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 Report (Date of earliest event reported):
July 7, 1999
SONAT INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 1-7179 63-0647939
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
</TABLE>
AmSouth-Sonat Tower, Birmingham, Alabama 35203
(Address of principal executive offices) (Zip Code)
(205) 325-3800
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS.
- ------ ------------
On July 7, 1999, 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 $600,000,000
aggregate principal amount of its 7 5/8% Notes due July 15, 2011 (the "Notes"),
registered under its Registration Statements on Form S-3 (Nos. 333-62383 and
333-82385). The Notes will be issued under the Indenture, dated as of June 1,
1986, between the Company and The Chase Manhattan Bank, formerly known as
Chemical Bank, successor by merger to 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.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
- ------ ---------------------------------
The Exhibit Index to this Report is incorporated herein by reference.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
1* Form of Underwriting Agreement, dated July 7, 1999, which
incorporates the Underwriting Agreement Standard
Provisions, dated September 25, 1997, filed as Exhibit 1
to the Form 8-K of Sonat Inc. dated September 25, 1997
4-(1) Indenture, dated as of June 1, 1986, between the Company
and The Chase Manhattan Bank, formerly known as Chemical
Bank, successor by merger to Manufacturers Hanover Trust
Company, as 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 the Form 8-K of
Sonat Inc. dated June 6, 1995
4-(3)* Form of Note
</TABLE>
- -------------
* Filed herewith.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SONAT INC.
By /S/ WILLIAM A. SMITH
------------------------
William A. Smith
Executive Vice President
and General Counsel
July 12, 1999
UNDERWRITING AGREEMENT
_________________
July 7, 1999
Sonat Inc.,
1900 Fifth Avenue North,
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 $600,000,000 aggregate principal amount
of 7 5/8% Notes due July 15, 2011 (the "Purchased Securities"), registered on
Registration Statements No. 333-62383 and 333-82385 (the "Registration
Statements"). 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 98.274% of their principal amount.
<TABLE>
<CAPTION>
Principal Amount
Name of Notes
- ---- ----------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation........ $ 301,200,000
Chase Securities Inc....................................... 99,600,000
Goldman, Sachs & Co........................................ 99,600,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... 99,600,000
-------------
Total ............................................ $600,000,000
</TABLE>
<PAGE>
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 July 12, 1999.
The Purchased Securities shall have the following terms:
MATURITY: July 15, 2011
INTEREST RATE: 7 5/8%
REDEMPTION PROVISIONS: Redeemable, in whole or in part, at the
option of the Company, at any time, at a redemption price equal to
the greater of (i) 100% of the principal amount redeemed and (ii)
the sum of the present values of the remaining scheduled payments
thereon, discounted to the redemption date on a semi-annual basis at
the Treasury Rate plus 25 basis points, plus in each case accrued
interest on the principal amount being redeemed to the date of
redemption.
DEFEASANCE PROVISIONS: Subject to the defeasance and covenant
defeasance provisions of Article 15 of the Indenture, dated as of
June 1, 1986, as amended between the Company and The Chase Manhattan
Bank (formerly Chemical Bank, successor by merger to Manufacturers
Hanover Trust Company), as Trustee.
INTEREST PAYMENT DATES: January 15 and July 15 commencing January
15, 2000.
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 was filed as Exhibit 1 to the
Company's Current Report on Form 8-K dated September 30, 1997, 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.
Section 3 of the Sonat Inc. Underwriting Agreement Standard
Provisions (the "Standard Provisions") is amended as follows: "(No. 333-62383)"
shall be inserted in the first sentence thereof after the words "a registration
statement on Form S-3".
<PAGE>
Sections 5(f) and 5(g) of the Standard Provisions shall be replaced
in their entirety to read as follows:
"Section 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS.
(f) The Underwriters or the Representatives shall have received on the
Closing Date (i) from Hughes Hubbard & Reed LLP an opinion, dated the
Closing Date, substantially identical to the form of their opinion
attached hereto as Annex A-1 and (ii) from Andrews & Kurth L.L.P., counsel
for El Paso Energy Corporation, an opinion, dated the Closing Date, with
respect to the periodic reports of El Paso Energy Corporation included in
the Company's Current Report on Form 8-K dated July 6, 1999, in the form
attached hereto as Annex A-2.
(g) The Underwriters or the Representatives shall have received on the
Closing Date (i) 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 and (ii) from Locke Liddel & Sapp LLP, counsel for the
Underwriters, an opinion and letter dated the Closing Date, with respect
to the periodic reports of El Paso Energy Corporation included in the
Company's Current Report on Form 8-K dated July 6, 1999. 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."
All notices and communications hereunder to an Underwriter shall be
given to Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue,
New York, New York 10172.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
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,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CHASE SECURITIES INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:____________________________________
Name:
Title:
Accepted:
SONAT INC.
By:__________________________
Name:
Title:
<PAGE>
ANNEX A-1
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 (which, as to
paragraph (vii) below, may rely on the opinion of in-house counsel to the
Company) 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, constitutes 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
<PAGE>
Company entitled to the benefits of the Indenture, except as limited by general
equitable principles and by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights.
(v) The Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the Securities
Act or proceedings therefor instituted or threatened under the Securities Act by
the Securities and Exchange Commission.
(vi) The Registration Statement, and the Prospectus comply as to
form in all material respects with the requirements of the Securities Act, the
Trust Indenture Act of 1939, as amended, and the applicable Rules and
Regulations of the Securities and Exchange Commission thereunder (except for the
Statement of Eligibility of the Trustee on Form T-1, the financial statements
and notes thereto, related schedules and exhibits and other financial data
included in or omitted from the Registration Statement and other matters
referred to in the Prospectus under "Experts", as to which such counsel may
express no opinion).
(vii) No approval, authorization, consent or other order of any
public board or body (other than in connection or in compliance with the
provisions of the Federal securities laws or the securities or Blue Sky laws of
any State) is legally required for the issuance and sale by the Company of the
Purchased Securities.
(viii) The Underwriting Agreement has been duly authorized, executed
and delivered on behalf of the Company.
* * * * *
We have assumed the truth of information furnished to us and have
not independently verified and do not undertake any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus. We have, however, participated in
conferences with representatives of the Company, with your counsel and with your
representatives, at which conferences the contents of the Registration
Statement, the Prospectus and related matters were discussed. Our examination of
the Registration Statement and the Prospectus and participation in such
conferences have not led us to believe that the Registration Statement, when it
became effective, contained any untrue statement of a material fact or omitted
<PAGE>
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Basic Prospectus, as
supplemented by the Prospectus Supplement, contained, as of July 7, 1999, or
contains, as of the date hereof, any untrue statement of a material fact or
omitted, as of July 7, 1999, or omits, as of the date hereof to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that we do not express any comment with respect to the Statement of Eligibility
of the Trustee on Form T-1, the financial statements and notes thereto, related
schedules and exhibits and other financial data included in or omitted from the
Registration Statement or the Prospectus other matters referred to in the
Prospectus under the caption "Experts", Incorporated Documents filed with the
Securities and Exchange Commission prior to January 1, 1999 and the Company's
Current Report on Form 8-K dated July 6, 1999).
<PAGE>
ANNEX A-2
We have acted as counsel to El Paso Energy Corporation, a Delaware
corporation (the "Company"), in connection with the Company's preparation of
certain periodic reports listed below filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). In connection with the proposed merger of Sonat
Inc. ("Sonat") with and into the Company, it is our understanding that Sonat has
filed a Current Report on Form 8-K with the Commission on July 7, 1999 (the
"Sonat Form 8-K"), which included the following periodic reports filed pursuant
to the Exchange Act: (i) the Company's Annual Report on Form 10-K for the year
ended December 31, 1998, and (ii) the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999 (collectively, the "El Paso Reports"). We
are delivering this opinion to you pursuant to Section 5(f) of the Underwriting
Agreement Standard Provisions, dated July 7, 1999, among Sonat and the
underwriters named therein.
Subject to the qualifications and limitations set forth below, we
are of the opinion that:
Each El Paso Report (except for the financial statements and the
notes thereto and the schedules and other financial or statistical data included
or incorporated by reference therein or omitted therefrom, as to which we do not
express any opinion), when filed by the Company with the Commission pursuant to
the Exchange Act, appeared on its face to be approximately responsive in all
material respects as to form with the requirements of the Exchange Act.
In addition, in the course of the preparation by the Company of the
El Paso Reports, we have participated in conferences with certain of the
officers and representatives of the Company and the Company's independent
accountants at which the El Paso Reports have been discussed. We did not,
however, participate in the preparation of the Sonat Form 8-K. We are not
passing upon and do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the El Paso Reports or the Sonat Form
8-K and we have made no independent check or verification thereof. Subject to
the foregoing, no facts have come to our attention that have caused us to
believe that any El Paso Report, at the time such El Paso Report was filed by
the Company with the Commission, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
<PAGE>
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. We express no belief, however, with
respect to financial statements, schedules or notes thereto or other financial
or statistical data included in or omitted from any of the Exchange Act Reports.
With respect to any matters indicated herein to be limited to our
knowledge and information (or words to like effect), the opinions set forth
herein with respect to such matters are specifically limited to the actual
knowledge which attorneys who are members of or are employed by this firm have
obtained solely in connection with the representation of the Company with
respect to the preparation of the El Paso Reports and without any independent
investigation. Nothing has come to the attention of such attorneys to cause them
to believe that the statements made herein "to our knowledge" are false.
This opinion is limited in all respects to the federal laws of the
United States, the laws of the State of New York (other than municipal and local
ordinances and regulations), and the Delaware General Corporation Law (without
regard to the decisional case law of Delaware), is furnished by us as counsel
for the Company to the persons to whom this opinion is addressed, and may not be
relied upon by any other person or entity and may not be disclosed, quoted,
filed with a governmental agency or otherwise referred to without the prior
written consent of the undersigned. This opinion speaks as of its date, and we
undertake no (and hereby disclaim any) obligation to update this opinion.
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation, 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
Depository Trust Company), 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- $
CUSIP # 835415AJ9
SONAT INC.
7 5/8% Notes Due July 15, 2011
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 _____________
DOLLARS ($________) on July 15, 2011 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 7 5/8% per annum in like coin or currency, from July 12, 1999
or from the most recent January 15 or July 15, as the case may be (each,
an "Interest Payment Date"), to which interest has been paid or duly
provided for, semi-annually on January 15 and July 15 in each year,
commencing January 15, 2000 (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 July 12, 1999),
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 January 15 or July 15 will, subject to certain exceptions
provided in the Indenture, be paid to the person in whose name this
<PAGE>
permanent global Security (or one or more predecessor Securities) is
registered at the close of business on the January 1 or July 1, as the
case may be, next preceding such January 15 or July 15. As used 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"), formerly known as Chemical Bank, successor by merger to
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
7 5/8% Notes due July 15, 2011, herein referred to as the "Notes", limited
in aggregate principal amount to $600,000,000.
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 Securities registrar a written order of the Company
providing that this permanent global Security shall be so exchangeable, or
<PAGE>
(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
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
<PAGE>
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 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 of 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 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
<PAGE>
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.
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 global Security will be redeemable as a whole or in part,
at the option of the Company at any time, at a redemption price equal to
the greater of (i) 100% of the principal amount of the Securities to be
redeemed and (ii) the sum of the present values of the Remaining Scheduled
Payments (as hereinafter defined) thereon, discounted to the redemption
date on a semiannual basis (assuming a 360-day year consisting of twelve
<PAGE>
30-day months) at the Treasury Rate (as hereinafter defined) plus twenty
five basis points, plus in either case accrued interest on the principal
amount being redeemed to the redemption date.
"Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Securities to be redeemed that
would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of such
Securities. "Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Trustee after consultation with the
Company.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the arithmetic average of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) on the third business day preceding such
redemption date, as set forth in the daily statistical release (or any
successor release) published by the Federal Reserve Bank of New York and
designated "Composite 3:30 p.m. Quotations for U.S. Government Securities"
or (ii) if such release (or any successor release) is not published or
does not contain such prices on such business day, the arithmetic average
of the Reference Treasury Dealer Quotations for such redemption date.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the arithmetic average,
as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer by 5:00 p.m. on the third business day preceding such
redemption date.
"Reference Treasury Dealer" means each of Donaldson, Lufkin &
Jenrette Securities Corporation, Chase Securities Inc., Goldman, Sachs &
Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and their
respective successors; PROVIDED, HOWEVER, that if any of the foregoing
shall cease to be a primary U.S. Government securities dealer in New York
<PAGE>
City (a "Primary Treasury Dealer"), the Company shall substitute therefor
another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to any
Note, the remaining scheduled payments of the principal thereof to be
redeemed and interest thereon that would be due after the related
redemption date but for such redemption; PROVIDED, HOWEVER, that, if such
redemption date is not an interest payment date with respect to such Note,
the amount of the next succeeding scheduled interest payment thereon will
be reduced by the amount of interest accrued thereon to such redemption
date.
Notice of any redemption will be mailed at least 30 days but
not more than 60 days before the redemption date to each holder of
Securities to be redeemed.
Unless the Company defaults in payment of the redemption
price, on and after the redemption date interest will cease to accrue on
the Securities or portions thereof called for redemption.
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.
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).
<PAGE>
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:
SONAT INC.
By ___________________________________
Name:
Title:
ATTEST:
_____________________________
Assistant Secretary
<PAGE>
Certificate of Authentication
This is one of the 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.
