with the requirements of the Securities Act, the Trust
Indenture Act of 1939, as amended, and the applicable Rules and Regulations of
the Securities and Exchange Commission thereunder (except for the Statement of
Eligibility of the Trustee on Form T-1, the financial statements and notes
<PAGE>
thereto, related schedules and exhibits and other financial data included in or
omitted from the Registration Statement and other matters referred to in the
Prospectus under "Experts", as to which such counsel may express no opinion).
(vii) No approval, authorization, consent or other order of any public
board or body (other than in connection or in compliance with the provisions of
the Federal securities laws or the securities or Blue Sky laws of any State) is
legally required for the issuance and sale by the Company of the Purchased
Securities.
(viii) The Underwriting Agreement has been duly authorized, executed
and delivered on behalf of the Company.
EXHIBIT 4-(3)
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, 55 Water Street, New York, New York (the
"Depositary"), to Sonat Inc. or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of CEDE & Co.
or in such other name as is requested by an authorized representative of The
Depository Trust Company (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of the Depositary), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No. R-1 $100,000,000
CUSIP # 835415AF7
SONAT INC.
6.75% NOTES DUE OCTOBER 1, 2007
Sonat Inc., a corporation duly organized and existing under the laws
of the State of Delaware (herein called the "Company", which term shall also
include any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & Co., or registered assigns,
the principal sum of ONE HUNDRED MILLION DOLLARS ($100,000,000) on October 1,
2007 in such coin or currency of the United States as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest on said principal sum, until said principal sum is paid or made
available for payment, at the rate of 6.75% per annum in like coin or currency,
from September 30, 1997 or from the most recent October 1 or April 1, as the
case may be (each, an "Interest Payment Date"), to which interest has been paid
or duly provided for, semi-annually on April 1 and October 1 in each year,
commencing April 1, 1998 (provided, however, that if the Company shall default
in payment of the interest due on any Interest Payment Date, then from the next
preceding date to which interest has been paid or if no interest has been paid
on this global Security, then from September 30, 1997), and similarly to pay
interest at the same rate per annum on any overdue principal and on any overdue
instalment of interest. The interest so payable on any April 1 or October 1
will, subject to certain exceptions provided in the Indenture, be paid to the
person in whose name this permanent global Security (or one or more predecessor
Securities) is registered at the close of business on the March 15 or September
15, as the case may be, next preceding such April 1 or October 1. As used
<PAGE>
herein, the term "Depositary" shall mean the Depositary designated as such by
the Company under the Indenture described herein.
This permanent global Security is one of a duly authorized issue of
debentures, notes or other evidences of indebtedness of the Company (herein
referred to as the "Securities") of the series hereinafter specified, all issued
or to be issued under and pursuant to an Indenture, dated as of June 1, 1986,
duly executed and delivered by the Company to The Chase Manhattan Bank, a state
banking corporation organized and existing under the laws of the State of New
York (hereinafter referred to as the "Trustee"), as successor by merger to
Chemical Bank and Manufacturers Hanover Trust Company, as supplemented by the
First Supplemental Indenture, dated as of June 1, 1995, between the Company and
the Trustee (as so supplemented, the "Indenture"). Reference is made to the
Indenture and all indentures supplemental thereto for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Trustee, the Company and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. The
Securities may be issued in one or more series, which different series may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption or sinking fund provisions (if any), may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided. This permanent global Security is one of the series designated as the
Company's 6.75% Notes due October 1, 2007, herein referred to as the "Notes",
limited in aggregate principal amount to $100,000,000.
This permanent global Security is exchangeable in whole or from time
to time in part for Securities of this series in definitive registered form only
as provided herein and in the Indenture. If (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for this
permanent global Security or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (ii) the Company in its sole discretion determines that this permanent
global Security shall be exchangeable for Securities of this series in
definitive registered form and executes and delivers to the Security registrar a
written order of the Company providing that this permanent global Security shall
be so exchangeable, or (iii) any event shall have occurred and be continuing
which, after notice or lapse of time, or both, would become an Event of Default
with respect to the Securities of the series of which this permanent global
Security is a part, this permanent global Security shall be exchangeable for
Securities of this series in definitive registered form, PROVIDED that the
<PAGE>
definitive Securities so issued in exchange for this permanent global Security
shall be in denominations of $1,000 and any integral multiples, without coupons,
and be of like aggregate principal amount and tenor as the portion of this
permanent global Security to be exchanged, and PROVIDED FURTHER that, unless the
Company agrees otherwise, Securities of this series in definitive registered
form will be issued in exchange for this permanent global Security, or any
portion hereof, only if such Securities in definitive registered form were
requested by written notice to the Trustee or the Security registrar by or on
behalf of a Person who is the beneficial owner of an interest hereof given
through the Holder hereof. Except as provided above, owners of beneficial
interests in this permanent global Security will not be entitled to have
Securities registered in their names, will not receive or be entitled to
physical delivery of Securities in definitive registered form and will not be
considered the Holders thereof for any purpose under the Indenture. Neither the
Company, the Trustee, any Paying Agent nor the Securities registrar shall have
any responsibility or liability for any aspect of records relating to or
payments made on account of beneficial ownership interests in this permanent
global Security, or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
Any exchange of this permanent global Security or portion hereof for
one or more Securities of this series in definitive registered form will be made
at the New York office of the Trustee or the Security registrar, upon request by
or on behalf of the Person who is the beneficial owner of an interest herein
given through the Holder hereof and in accordance with instructions given by the
Company to the Trustee, the Security registrar and the Depositary. Upon exchange
of any portion of this permanent global Security for one or more Securities of
this series in definitive registered form, the Trustee or the Security
registrar, as the case may be, shall cancel this permanent global Security and
issue a new permanent global Security or Securities of this series and of like
tenor for the remaining principal amount. Except as otherwise provided herein or
in the Indenture, until exchanged in full for one or more Securities of this
series in definitive registered form, this permanent global Security shall in
all respects be subject to and entitled to the same benefits and conditions
under the Indenture as a duly authenticated and delivered Security of this
series in definitive registered form.
Payment of the principal of (and premium, if any) and interest on this
permanent global Security due at maturity will be made by wire transfer in
immediately available funds to such account as may have been designated to the
Paying Agent upon surrender of this Security at the corporate trust office of
<PAGE>
the Paying Agent in the Borough of Manhattan, The City of New York, PROVIDED
that this permanent global Security is presented to the Paying Agent in time for
the Paying Agent to make such payment in accordance with its normal procedures.
Payments of interest (other than interest payable at maturity) will be made by
check mailed to the address of the Person entitled thereto as it appears in the
Security register, or by wire transfer in immediately available funds to such
account as may have been designated to the Paying Agent.
In case an Event of Default, as defined in the Indenture, with respect
to the Notes shall have occurred and be continuing, the principal of all of the
Notes (including this permanent global Security) and the accrued interest
thereon may be declared, and upon such declaration shall become, due and
payable, and such declaration may in certain events be rescinded by the Holders
of a majority in aggregate principal amount of the Notes at the time
Outstanding, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture also provides that the Holders of a majority in
aggregate principal amount of the Notes at the time Outstanding may waive (with
certain exceptions) any past default under the Indenture and its consequences.
The Indenture contains provisions permitting the Company and the Trustee, with
the consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of each series to be affected, evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the Holders of the Securities of each such series; PROVIDED, HOWEVER,
that no such supplemental indenture shall (i) extend the fixed maturity of any
Security, or reduce the rate or extend the time of payment of interest thereon,
or reduce the principal amount thereof or any premium thereon, or make the
principal thereof or any premium or interest thereon payable in any coin or
currency other than that hereinbefore provided, without the consent of the
Holder of such Security, or (ii) reduce the aforesaid percentage of Securities,
the Holders of which are required to consent to any such supplemental indenture,
without the consent of the Holders of all Securities affected thereby. Any such
waiver or consent by the Holder of this permanent global Security (unless
effectively revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this
permanent global Security and of any Security or Securities issued in exchange
herefor or in lieu hereof, irrespective of whether any notation of such waiver
or consent is made upon this permanent global Security.
<PAGE>
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this permanent global Security and (b)
a restrictive covenant and the related Event of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this permanent global Security.
Nothing in the Indenture prohibits the consolidation or merger of the
Company with or into any corporation or corporations, or the sale or conveyance
of all or substantially all of the Company's properties and assets to any other
person, without the consent of the Holders, provided that, in the case of any
consolidation of the Company with, or merger of the Company into, any
corporation or corporations, or any sale or conveyance of the properties and
assets of the Company as an entirety or substantially as an entirety, the
successor corporation, or the person which acquired by sale or conveyance all or
substantially all of the Company's properties and assets, as the case may be,
assumes all of the obligations of the Company under the Indenture and certain
other conditions are met. Upon such assumption the Company will be released from
its liability as obligor on this permanent global Security and all other
obligations and covenants under the Indenture.
Except as set forth in the preceding two paragraphs, no reference
herein to the Indenture and no provision of this permanent global Security shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and premium if any, and interest on this
permanent global Security at the time and place and at the rate and in the coin
or currency herein prescribed.
This permanent global Security is not redeemable prior to maturity.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this permanent global Security is registrable
in the Security register, upon surrender of this permanent global Security for
registration of transfer at the office or agency of the Company in any place
where the principal of (and premium, if any) and interest on this permanent
global Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
registrar duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
<PAGE>
No service charge shall be made for any such registration of transfer
or exchange of Securities as provided above, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Trustee, any Paying Agent and any agent of the
Company or the Trustee may treat the Person in whose name this permanent global
Security is registered as the owner hereof for all purposes, whether or not this
permanent global Security be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary (including, without
limitation, notice of any beneficial interests herein).
Prior to due presentment of this permanent global Security for
registration of transfer, the Company, the Trustee, any Paying Agent and any
agent of the Company or the Trustee may treat the Person in whose name this
permanent global Security is registered as the owner hereof for all purposes,
whether or not this permanent global Security is overdue, and neither the
Company, the Trustee, any Paying Agent nor any such agent shall be affected by
notice to the contrary (including, without limitation, notice of any beneficial
interests herein).
No recourse shall be had for the payment of the principal of, or
premium, if any, or the interest on this permanent global Security, or for any
claim based hereon, or otherwise in respect hereof, or based on or in respect of
the Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
All terms used in this permanent global Security which are defined in
the Indenture and not herein otherwise defined shall have the meanings assigned
to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this permanent global Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: September 30, 1997 SONAT INC.
By:-------------------------------------
Name:
Title:
[SEAL]
Attest:----------------------
Title:
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the permanent global Securities of the series designated herein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By----------------------------------
Authorized Officer
<PAGE>
FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS,
ASSIGNS AND TRANSFERS UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
- --------------------------------------------------------------------------------
the within permanent global Security and all rights thereunder, and hereby does
irrevocably appoint ____________________________________ attorney to transfer
said permanent global Security on the books of the Company, with full power of
substitution in the premises.
Dated: _______________________
NOTICE: The signature to this assignment must correspond with the
name as written upon the face of the within permanent global Security
in every particular without alteration or enlargement or any change
whatsoever and must be guaranteed by a commercial bank or trust
company having its principal office or correspondent in The City of
New York or by a member of the New York Stock Exchange.
EXHIBIT 12
SONAT INC. AND SUBSIDIARIES
Computation of Ratios of Earnings
from Continuing Operations to Fixed Charges
Total Enterprise (a)
<TABLE>
<CAPTION>
Six Months
Ended June 30, Years Ended December 31,
------------------- ----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings from Continuing Operations:
Income (loss) before income taxes $ 154,221 $ 127,571 $ 294,304 $ 282,497 $ 154,871 $ 364,198 $ 133,728
Fixed charges (see computation below) 74,654 78,993 152,830 165,154 127,909 129,160 156,428
Less allowance for interest capitalized (2,032) (2,678) (5,094) (6,540) (6,692) (4,101) (8,422)
--------- --------- --------- --------- --------- --------- ---------
Total Earnings Available for Fixed Charges $ 226,843 $ 203,886 $ 442,040 $ 441,111 $ 276,088 $ 489,257 $ 281,734
--------- --------- --------- --------- --------- --------- ---------
Fixed Charges:
Interest expense before deducting
interest capitalized $ 70,837 $ 75,254 $ 145,406 $ 157,653 $ 120,295 $ 122,204 $ 149,165
Rentals(b) 3,817 3,739 7,424 7,501 7,614 6,956 7,263
--------- --------- --------- --------- --------- --------- ---------
$ 74,654 $ 78,993 $ 152,830 $ 165,154 $ 127,909 $ 129,160 $ 156,428
--------- --------- --------- --------- --------- --------- ---------
Ratio of Earnings to Fixed Charges 3.0 2.6 2.9 2.7 2.2 3.8 1.8
========= ========= ========= ========= ========= ========= =========
- ----------
(a) Amounts include the Company's portion of the captions as they relate to persons accounted for by the equity method.
(b) These amounts represent 1/3 of rentals which approximate the interest factor applicable to such rentals of
the Company and its subsidiaries and continuing unconsolidated affiliates.
</TABLE>
