Exhibit 1.1
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SOUTHERN UNION COMPANY
(a Delaware corporation)
Debt Securities
PURCHASE AGREEMENT
Dated: October 27, 1999
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SOUTHERN UNION COMPANY
(a Delaware corporation)
Debt Securities
PURCHASE AGREEMENT
New York, New York
October 27, 1999
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
As Representatives of the Several Underwriters
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
From time to time, Southern Union Company, a Delaware corporation
(the "Company"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I
hereto, with such additions and deletions as the parties thereto
may determine, and, subject to the terms and conditions stated
herein and therein, to issue and sell to the Underwriters (as
hereinafter defined) certain of its debt securities specified in
Schedule II to the applicable Pricing Agreement (with respect to
such Pricing Agreement, the "Offered Securities") on the terms
and conditions stated herein and in such Pricing Agreement. The
Offered Securities will be issued pursuant to an indenture dated
as of January 31, 1994 (the "Indenture") between the Company and
The Chase Manhattan Bank, as trustee (the "Trustee"). As used
herein, unless the context otherwise requires, the term
"Underwriters" shall mean ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation ("DLJ"), ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Banc of America Securities LLC
("B of A"), Chase Securities Inc. ("Chase") and Credit Lyonnais
Securities (USA) Inc. ("Credit Lyonnais") and such other firm or
firms as may be named as Underwriter or Underwriters in Schedule
I to the applicable Pricing Agreement and the term "you" shall
mean the Underwriters, if no underwriting syndicate is purchasing
the Offered Securities, or DLJ, ▇▇▇▇▇▇▇ ▇▇▇▇▇, B of A, Chase and
Credit Lyonnais, as representatives of the Underwriters, if an
underwriting syndicate is purchasing the Offered Securities, as
indicated in Schedule I to the applicable Pricing Agreement.
The principal terms of the Offered Securities, including, without
limitation, the aggregate principal amount of the Offered Securi-
ties, the initial public offering price of such Offered Securi-
ties, the purchase price to the Underwriters of such Offered
Securities, the names of the Underwriters of such Offered Securi-
ties, the principal amount of such Offered Securities to be pur-
chased by the Underwriters, whether any of such Offered
Securities shall be covered by Delayed Delivery Contracts (as
defined in Section 2 hereof) and the commission payable to you
with respect thereto, along with the date, time and manner of
delivery of such Offered Securities and payment therefor shall be
agreed upon by the Company and you and such agreement shall be
set forth in the applicable Pricing Agreement. Notwithstanding
anything contained herein to the contrary, the obligation of the
Company to issue and sell any of the Offered Securities and each
Underwriter's obligation to purchase any of the Offered Securi-
ties shall be evidenced solely by the applicable Pricing Agree-
ment. The applicable Pricing Agreement shall also specify (to
the extent not set forth in the Registration Statement (as here-
inafter defined) and the Prospectus (as hereinafter defined)
included therein and the Indenture) the terms of the Offered
Securities. From and after the date of the execution and
delivery of the applicable Pricing Agreement, this Agreement
shall be deemed to incorporate, and all references herein to
"this Agreement" shall be deemed to include, the applicable
Pricing Agreement and the Schedules thereto.
The Company has filed with the Securities and Exchange Commission
(the "Commission") two registration statements on Form S-3
(Registration Nos. 333-87617 and 333-58297), including a
prospectus (and preliminary prospectus supplement), relating to
certain of its debt securities (including the Offered Securities)
and the offering thereof from time to time in accordance with
Rule 415 under the Securities Act of 1933, as amended (the "1933
Act"). Such registration statements have been declared effective
by the Commission. As provided in Section 3(a), a prospectus
supplement reflecting the terms of the Offered Securities, the
terms of the offering thereof and the other matters set forth
therein will be prepared and filed pursuant to Rule 424 under the
1933 Act. The preliminary prospectus supplement included in the
registration statements and such prospectus supplement, in the
form first filed after the date hereof pursuant to Rule 424, are
herein collectively referred to as the "Prospectus Supplement".
Such registration statements, including the exhibits thereto and
the documents incorporated by reference therein, as amended at
the time of execution of the applicable Pricing Agreement, are
herein collectively referred to as the "Registration Statement",
and the basic prospectus included therein relating to all
offerings of securities under the Registration Statement, as
supplemented by the Prospectus Supplement, is herein called the
"Prospectus", except that, if such basic prospectus is amended or
supplemented on or prior to the date on which the Prospectus
Supplement is first filed pursuant to Rule 424, the term
"Prospectus" shall refer to the basic prospectus as so amended or
supplemented and as supplemented by the Prospectus Supplement, in
either case including the documents filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"), that are incorporated by reference
therein.
All references in this Agreement to financial statements and
schedules and other information that is "disclosed," "contained,"
"included," "incorporated," "stated" or "given" in the Registra-
tion Statement or the Prospectus (or other references of like
import) shall be deemed to mean and include all such financial
statements and schedules and other information that are incorpo-
rated by reference in the Registration Statement or the
Prospectus.
Section 1. Representations and Warranties.
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(a) The Company represents and warrants to and agrees with each
Underwriter that:
(i) On the original effective date of each Registration
Statement, on the effective date of the most recent
post-effective amendment thereto, if any, and on the
date of the filing by the Company of any annual report
on Form 10-K after the original filing of each Regis-
tration Statement, the Registration Statement complied
in all material respects with the requirements of the
1933 Act and the rules and regulations of the Commis-
sion thereunder (the "1933 Act Regulations"), the Trust
Indenture Act of 1939, as amended (the "1939 Act"), and
the rules and regulations of the Commission under the
1939 Act (the "1939 Act Regulations") and did not con-
tain 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; on the date hereof, at the time of execu-
tion of the applicable Pricing Agreement and at the
Closing Time (as defined below), the Registration
Statement, and any amendments thereof, and the
Prospectus, and any amendments thereof and supplements
thereto, comply and will comply in all material
respects with the requirements of the 1933 Act, the
1933 Act Regulations, the 1939 Act and the 1939 Act
Regulations and none of such documents includes or will
include an untrue statement of a material fact or omits
or will omit to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading; provided, however, that the
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Company makes no representations or warranties as to
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by or on behalf of any Underwriter, directly or
through you, expressly for use in the Registration
Statement or the Prospectus. At the Closing Time, the
Designated Indenture (as defined below) will comply in
all material respects with the requirements of the 1939
Act and the 1939 Act Regulations.
(ii) The documents incorporated by reference in the
Prospectus, at the time they were filed with the Com-
mission, complied in all material respects with the
requirements of the 1934 Act, and the rules and regu-
lations of the Commission thereunder (the "1934 Act
Regulations") and, when read together with the other
information in the Prospectus, do not and will not, on
the date hereof, at the time of execution of the
applicable Pricing Agreement and at the Closing Time,
include 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.
(iii) PricewaterhouseCoopers LLP, who have reported upon the
audited financial statements and schedules of the Com-
pany and its subsidiaries and of PEI (as defined below)
and its subsidiaries that are included and incorporated
by reference in the Registration Statement, are inde-
pendent public accountants in respect of those reports
as required by the 1933 Act and the 1933 Act Regula-
tions. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have reported upon the
audited financial statements and schedules of PEI and
its subsidiaries that are included and incorporated by
reference in the Registration Statement, are indepen-
dent public accountants in respect of those reports as
required by the 1933 Act and the 1933 Act Regulations.
(iv) This Agreement has been and, at the Closing Time, each
applicable Pricing Agreement will have been, duly
authorized, executed and delivered by the Company.
(v) The consolidated financial statements included or
incorporated by reference in the Registration Statement
present fairly (a) the consolidated financial position
of (1) Pennsylvania Enterprises, Inc., a Pennsylvania
corporation ("PEI"), and its subsidiaries and (2) the
Company and its subsidiaries, in each case, as of the
dates indicated and (b) the consolidated results of
operations and the consolidated cash flows of (1) PEI
and its subsidiaries and (2) the Company and its
subsidiaries, in each such case, for the periods
specified, subject, in the case of unaudited financial
statements, to normal year-end adjustments which shall
not be materially adverse to the business or financial
condition or the earnings of (1) PEI and its subsidi-
aries considered as one enterprise or (2) the Company
and its subsidiaries considered as one enterprise, as
the case may be. Such financial statements have been
prepared in conformity with generally accepted
accounting principles applied on a consistent basis
throughout the periods involved. The financial state-
ment schedules, if any, included in the Registration
Statement present fairly the information required to be
stated therein. The selected financial data included
or incorporated by reference in the Prospectus present
fairly the information shown therein and have been com-
piled on a basis consistent with that of the audited
consolidated financial statements included or incorpo-
rated by reference in the Registration Statement. The
Prospectus contains all pro forma financial statements
and other pro forma financial information required to
be included therein and such information presents
fairly the information shown therein, have been pre-
pared in accordance with the Commission's rules and
guidelines with respect to pro forma financial state-
ments, have been properly compiled on the pro forma
bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions or
circumstances referred to therein.
(vi) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware with corporate power and authority
under such laws to own, lease and operate its
properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to trans-
act business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or
leases property of a nature, or transacts business of a
type, that would make such qualification necessary,
except to the extent that the failure to so qualify or
be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered
as one enterprise.
(vii) The Company's only active subsidiaries are Atlantic Gas
Corporation, ConTigo, Inc., Energia ▇▇▇▇▇▇▇▇ del Sur,
S. A. de C. V. ("Energia"), KellAir Aviation Company,
Lavaca Realty Company, ▇▇▇▇▇▇▇ Gas Services Inc.,
Norteno Pipeline Company, Southern Transmission Com-
pany, Southern Union Energy International, Inc.,
Southern Union Financing I, Southern Union Inter-
national Investments, Inc., Southern Union Total Energy
Systems, Inc. and SUPro Energy Company (collectively,
the "Subsidiaries"). Energia is not a "significant
subsidiary" as defined in Rule 1-02(w) of Regulation
S-X under the 1933 Act. Each Subsidiary is a corpora-
tion duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation with corporate power and authority under
such laws to own, lease and operate its properties and
conduct its business; and each Subsidiary is duly
qualified to transact business as a foreign corporation
and is in good standing in each other jurisdiction in
which it owns or leases property of a nature, or trans-
acts business of a type, that would make such qualifi-
cation necessary, except to the extent that the failure
to so qualify or be in good standing would not have a
material adverse effect on the Company and its subsidi-
aries, considered as one enterprise. All of the out-
standing shares of capital stock of each Subsidiary
have been duly authorized and validly issued and are
fully paid and non-assessable and are owned by the
Company free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any
kind.
(viii) The Indenture, each supplement thereto, if any, to the
date hereof and the supplement thereto or board resolu-
tion and officers' certificate setting forth the terms
of the Offered Securities (the Indenture, as so supple-
mented by such supplement or supplements or board
resolution and officers' certificate, being herein
referred to as the "Designated Indenture"), have been
duly authorized by the Company. The Indenture as exe-
cuted is in the form filed as an exhibit to the Regis-
tration Statement. The Designated Indenture, when duly
executed and delivered (to the extent required by the
Indenture) by the Company and the Trustee, will consti-
tute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganiza-
tion, moratorium or similar laws affecting enforcement
of creditors' rights generally and except as enforce-
ment thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law); and the Designated
Indenture conforms to the description thereof in the
Prospectus and has been duly qualified under the 1939
Act.
(ix) The Offered Securities have been duly authorized by the
Company. When executed, authenticated, issued and
delivered in the manner provided for in the Designated
Indenture and sold and paid for as provided herein and
in any applicable Pricing Agreement or in any Delayed
Delivery Contracts (as defined below), the Offered
Securities will constitute valid and binding obliga-
tions of the Company entitled to the benefits of the
Designated Indenture and enforceable against the Com-
pany in accordance with their terms, except as enforce-
ment thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or
at law); and the Offered Securities conform to the
description thereof in the Prospectus.
(x) In the event that any of the Offered Securities are
purchased pursuant to Delayed Delivery Contracts, each
of such Delayed Delivery Contracts has been duly autho-
rized by the Company and, when executed and delivered
on behalf of the Company and duly authorized, executed
and delivered on behalf of the purchaser thereunder,
will constitute a valid and binding obligation of the
Company enforceable against the Company in accordance
with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except
as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is con-
sidered in a proceeding in equity or at law).
(xi) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued
and are fully paid and non-assessable; no holder
thereof is or will be subject to personal liability by
reason of being such a holder; and none of the out-
standing shares of capital stock of the Company was
issued in violation of the preemptive rights of any
stockholder of the Company.
(xii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus,
except as otherwise stated therein or contemplated
thereby, there has not been (A) any material adverse
change in the condition (financial or otherwise),
earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enter-
prise, whether or not arising in the ordinary course of
business, or (B) any transaction entered into by the
Company or any subsidiary, other than in the ordinary
course of business, that is material to the Company and
its subsidiaries, considered as one enterprise.
(xiii) Neither the Company nor any Subsidiary is in default in
the performance or observance of any obligation, agree-
ment, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which it is a party or
by which it may be bound or to which any of its
properties may be subject, except for such defaults
that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise. The execu-
tion and delivery by the Company of this Agreement,
each applicable Pricing Agreement, the Designated In-
denture and any Delayed Delivery Contracts, the
issuance and delivery of the Offered Securities, the
consummation by the Company of the transactions con-
templated herein and in the Registration Statement and
compliance by the Company with the terms of this Agree-
ment, each applicable Pricing Agreement, the Designated
Indenture and any Delayed Delivery Contracts, have been
duly authorized by all necessary corporate action on
the part of the Company and do not and will not result
in any violation of the charter or by-laws of the Com-
pany or any Subsidiary, and do not and will not con-
flict with, or result in a breach of any of the terms
or provisions of, or constitute a default under, or
result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of
the Company or any Subsidiary under (A) any contract,
indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which the Company or
any Subsidiary is a party or by which it may be bound
or to which any of its properties may be subject (ex-
cept for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a material
adverse effect on the condition (financial or other-
wise), earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one
enterprise) or (B) any existing applicable law, rule,
regulation, judgment, order or decree of any govern-
ment, governmental instrumentality or court, domestic
or foreign, or any regulatory body or administrative
agency or other governmental body having jurisdiction
over the Company or any Subsidiary or any of their
respective properties.
(xiv) No authorization, approval, consent or license of any
government, governmental instrumentality or court,
domestic or foreign (other than under the 1933 Act, the
1939 Act, and the securities or blue sky laws of the
various states), is required for the valid authoriza-
tion, issuance, sale and delivery of the Offered
Securities or for the execution, delivery or per-
formance of the Designated Indenture by the Company,
except those authorizations, approvals, consents or
licenses described in the Prospectus and which have
been received, granted or waived prior to the sale and
delivery of the Offered Securities.
(xv) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government,
governmental instrumentality or court, domestic or
foreign, now pending or, to the knowledge of the Com-
pany, threatened against or affecting the Company or
any Subsidiary that is required to be disclosed in the
Prospectus or that could result in any material adverse
change in the condition (financial or otherwise),
earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enter-
prise, or that could materially and adversely affect
the properties or assets of the Company and its sub-
sidiaries, considered as one enterprise, or that could
adversely affect the consummation of the transactions
contemplated in this Agreement or any applicable
Pricing Agreement; the aggregate of all pending legal
or governmental proceedings that are not described in
the Prospectus to which the Company or any Subsidiary
is a party or which affect any of their respective
properties, including ordinary routine litigation inci-
dental to the business of the Company or any Subsidi-
ary, would not have a material adverse effect on the
condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise.
(xvi) There are no contracts or documents of a character
required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described and filed
as required.
(xvii) The Company has delivered to you a true and complete
copy of the Agreement of Merger by and between the Com-
pany and PEI, dated as of June 7, 1999, and the related
attachments and exhibits (the "PEI Agreements"), which
provide for the Company's acquisition of PEI by way of
merger (the "PEI Merger"). The Company is not in
default under the terms of such PEI Agreements and, to
the Company's knowledge, PEI is not in default under
the terms of such PEI Agreements in any respect that is
reasonably likely to result in the Company's failure to
consummate the acquisition contemplated by the PEI
Agreements on or before the close of business on the
seventh business day after the date of this Agreement;
all of the material conditions to which the PEI Merger
is subject have been, or prior to the Closing Time will
have been, fulfilled (including those relating to the
requisite stockholder approvals and applicable regula-
tory authorizations), and the Company is unaware of any
fact, circumstance or development, or lack of any of
the foregoing, that is reasonably likely to result in
the PEI Merger not being consummated in such time
frame.
(xviii) The Company has the requisite power and authority to
enter into the PEI Agreements and perform its obliga-
tions thereunder. The execution, delivery and per-
formance of the PEI Agreements by the Company have been
duly authorized by all necessary corporate action on
the part of the Company. The PEI Agreements have been
duly executed and delivered by the Company, are in full
force and effect and constitute the valid and binding
obligations of the parties thereto enforceable in
accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or
at law). None of the PEI Agreements has been amended
or modified in any material respect.
(xix) Except as contemplated by or otherwise disclosed in the
PEI Agreements:
(A) the execution and delivery by the Company of the
PEI Agreements and the consummation by the Company
of the transactions contemplated thereby do not
and will not result in any violation of the
charter or by-laws of the Company or any Sub-
sidiary, and do not and will not conflict with, or
result in a breach of any of the terms or provi-
sions of, or constitute a default under, or result
in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the
Company or any Subsidiary under (1) any contract,
indenture, mortgage, loan agreement, note, lease
or other agreement or instrument to which the
Company or any Subsidiary is a party or by which
it may be bound or to which any of its properties
may be subject or (2) any existing applicable law,
rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court,
domestic or foreign, or any regulatory body or
administrative agency or other governmental body
having jurisdiction over the Company or any Sub-
sidiary or any of their respective properties; and
(B) no authorization, approval, consent, license
order, certificate or permit of or from, or decla-
ration of filing with, any government, governmen-
tal instrumentality or court, domestic or foreign,
and no consent, approval or waiver of any party to
any agreement to which the Company or any Sub-
sidiary is subject, is required for the execution
and delivery of the PEI Agreements or the consum-
mation of the transactions contemplated thereby.
(xx) No action or proceeding has been instituted or
threatened before or by any government, government
instrumentality or court, domestic or foreign, to
restrict or prohibit any of the transactions con-
templated by the PEI Agreements.
(xxi) The Company and the Subsidiaries each has good and mar-
ketable title to all properties and assets described in
the Prospectus (including the documents incorporated by
reference therein) as owned by it, free and clear of
all liens, charges, encumbrances or restrictions, ex-
cept such as (A) are described in the Prospectus (in-
cluding the documents incorporated by reference
therein) or (B) are neither material in amount nor
materially significant in relation to the business of
the Company and its subsidiaries, considered as one
enterprise; all of the leases and subleases material to
the business of the Company and its subsidiaries, con-
sidered as one enterprise, and under which the Company
or any Subsidiary holds properties described in the
Prospectus, are in full force and effect, and neither
the Company nor any Subsidiary has any notice of any
material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any Sub-
sidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of such
corporation to the continued possession of the leased
or subleased premises under any such lease or sublease.
(xxii) The Company and the Subsidiaries each owns, possesses
or has obtained all material licenses, franchises, per-
mits, certificates, consents, orders, approvals and
other authorizations issued by the appropriate state,
federal or foreign regulatory agencies or bodies neces-
sary to own or lease, as the case may be, and to
operate its properties and to carry on its business as
presently conducted, and neither the Company nor any
Subsidiary has received any notice of proceedings
relating to revocation or modification of any such
licenses, franchises, permits, certificates, consents,
orders, approvals or authorizations.
(xxiii) The Company and the Subsidiaries each owns or
possesses, or can acquire on reasonable terms, adequate
patents, patent licenses, trademarks, service marks and
trade names necessary to carry on its business as
presently conducted, and neither the Company nor any
Subsidiary has received any notice of infringement of
or conflict with asserted rights of others with respect
to any patents, patent licenses, trademarks, service
marks or trade names that in the aggregate, if the
subject of an unfavorable decision, ruling or finding,
could materially adversely affect the condition
(financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries,
considered as one enterprise.
(xxiv) To the best knowledge of the Company, no labor problem
exists with its employees or with employees of the Sub-
sidiaries or is imminent that could adversely affect
the Company and its subsidiaries, considered as one
enterprise, and the Company is not aware of any
existing or imminent labor disturbance by the employees
of any of its or the Subsidiaries' principal suppliers,
contractors or customers that could be expected to
materially adversely affect the condition (financial or
otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, con-
sidered as one enterprise.
(xxv) The Company has not taken and will not take, directly
or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabiliza-
tion or manipulation of the price of the Offered
Securities.
(xxvi) Except as disclosed in the Registration Statement and
except as would not individually or in the aggregate
have a material adverse effect on the condition (▇▇▇▇▇-
cial or otherwise), earnings, business affairs or busi-
ness prospects of the Company and its subsidiaries,
considered as one enterprise, (A) the Company and the
Subsidiaries are each in compliance with all applicable
Environmental Laws, (B) the Company and the Subsidi-
aries have all permits, authorizations and approvals
required under any applicable Environmental Laws and
are each in compliance with their requirements, (C)
there are no pending or threatened Environmental Claims
against the Company or any of the Subsidiaries, and (D)
there are no circumstances with respect to any property
or operations of the Company or the Subsidiaries that
could reasonably be anticipated to form the basis of an
Environmental Claim against the Company or the
Subsidiaries.
For purposes of this Agreement, the following terms
shall have the following meanings: "Environmental Law"
means any United States (or other applicable jurisdic-
tion's) federal, state, local or municipal statute,
law, rule, regulation, ordinance, code, policy or rule
of common law and any judicial or administrative inter-
pretation thereof including any judicial or administra-
tive order, consent decree or judgment, relating to the
environment, health, safety or any chemical, material
or substance, exposure to which is prohibited, limited
or regulated by any governmental authority. "Environ-
mental Claims" means any and all administrative, regu-
latory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or
violation, investigations or proceedings relating in
any way to any Environmental Law.
(xxvii) The Company, through its operating divisions Southern
Union Gas, Missouri Gas Energy and South Florida
Natural Gas, provides gas distribution utility services
which are subject to regulation by the Railroad Commis-
sion of the State of Texas, the Missouri Public Service
Commission, the Florida Public Service Commission, and
with respect to rates and certain other matters, by
various municipalities served by the Company. The Com-
pany is also subject to regulation by the Federal
Department of Transportation with respect to pipeline
safety. The Company's operations are not subject to
regulation by the Securities and Exchange Commission
under the Public Utility Holding Company Act of 1935,
as amended ("PUCHA"). Except with respect to the
transportation of gas on a no-fee exchange basis which
is the subject of a limited jurisdiction certificate
granted on January 12, 1994 (Docket No. CP93-750-000)
and the operation of the Company's subsidiary, Norteno
Pipeline Company, the Company's operations are not sub-
ject to the jurisdiction of the Federal Energy Regula-
tory Commission, the Federal Energy Administration, or,
except as set forth above, any other regulatory autho-
rity having jurisdiction over utilities or utility
related matters.
(xxviii) The Company and the Subsidiaries have filed all
material federal, state and local tax returns and other
reports which have been required to be filed and have
paid all taxes and fees indicated by said returns and
reports and franchise reports and all assessments
received by them or any of them to the extent that such
taxes and/or fees have become due, except where being
contested in good faith and for which the Company has
established adequate reserves.
(b) Any certificate signed by any officer of the Company or any
Subsidiary and delivered to you or to counsel for the Under-
writers in connection with the offering of the Offered
Securities shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered
thereby.
Section 2. Purchase and Sale.
-----------------
(a) On the basis of the representations and warranties contained
herein and in the applicable Pricing Agreement, and subject
to the terms and conditions set forth herein and in the
applicable Pricing Agreement, the Company agrees to sell to
each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the purchase
price to the Underwriters set forth in the applicable
Pricing Agreement, the principal amount of Offered Securi-
ties set forth opposite the name of such Underwriter in
Schedule I thereto.
(b) Payment of the purchase price for, and delivery of, the
Offered Securities shall be made at the date, time and
location specified in the applicable Pricing Agreement, or
at such other date, time or location as shall be agreed upon
by the Company and you, or as shall otherwise be provided in
Section 10 (such date and time of payment and delivery with
respect to such Pricing Agreement being herein called the
"Closing Time"). Unless otherwise specified in the applica-
ble Pricing Agreement, payment shall be made to the Company
by you hereunder by wire transfer of immediately available
funds to a bank account designated by the Company, against
delivery to you for the respective accounts of the several
Underwriters of the Offered Securities. Such Offered Secur-
ities shall be in such authorized denominations and regis-
tered in such names as you may request in writing at least
two full business days before the Closing Time. Such
Offered Securities, which may be in temporary form, will be
made available in New York City for examination and
packaging by you not later than 10:00 A.M. on the business
day prior to the Closing Time.
(c) If specified in the applicable Pricing Agreement, the Under-
writers may solicit offers to purchase Offered Securities
from the Company pursuant to delayed delivery contracts
("Delayed Delivery Contracts") substantially in the form of
Annex II with such changes therein as the Company may
approve. Any Delayed Delivery Contracts are to be with
institutional investors of the types set forth in the
Prospectus. At the Closing Time, the Company will enter
into Delayed Delivery Contracts (for the minimum principal
amount of Offered Securities per Delayed Delivery Contract
specified in the applicable Pricing Agreement) with all
purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an
aggregate principal amount of Offered Securities less than
or greater than the minimum and maximum aggregate principal
amounts specified in the applicable Pricing Agreement. The
Underwriters will not have any responsibility for the
validity or performance of Delayed Delivery Contracts.
(d) You are to submit to the Company, at least three business
days prior to the Closing Time, the names of any institu-
tional investors with which it is proposed that the Company
enter into Delayed Delivery Contracts, the principal amount
of Offered Securities to be purchased by each of them and
the date of delivery thereof, and the Company will advise
you, at least two business days prior to the Closing Time,
of the names of the institutions with which the making of
Delayed Delivery Contracts is approved by the Company and
the principal amount of Offered Securities to be covered by
each such Delayed Delivery Contract.
(e) As compensation for arranging Delayed Delivery Contracts,
the Company will pay (by certified or official bank check in
New York Clearing House funds) to you at the Closing Time,
for the accounts of the Underwriters, a fee equal to that
percentage of the principal amount of Offered Securities for
which Delayed Delivery Contracts are made at the Closing
Time as is specified in the applicable Pricing Agreement or
the amount of such fee may be deducted from the check
delivered pursuant to Section 2(b).
(f) The principal amount of Offered Securities agreed to be pur-
chased by each Underwriter shall be reduced by the principal
amount of Offered Securities covered by Delayed Delivery
Contracts, as to such Underwriter as set forth in a notice
delivered by you to the Company; provided, however, that the
-------- -------
total principal amount of Offered Securities to be purchased
by all Underwriters shall be the principal amount of Offered
Securities covered by this Agreement, less the principal
amount of Offered Securities covered by all Delayed Delivery
Contracts.
Section 3. Certain Covenants of the Company. The Company
--------------------------------
covenants with each Underwriter as follows:
(a) If reasonably requested by you in connection with the
offering of the Offered Securities, the Company will prepare
a preliminary prospectus supplement containing such informa-
tion as you and the Company deem appropriate, and, immedi-
ately following the execution of the applicable Pricing
Agreement, the Company will prepare a Prospectus Supplement
that complies with the 1933 Act and the 1933 Act Regulations
and that sets forth the principal amount of the Offered
Securities and their terms not otherwise specified in the
Indenture, the name of each Underwriter participating in the
offering and the principal amount of the Offered Securities
that each severally has agreed to purchase, the name of each
Underwriter, if any, acting as representative of the Under-
writers in connection with the offering, the price at which
the Offered Securities are to be purchased by the Under-
writers from the Company, any initial public offering price,
any selling concession and reallowance and any delayed
delivery arrangements, and such other information as you and
the Company deem appropriate in connection with the offering
of the Offered Securities. The Company will promptly trans-
mit copies of the Prospectus Supplement to the Commission
for filing pursuant to Rule 424 under the 1933 Act and will
furnish to the Underwriters as many copies of any prelimi-
nary prospectus supplement and the Prospectus as you shall
reasonably request.
(b) If at any time when the Prospectus is required by the 1933
Act to be delivered in connection with sales of the Offered
Securities any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel
for the Underwriters or counsel for the Company, to amend
the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if
it shall be necessary, in the opinion of either such
counsel, at any such time to amend the Registration State-
ment or amend or supplement the Prospectus in order to com-
ply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(d), such amendment or
supplement as may be necessary to correct such untrue state-
ment or omission or to make the Registration Statement or
the Prospectus comply with such requirements.
(c) During the period when the Prospectus is required by the
1933 Act to be delivered in connection with sales of the
Offered Securities, the Company will, subject to Section
3(d), file promptly all documents required to be filed with
the Commission pursuant to Section 13, 14 or 15(d) of the
1934 Act.
(d) During the period when the Prospectus is required by the
1933 Act to be delivered in connection with sales of the
Offered Securities, the Company will inform you of its
intention to file any amendment to the Registration State-
ment, any supplement to the Prospectus or any document that
would as a result thereof be incorporated by reference in
the Prospectus; will furnish you with copies of any such
amendment, supplement or other document a reasonable time in
advance of filing; and will not file any such amendment,
supplement or other document in a form to which you or your
counsel shall reasonably object.
(e) During the period when the Prospectus is required by the
1933 Act to be delivered in connection with sales of the
Offered Securities, the Company will notify you immediately,
and confirm the notice in writing, (i) of the effectiveness
of any amendment to the Registration Statement, (ii) of the
mailing or the delivery to the Commission for filing of any
supplement to the Prospectus or any document that would as a
result thereof be incorporated by reference in the
Prospectus, (iii) of the receipt of any comments from the
Commission with respect to the Registration Statement, the
Prospectus or the Prospectus Supplement, (iv) of any request
by the Commission for any amendment to the Registration
Statement or any supplement to the Prospectus or for addi-
tional information relating thereto or to any document
incorporated by reference in the Prospectus and (v) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspen-
sion of the qualification of the Offered Securities for
offering or sale in any jurisdiction, or of the institution
or threatening of any proceeding for any of such purposes.
The Company will use every reasonable effort to prevent the
issuance of any such stop order or of any order suspending
such qualification and, if any such order is issued, to
obtain the lifting thereof at the earliest possible moment.
(f) The Company has furnished or will furnish to you as many
signed copies of the Registration Statement (as originally
filed) and of all amendments thereto, whether filed before
or after the Registration Statement became effective, copies
of all exhibits and documents filed therewith or incorpo-
rated by reference therein (through the end of the period
when the Prospectus is required by the 1933 Act to be de-
livered in connection with sales of the Offered Securities)
and signed copies of all consents and certificates of
experts, as you may reasonably request, and has furnished or
will furnish to you, for each of the Underwriters, one con-
formed copy of the Registration Statement (as originally
filed) and of each amendment thereto (including documents
incorporated by reference into the Prospectus but without
exhibits).
(g) The Company will use its best efforts, in cooperation with
the Underwriters, to qualify the Offered Securities for
offering and sale under the applicable securities laws of
such states and other jurisdictions as you may designate and
to maintain such qualifications in effect for a period of
not less than one year from the date hereof; provided,
--------
however, that the Company shall not be obligated to file any
-------
general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The
Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the
Offered Securities have been qualified as above provided.
The Company will also supply you with such information as is
necessary for the determination of the legality of the
Offered Securities for investment under the laws of such
jurisdictions as you may request.
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 45 days
after the close of the period covered thereby, an earning
statement of the Company (in form complying with the provi-
sions of Rule 158 of the 1933 Act Regulations), covering (i)
a period of 12 months beginning after the effective date of
the Registration Statement and covering a period of 12
months beginning after the effective date of any post-
effective amendment to the Registration Statement but not
later than the first day of the Company's fiscal quarter
next following such respective effective dates and (ii) a
period of 12 months beginning after the date of this
Agreement but not later than the first day of the Company's
fiscal quarter next following the date of this Agreement.
(i) If and to the extent specified in the applicable Pricing
Agreement, the Company will use its best efforts to cause
the Offered Securities to be duly authorized for listing on
the New York Stock Exchange and to be registered under the
1934 Act.
(j) For a period of five years after the Closing Time, the Com-
pany will furnish to you and, upon request, to each Under-
writer, copies of all annual reports, quarterly reports and
current reports filed with the Commission on Forms 10-K,
l0-Q and 8-K, or such other similar forms as may be desig-
nated by the Commission, and such other documents, reports
and information as shall be furnished by the Company to its
stockholders or security holders generally.
(k) Between the date of the applicable Pricing Agreement and the
Closing Time or such other date as may be specified in such
Pricing Agreement, the Company will not, without your prior
consent, offer or sell, or enter into any agreement to sell,
any debt securities issued or guaranteed by the Company with
a maturity of more than one year in any public offering
(other than the Offered Securities and excluding the trans-
actions contemplated by the Solicitation Agent Agreement,
dated as of October 8, 1999, among ▇▇▇▇▇▇▇ ▇▇▇▇▇, the Com-
pany and PEI). This limitation is not applicable to the
public offering of tax exempt securities guaranteed by the
Company or to such other public offering of long-term debt
as may be specified in Schedule II.
(l) The Company has complied and will comply with all the provi-
sions of Florida H.B. 1771, codified as Section 517.075 of
the Florida statutes, and all regulations promulgated there-
under relating to issuers doing business in Cuba.
Section 4. Payment of Expenses. The Company will pay and bear
-------------------
all costs and expenses incident to the performance of its obliga-
tions under this Agreement, including (a) the preparation,
printing and filing of the Registration Statement (including
financial statements and exhibits), as originally filed and as
amended, any preliminary prospectus supplements and the
Prospectus and any amendments or supplements thereto, and the
cost of furnishing copies thereof to the Underwriters, (b) the
preparation, printing and distribution of this Agreement, the
Designated Indenture, the Offered Securities, any Pricing Agree-
ment, any Delayed Delivery Contracts, the blue sky survey, if
any, and any legal investment survey, if applicable, (c) the
delivery of the Offered Securities to the Underwriters, (d) the
fees and disbursements of the Company's counsel and accountants,
(e) the qualification of the Offered Securities under the appli-
cable securities laws in accordance with Section 3(g) and any
filing for review of the offering with the National Association
of Securities Dealers, Inc., including filing fees and fees and
disbursements of counsel for the Underwriters in connection
therewith and in connection with the blue sky survey, if any, and
any legal investment survey, if applicable, (f) any fees charged
by rating agencies for rating the Offered Securities, (g) any
listing fees and expenses incurred in connection with listing the
Offered Securities on the New York Stock Exchange and (h) the
fees and expenses of the Trustee, including the fees and dis-
bursements of counsel for the Trustee, in connection with the
Designated Indenture and the Offered Securities.
If this Agreement is terminated by you in accordance with the
provisions of Section 5 or 9(a)(i), the Company shall reimburse
the Underwriters for all their out-of-pocket expenses, including
the fees and disbursements of counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. Except as
---------------------------------------
otherwise provided in the Pricing Agreement, the obligations of
the Underwriters to purchase and pay for the Offered Securities
pursuant to this Agreement are subject to the accuracy of the
representations and warranties of the Company contained herein or
in certificates of any officer of the Company or any Subsidiary
delivered pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder, and to the following
further conditions:
(a) At the Closing Time, no stop order suspending the effective-
ness of the Registration Statement shall have been issued
under the 1933 Act and no proceedings for that purpose shall
have been instituted or shall be pending or, to your
knowledge or the knowledge of the Company, shall be contem-
plated by the Commission, and any request on the part of the
Commission for additional information shall have been com-
plied with to the satisfaction of counsel for the Under-
writers.
(b) At the Closing Time, you shall have received a signed
opinion of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, L.L.P., counsel for the
Company, dated as of the Closing Time, together with signed
or reproduced copies of such opinion for each of the other
Underwriters, in form and substance satisfactory to counsel
for the Underwriters, to the effect that:
(i) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws
of the State of Delaware with corporate power and
authority under such laws to own, lease and operate
its properties and conduct its business as described
in the Prospectus.
(ii) The Company is duly qualified to transact business
as a foreign corporation and is in good standing in
each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a
type, that would make such qualification necessary,
except to the extent that the failure to so qualify
or be in good standing would not have a material
adverse effect on the Company and its subsidiaries,
considered as one enterprise.
(iii) Each Subsidiary (other than Energia) is a corpora-
tion duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation with corporate power and authority
under such laws to own, lease and operate its
properties and conduct its business.
(iv) Each Subsidiary (other than Energia) is duly quali-
fied to transact business as a foreign corporation
and is in good standing in each other jurisdiction
in which it owns or leases property of a nature, or
transacts business of a type, that would make such
qualification necessary, except to the extent that
the failure to so qualify or be in good standing
would not have a material adverse effect on the
Company and its subsidiaries, considered as one
enterprise.
(v) All of the outstanding shares of capital stock of
the Company have been duly authorized and validly
issued and are fully paid and non-assessable, and no
holder thereof is or will be subject to personal
liability by reason of being such a holder; and none
of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive
rights of any stockholder of the Company.
(vi) All of the outstanding shares of capital stock of
each Subsidiary (other than Energia) have been duly
authorized and validly issued and are fully paid and
non-assessable; all of such shares are owned by the
Company free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of
any kind; no holder thereof is subject to personal
liability by reason of being such a holder and none
of such shares was issued in violation of the pre-
emptive rights of any stockholder of the Subsidi-
aries (other than Energia).
(vii) The Designated Indenture has been duly authorized,
executed and delivered by the Company and, assuming
the due authorization, execution and delivery by the
Trustee, constitutes a valid and binding obligation
of the Company, enforceable against the Company in
accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof
is subject to general principles of equity (regard-
less of whether enforcement is considered in a pro-
ceeding in equity or at law).
(viii) The Offered Securities have been duly authorized by
the Company and, assuming that the Offered Securi-
ties have been duly authenticated by the Trustee in
the manner described in its certificate delivered to
you today (which fact such counsel need not deter-
mine by an inspection of the Offered Securities),
the Offered Securities have been duly executed,
issued and delivered by the Company and constitute
or, in the case of Offered Securities, if any, to be
delivered pursuant to Delayed Delivery Contracts,
when duly executed and authenticated as provided in
the Designated Indenture and issued, delivered and
paid for in accordance with such Delayed Delivery
Contracts, will constitute, valid and binding obli-
gations of the Company entitled to the benefits of
the Designated Indenture and enforceable against the
Company in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforce-
ment thereof is subject to general principles of
equity (regardless of whether enforcement is con-
sidered in a proceeding in equity or at law).
(ix) In the event that any of the Offered Securities are
to be purchased pursuant to Delayed Delivery Con-
tracts, each Delayed Delivery Contract that has been
executed by the Company has been duly authorized,
executed and delivered by the Company and, assuming
the due authorization, execution and delivery by the
purchaser thereunder, is a valid and binding obliga-
tion of the Company enforceable against the Company
in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof
is subject to general principles of equity (regard-
less of whether enforcement is considered in a pro-
ceeding in equity or at law).
(x) The Designated Indenture has been duly qualified
under the 1939 Act.
(xi) The Offered Securities and the Designated Indenture
conform in all material respects as to legal matters
to the descriptions thereof in the Prospectus.
(xii) This Agreement and each applicable Pricing Agreement
has been duly authorized, executed and delivered by
the Company.
(xiii) No authorization, approval, consent or license of
any government, governmental instrumentality or
court, domestic or foreign, or regulatory authority
(other than under the 1933 Act, the 1939 Act, and
the securities or blue sky laws of the various
states), is required for the valid authorization,
issuance, sale and delivery of the Offered Securi-
ties, except for those authorizations, approvals,
consents or licenses that have been obtained prior
to the date hereof and copies of which have been
provided to you.
(xiv) Such counsel does not know of any statutes or regu-
lations, or any pending or threatened legal or
governmental proceedings, required to be described
in the Registration Statement or the Prospectus that
are not described as required, nor of any contracts
or documents of a character required to be described
or referred to in the Registration Statement or the
Prospectus or to be filed as exhibits to the Regis-
tration Statement that are not described, referred
to or filed as required.
(xv) The descriptions contained in the Prospectus of the
statutes, regulations, legal or governmental pro-
ceedings, contracts and other documents therein
described are accurate and fairly summarize the
information required to be shown.
(xvi) To the knowledge of such counsel, no default exists
in the performance or observance of any material
obligation, agreement, covenant or condition con-
tained in any contract, indenture, loan agreement,
note, lease or other agreement or instrument that is
described or referred to in the Registration State-
ment or the Prospectus or filed as an exhibit to the
Registration Statement.
(xvii) The execution and delivery by the Company of this
Agreement, each applicable Pricing Agreement, the
Designated Indenture and any Delayed Delivery Con-
tracts, the issuance and delivery of the Offered
Securities, the consummation by the Company of the
transactions contemplated herein and in the Regis-
tration Statement and compliance by the Company with
the terms of this Agreement, each applicable Pricing
Agreement and the Designated Indenture do not and
will not result in any violation of the charter or
by-laws of the Company or any Subsidiary (other than
Energia), and do not and will not conflict with, or
result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encum-
brance upon any property or assets of the Company or
any Subsidiary (other than Energia) under (A) any
contract, indenture, mortgage, loan agreement, note,
lease or any other agreement or instrument known to
such counsel, to which the Company or any Subsidiary
(other than Energia) is a party or by which it may
be bound or to which any of its properties may be
subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that
would not have a material adverse effect on the
condition (financial or otherwise), earnings, busi-
ness affairs or business prospects of the Company
and its subsidiaries, considered as one enterprise),
(B) any existing applicable law, rule or regulation
(other than the securities or blue sky laws of the
various states, as to which such counsel need
express no opinion), or (C) any judgment, order or
decree of any government, governmental instru-
mentality or court, domestic or foreign, or any
regulatory body or administrative agency or other
governmental body having jurisdiction over the
Company or any Subsidiary (other than Energia) or
any of their respective properties.
(xviii) The Registration Statement became effective under
the 1933 Act and, to the best of such counsel's
knowledge, the Registration Statement is still
effective, no stop order suspending the effective-
ness of the Registration Statement has been issued
and no proceedings for that purpose have been
instituted or are pending or are contemplated under
the 1933 Act.
(xix) The Registration Statement and the Prospectus,
excluding the documents incorporated by reference
therein, and each amendment or supplement thereto
(except for the financial statements and other
financial or statistical data included therein or
omitted therefrom, as to which such counsel need
express no opinion), as of their respective
effective or issue dates, appear on their face to
have been appropriately responsive in all material
respects to the requirements of the 1933 Act and the
1933 Act Regulations, and the Designated Indenture
and the Statement of Eligibility of the Trustee on
Form T-1 filed with the Commission as part of the
Registration Statement appear on their face to have
been appropriately responsive in all material
respects to the requirements of the 1939 Act and the
1939 Act Regulations.
(xx) The documents incorporated by reference in the
Prospectus (except for the financial statements and
other financial or statistical data included therein
or omitted therefrom, as to which such counsel need
express no opinion), as of the dates they were filed
with the Commission, appear on their face to have
been appropriately responsive in all material
respects to the requirements of the 1934 Act and the
1934 Act Regulations.
(xxi) The Company is not a "holding company" or an
"affiliate" or "subsidiary company" of a "registered
holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(xxii) The Company and the Subsidiaries (other than
Energia) each owns, possesses or has obtained all
material licenses, franchises, permits, certifi-
▇▇▇▇▇, consents, orders, approvals and other
authorizations issued by the appropriate local,
state, federal or foreign regulatory agencies or
bodies necessary both to own or lease, as the case
may be, and to operate its properties and to carry
on its business as described in the Registration
Statement, and such licenses, franchises, permits,
certificates, consents, orders, approvals and other
authorizations are in full force and effect.
Such counsel shall also state that they have participated in
the preparation of the Registration Statement and the
Prospectus and are familiar with or have participated in the
preparation of the documents incorporated by reference
therein and, although such counsel does not undertake to
determine independently or pass on or assume responsibility
for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus (ex-
cept as set forth in paragraphs (xi) and (xv)), no facts
have come to the attention of such counsel to lead them to
believe (A) that the Registration Statement or any amendment
thereto (except for the financial statements and other
financial or statistical data included therein or omitted
therefrom and the Statement of Eligibility of the Trustee on
Form T-l, as to which such counsel need express no opinion),
on the original effective date of the Registration State-
ment, on the effective date of the most recent post-
effective amendment thereto, if any, on the date of the
filing of any annual report on Form 10-K after the filing of
the Registration Statement or on the date of any applicable
Pricing Agreement contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading, (B) that the Prospectus or any
amendment or supplement thereto (except for the financial
statements and other financial or statistical data included
therein or omitted therefrom, as to which such counsel need
express no opinion), at the time the Prospectus Supplement
was issued, at the time any such amended or supplemented
Prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading or (C) that the
documents incorporated by reference in the Prospectus
(except for the financial statements and other financial or
statistical data included therein or omitted therefrom, as
to which such counsel need express no opinion), as of the
dates they were filed with the Commission, contained an
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading.
Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale
of the Offered Securities hereunder as counsel for the
Underwriters may reasonably request. In giving such
opinion, such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the Dis-
trict of Columbia, the federal law of the United States and
the General Corporation Law of the State of Delaware, upon
opinions of other counsel, who shall be counsel satisfactory
to counsel for the Underwriters, in which case the opinion
shall state that they believe you and they are entitled to
so rely. In rendering the opinions required by paragraphs
(vii), (viii) and (ix), such counsel may assume that the
laws of the State of New York are in effect substantially
identical to the laws of the District of Columbia with
respect to the matters covered by such opinions. Such
counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent
they deem proper, upon representations of officers of the
Company and certificates of public officials; provided that
any such certificates have been delivered to the Under-
writers.
(c) At the Closing Time, you shall have received the favorable
opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel for the
Underwriters, dated as of the Closing Time, together with
signed or reproduced copies of such opinion for each of the
other Underwriters, to the effect that the opinion delivered
pursuant to Section 5(b) appears on its face to be approxi-
ately responsive to the requirements of this Agreement
except, specifying the same, to the extent waived by you,
and with respect to the incorporation and legal existence of
the Company, the Offered Securities, this Agreement, any
applicable Pricing Agreement, the Designated Indenture, the
Registration Statement, the Prospectus, the documents incor-
porated by reference and such other related matters as you
may require. In giving such opinion such counsel may rely,
as to all matters governed by the laws of jurisdictions
other than the law of the State of New York, the federal law
of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory
to you. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of
the Company and certificates of public officials; provided
that such certificates have been delivered to the
Underwriters.
(d) At the Closing Time, (i) the Registration Statement and the
Prospectus, as they may then be amended or supplemented,
shall contain all statements that are required to be stated
therein under the 1933 Act and the 1933 Act Regulations and
in all material respects shall conform to the requirements
of the 1933 Act and the 1933 Act Regulations and the 1939
Act and the 1939 Act Regulations, and neither the Registra-
tion Statement nor the Prospectus, as they may then be
amended or supplemented, shall 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, (ii) there shall not have been,
since the respective dates as of which information is given
in the Registration Statement, any material adverse change
in the condition (financial or otherwise), earnings, busi-
ness affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business, (iii) no action,
suit or proceeding shall be pending or, to the knowledge of
the Company, threatened against the Company or any Subsidi-
ary that would be required to be set forth in the Prospectus
other than as set forth therein and no proceedings shall be
pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary before or by any
government, governmental instrumentality or court, domestic
or foreign, or any regulatory body or administrative agency
or other governmental body that could result in any material
adverse change in the condition (financial or otherwise),
earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise,
other than as set forth in the Prospectus, (iv) the Company
shall have complied with all agreements and satisfied all
conditions on its part to be performed and satisfied at or
prior to the Closing Time and (v) the other representations
and warranties of the Company set forth in Section 1(a)
shall be accurate as though expressly made at and as of the
Closing Time. At the Closing Time, you shall have received
a certificate of the President or a Vice President, and the
Treasurer or Controller, of the Company, dated as of the
Closing Time, to such effect.
(e) At the time of execution of the applicable Pricing Agree-
ment, you shall have received the "comfort" letters speci-
fied in Sections A(l) and B(l) of Annex III hereto and, at
the Closing Time, you shall have received the updates to
those comfort letters specified in Sections A(2) and B(2)
of Annex III hereto.
(f) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Time, there shall not have been any
downgrading, nor any notice given of any intended or poten-
tial downgrading or of a possible change that does not indi-
cate the direction of the possible change, in the rating
accorded any of the Company's securities, including the
Offered Securities, by any "nationally recognized statisti-
cal rating organization," as such term is defined for pur-
poses of Rule 436(g)(2) under the 1933 Act.
(g) At the Closing Time, counsel for the Underwriters shall have
been furnished with all such documents, certificates and
opinions as they may request for the purpose of enabling
them to pass upon the issuance and sale of the Offered
Securities as herein contemplated and the matters referred
to in Section 5(c) and in order to evidence the accuracy and
completeness of any of the representations, warranties or
statements of the Company, the performance of any of the
covenants of the Company, or the fulfillment of any of the
conditions herein contained; and all proceedings taken by
the Company at or prior to the Closing Time in connection
with the authorization, issuance and sale of the Offered
Securities as herein contemplated shall be satisfactory in
form and substance to the Underwriters and to counsel for
the Underwriters.
(h) If the Offered Securities are to be listed pursuant to the
applicable Pricing Agreement, the Offered Securities shall
have been duly authorized for listing by the New York Stock
Exchange subject only to official notice of issuance thereof
and notice of a satisfactory distribution of the Offered
Securities.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement and
any applicable Pricing Agreement, this Agreement may be termi-
nated by you on notice to the Company at any time at or prior to
the Closing Time, and such termination shall be without liability
of any party to any other party, except as provided in Section 4.
Notwithstanding any such termination, the provisions of Sections
6, 7 and 8 shall remain in effect.
Section 6. 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 1933 Act
as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of
an untrue statement or alleged untrue statement of a
material fact contained in the Registration State-
ment (or any amendment thereto) and all documents
incorporated therein by reference, or the omission
or alleged omission therefrom of a material fact
required to be stated therein or necessary to make
the statements therein not misleading or arising out
of an untrue statement or alleged untrue statement
of a material fact included in any preliminary
prospectus supplement or the Prospectus (or any
amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact neces-
sary in order to make the statements therein, in the
light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent
of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any
governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such
alleged untrue statement or omission, if such
settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred
(including fees and disbursements of counsel chosen
by you), reasonably incurred in investigating, pre-
paring or defending against any litigation, or in-
vestigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim what-
soever based upon any such untrue statement or
omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not
paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not
-------- -------
apply to any loss, liability, claim, damage or expense to
the extent arising out of an untrue statement or omission or
alleged untrue statement or omission made in reliance upon
and in conformity with written information furnished to the
Company by any Underwriter through you expressly for use in
the Registration Statement (or any amendment thereto), or
any preliminary prospectus supplement or the Prospectus (or
any amendment or supplement thereto); and provided further,
-------- -------
however, that this indemnity, as to any preliminary
-------
prospectus supplement, shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on
account of any loss, claim, damage, liability or litigation
arising from the sale of Offered Securities to any person by
such Underwriter if such Underwriter failed to send or give
a copy of the Prospectus, as the same may be supplemented or
amended, excluding documents incorporated by reference, to
such person within the time required by the 1933 Act, and
the untrue statement or alleged untrue statement or omission
or alleged omission of a material fact in such preliminary
prospectus supplement was corrected in the Prospectus,
unless such failure resulted from noncompliance by the
Company with Section 3(a).
Insofar as this indemnity agreement may permit indemnifica-
tion for liabilities under the 1933 Act of any person who is
a partner of an Underwriter or who controls an Underwriter
within the meaning of Section 15 of the 1933 Act and who, at
the date of this Agreement, is a director or officer of the
Company or controls the Company within the meaning of Sec-
tion 15 of the 1933 Act, such indemnity agreement is subject
to the undertaking of the Company in the Registration State-
ment under Item 17 thereof.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers
who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section
15 of the 1933 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity agree-
ment in Section 6(a), as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements
or omissions, made in the Registration Statement (or any
amendment thereto), or any preliminary prospectus supplement
or the Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through you
expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus supplement
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve
it from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party
may participate at its own expense in the defense of such
action. In no event shall the indemnifying party or parties
be liable for the fees and expenses of more than one counsel
for all indemnified parties in connection with any one
action or separate but similar or related actions in the
same jurisdiction arising out of the same general allega-
tions or circumstances.
Section 7. Contribution. In order to provide for just and
------------
equitable contribution in circumstances under which the indemnity
provided for in Section 6 is for any reason held to be unenforce-
able by the indemnified parties although applicable in accordance
with its terms, the Company and the Underwriters shall contribute
to the aggregate losses, liabilities, claims, damages and ex-
penses of the nature contemplated by such indemnity incurred by
the Company and one or more of the Underwriters, as incurred, in
such proportions that the Underwriters are responsible for that
portion represented by the percentage that the underwriting
discount hereunder with respect to the offering of the Offered
Securities bears to the initial public offering price of the
Offered Securities, and the Company is responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For pur-
poses of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Company.
The Underwriters' respective obligations to contribute pursuant
to this Section 7 are several in proportion to the principal
amount of Offered Securities set forth opposite their respective
names in Schedule I to the applicable Pricing Agreement, and not
joint.
Section 8. Representations, Warranties and Agreements to
---------------------------------------------
Survive Delivery. The representations, warranties, indemnities,
----------------
agreements and other statements of the Company or its officers
set forth in or made pursuant to this Agreement will remain
operative and in full force and effect regardless of any investi-
gation made by or on behalf of the Company, any Underwriter or
any person who controls the Company or any Underwriter within the
meaning of Section 15 of the 1933 Act and will survive delivery
of and payment for the Offered Securities.
Section 9. Termination of Agreement.
------------------------
(a) You may terminate this Agreement, by notice to the Company,
at any time at or prior to the Closing Time (i) if there has
been, since the respective dates as of which information is
given in the Registration Statement, any material adverse
change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii) if
there has occurred any material adverse change in the ▇▇▇▇▇-
cial markets in the United States or any outbreak of hos-
tilities or escalation thereof or other calamity or crisis
the effect of which on the financial markets of the United
States is such as to make it, in your judgment, imprac-
ticable to market the Offered Securities or enforce con-
tracts for the sale of the Offered Securities or (iii) if
trading in any securities of the Company has been suspended
by the Commission or the National Association of Securities
Dealers, Inc., or if trading generally on either the
American Stock Exchange or the New York Stock Exchange or in
the over-the-counter market has been suspended, or minimum
or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by such
exchange or by order of the Commission, the National Associ-
ation of Securities Dealers, Inc. or any other governmental
authority or (iv) if a banking moratorium has been declared
by either federal, New York or Texas authorities.
(b) This Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any
other party, except to the extent provided in Section 4.
Notwithstanding any such termination, the provisions of
Sections 6, 7 and 8 shall remain in effect.
Section 10. Default. If one or more of the Underwriters shall
-------
fail at the Closing Time to purchase the Offered Securities that
it or they are obligated to purchase (the "Defaulted Offered
Securities"), you shall have the right, within 24 hours there-
after, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Offered Securities in such
amounts as may be agreed upon and upon the terms herein set
forth; if, however, you have not completed such arrangements
within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Offered
Securities does not exceed 10% of the aggregate principal
amount of the Offered Securities to be purchased, the non-
defaulting Underwriters shall be obligated to purchase the
full amount thereof in the proportions that their respective
underwriting obligations bear to the underwriting obliga-
tions of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Offered
Securities exceeds 10% of the aggregate principal amount of
the Offered Securities to be purchased, this Agreement shall
terminate without liability on the part of any non-
defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default that does not result in a
termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in
the Registration Statement or Prospectus or in any other docu-
ments or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this
Section 10.
Section 11. Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed to have been
duly given if delivered, mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be
directed as set forth in the applicable Pricing Agreement.
Notices to the Company shall be directed to it at Southern Union
Company, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President and Chief
Financial Officer and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President -
Legal and Secretary with a copy to ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, L.L.P.,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
Section 12. Parties. This Agreement and any applicable Pricing
-------
Agreement are made solely for the benefit of the several Under-
writers, the Company and, to the extent expressed, any person who
controls the Company or any of the Underwriters within the
meaning of Section 15 of the 1933 Act, and the directors of the
Company, its officers who have signed the Registration Statement,
and their respective executors, administrators, successors and
assigns and, subject to the provisions of Section 10, no other
person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. The term "successors
and assigns" shall not include any purchaser, as such purchaser,
from any Underwriter of the Offered Securities. If there are two
or more Underwriters, all of their obligations hereunder are
several and not joint.
Section 13. Governing Law and Time. THIS AGREEMENT AND ANY
----------------------
APPLICABLE PRICING AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
Section 14. Counterparts. This Agreement and any applicable
------------
Pricing Agreement may be executed in one or more counterparts and
when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same
agreement.
----------------------------------
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof,
whereupon this instrument will become a binding agreement between
the Company and each Underwriter in accordance with its terms.
Very truly yours,
SOUTHERN UNION COMPANY
By
------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
By
----------------------------
Name:
Title:
For itself, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated, Banc of
America Securities LLC, Chase
Securities Inc. and Credit
Lyonnais Securities (USA) Inc.
and as Representative of the
other Underwriters listed in
Schedule I to the applicable
Pricing Agreement