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EXHIBIT 10(f)
$100,000,000
PANHANDLE EASTERN PIPE LINE COMPANY
$100,000,000 8.25% Senior Notes due 2010, Series A
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Purchase Agreement
March 22, 2000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Panhandle Eastern Pipe Line Company, a Delaware corporation (the
"Company") confirms its agreement with Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation (the "Initial Purchaser") with respect to the issue and sale by the
Company and the purchase by the Initial Purchaser of the principal amount of
$100,000,000 of its 8.25% Senior Notes due 2010, Series A (the "Series A
Notes"), subject to the terms and conditions set forth herein. The Series A
Notes are to be issued pursuant to the provisions of the Indenture, dated as of
March 29, 1999, by and among the Company, CMS Panhandle Holding Company, a
Michigan company (which has merged into the Company), and NBD Bank, as trustee
(predecessor to Bank One Trust Company, National Association), relating to the
Notes (the "Base Indenture"), as supplemented by the Second Supplemental
Indenture, to be dated March 27, 2000 (the "Supplemental Indenture" and together
with the Base Indenture, the "Indenture"), between the Company and Bank One
Trust Company, National Association, as trustee (the "Trustee"). Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Indenture.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date (as defined
below), for so long as such Series A Notes constitute "Transfer Restricted
Securities" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "Commission"), under the circumstances
set forth therein, (i) a registration statement (the "Registration Statement")
under the Securities Act of 1933, as amended (the "Act") relating to
$100,000,000 in aggregate principal amount of the Company's 8.25% Senior Notes
due 2010, Series B (the "Exchange Notes") to be offered in exchange for the
Series A Notes (such offer to exchange being referred to as the "Exchange
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Offer") and (ii) a shelf registration statement pursuant to Rule 415 under the
Act (the "Shelf Registration Statement" and, together with the Exchange Offer
Registration Statement, the "Registration Statements") relating to the resale by
certain holders of the Series A Notes and to use its best efforts to cause such
Registration Statements to be declared and remain effective and usable for the
periods specified in the Registration Rights Agreement and to consummate the
Exchange Offer. The Series A Notes and the Exchange Notes issuable in exchange
therefor are collectively referred to herein as the "Notes." This Agreement, the
Indenture, the Notes and the Registration Rights Agreement are hereinafter
sometimes referred to collectively as the "Operative Documents."
1. Offering Memorandum: The Series A Notes will be offered and sold to
the Initial Purchaser pursuant to one or more exemptions from the registration
requirements under the Act. The Company has prepared a preliminary offering
memorandum dated March 20, 2000 (the "Preliminary Offering Memorandum") and an
offering memorandum, dated March 22, 2000 (the "Offering Memorandum") relating
to the Series A Notes, which incorporate by reference documents filed by the
Company pursuant to Sections 13, 14 or 15 of the Securities and Exchange Act of
1934, as amended (the "Exchange Act"). As used herein, the term "Preliminary
Offering Memorandum" and "Offering Memorandum" shall include respectively the
documents incorporated by reference therein. Any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Preliminary Offering
Memorandum and Offering Memorandum shall be deemed to include amendments or
supplements to the Preliminary Offering Memorandum and Offering Memorandum, and
documents incorporated by reference after the date of this Agreement and prior
to the termination of the offering of the Series A Notes by the Initial
Purchaser.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes shall bear the
following legend:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OR (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
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2. Agreement to Sell and Purchase: On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company, the principal amount of Series A Notes at a purchase
price equal to % of the principal amount thereof (the "Purchase Price").
The Company hereby agrees that, without the prior written consent of
the Initial Purchaser, it will not offer, sell, contract to sell or otherwise
issue debt securities substantially similar to the Series A Notes for a period
from the date of the execution of this Agreement until the date 30 days after
the Closing Date.
3. Terms of Offering: The Initial Purchaser had advised the Company
that the Initial Purchaser will take offers (the "Exempt Resales") of the Series
A Notes purchased hereunder on the terms set forth in the Offering Memorandum
solely to (i) persons whom the Initial Purchaser reasonably believes to be
"qualified institutional buyers" as defined in Rule 144A under the Act
("QIBs")(such persons being referred to herein as the "Eligible Purchasers").
The Initial Purchaser will offer the Series A Notes to Eligible Purchasers
initially at a price equal to 100% of the principal amount thereof. Such price
may be changed at any time without notice.
4. Delivery and Payment:
(a) Delivery of and payment of the Purchase Price for the Series A
Notes shall be made at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
0 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, or such other location as may be mutually
acceptable. Payment for the Series A Notes shall be made to the Company in
federal or other funds immediately available in New York City against delivery
of such Series A Notes for the account of the Initial Purchaser at 10:00 a.m.,
New York City time, on March 27, 2000, or at such other time as shall be agreed
upon by the Initial Purchaser and the Company. The time and date of such
delivery and the payment are herein called the "Closing Date."
(b) Certificates for the Series A Notes shall be in definitive form
or global form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Series A Notes
shall be delivered to you on the Closing Date for the account of the Initial
Purchaser, with any transfer taxes payable in connection with the transfer of
the Series A Notes to the Initial Purchaser duly paid, against payment of the
Purchase Price therefor plus accrued interest, if any, to the date of payment
and delivery. Certificates for the Series A Notes shall be made available to the
Initial Purchaser for inspection not later than 9:30 a.m., New York City time,
on the business day immediately preceding the Closing Date.
5. Agreements of the Company: In further consideration of the
agreements of the Initial Purchaser herein contained, the Company covenants as
follows:
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(a) To prepare the Preliminary Offering Memorandum and Offering
Memorandum in a form approved by you; to make no amendment or any supplement to
the Preliminary Offering Memorandum and Offering Memorandum which shall be
disapproved by your counsel upon legal grounds in writing, after consultation
with you, promptly after reasonable notice thereof; and to furnish you with
copies thereof.
(b) To advise the Initial Purchaser promptly and, if requested by the
Initial Purchaser, confirm such advice in writing, (i) of the issuance by any
state securities commission of any stop order suspending the qualification or
exemption from qualification of any Series A Notes for offering or sale in any
jurisdiction designated by the Initial Purchaser pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose. The Company
shall use its best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Series A Notes under any state
securities or Blue Sky laws and, if at any time any state securities commission
or other federal or state regulatory authority shall issue an order suspending
the qualification or exemption of any Series A Notes under any state securities
or Blue Sky laws, the Company shall use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(c) Prior to 10:00 a.m., New York City time, on the Business Day next
succeeding the date of this Agreement, or as soon as otherwise mutually agreed,
and from time to time thereafter, to furnish the Initial Purchaser and those
persons identified by the Initial Purchaser to the Company as many copies of the
Offering Memorandum, and any amendments or supplements thereto, in such
quantities as the Initial Purchaser may reasonably request. Subject to the
Initial Purchaser's compliance with its representations and warranties and
agreements set forth in Section 7 hereof, the Company consents to the use of the
Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchaser in connection with Exempt Resales.
(d) Until such time as either of the Registration Statements shall be
declared effective by the Commission, but in no event later than nine months
after the date of the Offering Memorandum, any event shall have occurred as a
result of which the Offering Memorandum as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Offering Memorandum is
delivered, not misleading, or, if for any other reason it shall be necessary or
desirable during such same period to amend or supplement the Offering
Memorandum, to notify you and upon your request to prepare and, subject to
Section 5(a) and 5(j) hereof, furnish without charge to each Initial Purchaser
and to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Offering Memorandum or a supplement to the
Offering Memorandum which will correct such statement or omission or effect such
compliance.
(e) To use its best efforts to qualify the Series A Notes for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchaser may designate
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and to pay (or cause to be paid), or reimburse (or cause to be reimbursed) the
Initial Purchaser and their counsel for, reasonable filing fees and expenses in
connection therewith (including the reasonable fees and disbursements of counsel
to the Initial Purchaser and filing fees and expenses paid and incurred prior to
the date hereof), provided, however, that the Company shall not be required to
qualify to do business as a foreign corporation or as a securities dealer or to
file a general consent to service of process or to file annual reports or to
comply with any other requirements deemed by the Company to be unduly
burdensome.
(f) So long as the Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company on a
consolidated basis, all such financial reports to include a consolidated balance
sheet, a consolidated statement of operations, a consolidated statement of cash
flows and a consolidated statement of shareholders' equity as of the end of and
for such fiscal year, together with comparable information as of the end of and
for the preceding year, certified by the Company's independent public
accountants and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly period of
each fiscal year,) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows as of the end
of and for such period, and for the period from the beginning of such year to
the close of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(g) So long as any of the Series A Notes remain outstanding and
during any period in which either the Company is not subject to Section 13 or
15(d) of the Exchange Act, to make available to any holder of Series A Notes in
connection with any sale thereof and any prospective purchaser of such Series A
Notes from such holder, the information required by Rule 144A(d)(4) under the
Act.
(h) To pay all expenses, fees and taxes (other than transfer taxes on
sales by the Initial Purchaser) in connection with the issuance and delivery of
the Series A Notes, except that the Company shall be required to pay the fees
and disbursements (other than fees and disbursements referred to in paragraph
(e) of this Section 5) of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, New York,
New York, counsel to the Initial Purchaser, only in the events provided in
paragraph (i) of this Section 5, the Initial Purchaser hereby agreeing to pay
such fees and disbursements in any other event, and that except as provided in
such paragraph (i), the Company shall not be responsible for any out-of-pocket
expenses of the Initial Purchaser in connection with their services hereunder.
(i) If the Initial Purchaser shall not take up and pay for the Series
A Notes due to the failure of the Company to comply with any of the conditions
specified in Section 10 hereof, or, if this Agreement shall be terminated in
accordance with the provisions of Section 11(b) hereof prior to the Closing
Date, to pay the reasonable fees and disbursements of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel to the Initial Purchaser, and, if the Initial
Purchaser shall not take up and pay for the Series A Notes due to the failure of
the Company to comply with any of the conditions specified in Section 10 hereof,
to reimburse the Initial
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Purchaser for their reasonable out-of-pocket expenses, in an aggregate amount
not exceeding a total of $3,000, incurred in connection with the financing
contemplated by this Agreement.
(j) During the period referred to in paragraph (d) of this Section 5,
to not amend or supplement the Offering Memorandum unless the Company has
furnished the Initial Purchaser and counsel to the Initial Purchaser with a copy
for their review and comment a reasonable time prior to filing and has
reasonably considered any comments of the Initial Purchaser, or any such
amendment or supplement to which such counsel shall reasonably object on legal
grounds in writing, after consultation with the Initial Purchaser.
(k) During the period referred to in paragraph (d) of this Section 5,
to furnish the Initial Purchaser with copies of all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
(l) During the period referred to in paragraph (d) of this Section 5,
to comply with all requirements under the Exchange Act relating to the filing
with the Commission of its reports pursuant to Section 13 of the Exchange Act
and of its proxy statements pursuant to Section 14 of the Exchange Act.
(m) To comply in all material respects with all of its agreements set
forth in the Registration Rights Agreement.
(n) To obtain the approval of The Depository Trust Company ("DTC")
for "book-entry" transfer of the Notes, and to comply in all material respects
with all of its agreements set forth in the representation letters of the
Company to DTC relating to the approval of the Notes by DTC for "book-entry"
transfer.
(o) Not to (or permit any affiliate to) sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Act) that would be integrated with the sale of the Series A Notes
to the Initial Purchaser or pursuant to Exempt Resales in a manner that would
require the registration of any such sale of the Series A Notes under the Act.
(p) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes.
(q) To cause the Exchange Offer to be made in the appropriate form to
permit Exchange Notes registered pursuant to the Act to be offered in exchange
for the Series A Notes and to comply in all material respects with all
applicable federal and state securities laws in connection with the Exchange
Offer.
(r) During the period of two years after the Closing Date, not to,
and not permit any of its affiliates (as defined in Rule 144 under the Act) to,
resell any of the Notes which constitute "restricted securities" under Rule 144
that have been reacquired by any of them.
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(s) To apply the net proceeds of the offering and sale of the Series
A Notes in the manner set forth in the Offering Memorandum under the caption
"Use of Proceeds".
6. Representations and Warranties of the Company: The Company
represents and warrants to, and agrees with, the Initial Purchaser that:
(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum does not, and any supplement or amendment to it will not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph shall not apply to
statements in or omissions from the Preliminary Offering Memorandum and the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use therein. No stop order
preventing the use of the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act, has been
issued.
(b) The documents incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum, when they were filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed) with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and any further documents so filed and incorporated by
reference will, when they are filed with the Commission, conform in all material
respects to the requirements of the Exchange Act and the rules and regulations
of the Commission promulgated thereunder; none of such documents, when it was
filed (or, if an amendment with respect to any such document was filed, when
such amendment was filed), 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, in light of the circumstances under which they were
made, not misleading; and no such further document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading.
(c) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has all requisite authority to own or lease its properties and
conduct its business as described in the Preliminary Offering Memorandum and the
Offering Memorandum and to consummate the transactions contemplated hereby, and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business as described in the
Preliminary Offering Memorandum and the Offering Memorandum or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its Subsidiaries (as defined in Rule 405 under
the Act, and hereinafter called a "Subsidiary"), taken as a whole; each
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Significant Subsidiary (as defined in Rule 405 under the Act, and hereinafter
called a "Significant Subsidiary") of the Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has all requisite authority to own or lease
its properties and conduct its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business as described in the Preliminary Offering Memorandum and the
Offering Memorandum or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
(d) This Agreement has been duly authorized, executed and delivered
by the Company.
(e) The Notes are in the form contemplated by the Indenture and have
been duly authorized by the Company. At the Closing Date, the Series A Notes
will have been duly executed and delivered by the Company and, the Series A
Notes, when authenticated by the Trustee in the manner provided for in the
Indenture and delivered against payment therefor as provided in this Agreement,
will constitute valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding at law or in equity), and will be entitled to the security afforded
by the Indenture equally and ratably with all securities outstanding thereunder.
The Notes conform in all material respects to the descriptions thereof in the
Preliminary Offering Memorandum and the Offering Memorandum.
(f) The Registration Rights Agreement has been duly authorized by the
Company. At the Closing Date, the Registration Rights Agreement will have been
duly executed and delivered by the Company and will constitute a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms except to the extent that the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or in
equity) by, equitable principles of general applicability. The Registration
Rights Agreement conforms in all material respects to the description thereof in
the Preliminary Offering Memorandum and the Offering Memorandum.
(g) The Indenture has been duly authorized by the Company. At the
Closing Date, the Indenture will have been duly executed and delivered by the
Company and will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or by general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity); the Indenture conforms in
all material respects to
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the description thereof in the Preliminary Offering Memorandum and the Offering
Memorandum; and the Indenture conforms to the requirements of the Trust
Indenture Act of 1939, as amended (the "TIA").
(h) On and after the Closing Date, of the outstanding capital stock
of each of Trunkline Gas Company, Pan Gas Storage Company and Trunkline LNG
Company and each subsidiary of the Company organized in the United States
(collectively, the "U.S. Subsidiaries") will be owned directly or indirectly by
the Company, free and clear of any security interest, claim, lien, or other
encumbrance or preemptive rights), and there are no outstanding rights
(including, without limitation, preemptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in any of the U.S. Subsidiaries or any
contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any such capital stock, any such convertible or
exchangeable securities or any such rights, warrants or options.
(i) The Company and the Significant Subsidiaries have all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and have made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use their properties and
assets and to conduct their businesses in the manner described in the
Preliminary Offering Memorandum and the Offering Memorandum, except to the
extent that the failure to obtain or file would not have a material adverse
effect on either the Company or the Significant Subsidiaries.
(j) No order, license, consent, authorization or approval of, or
exemption by, or the giving of notice to, or the registration with any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, and no filing, recording, publication or registration
in any public office or any other place, was or is now required to be obtained
by the Company to authorize its execution or delivery of, or the performance of
its obligations under, this Agreement or any of the Operative Documents, except
such as have been obtained or may be required under state securities or Blue Sky
laws or as referred to in the Preliminary Offering Memorandum and the Offering
Memorandum.
(k) None of the issuance and sale of the Notes, or the execution or
delivery by the Company of, or the performance by the Company of its obligations
under, this Agreement or the Operative Documents, did or will conflict with,
result in a breach of any of the terms or provisions of, or constitute a default
or require the consent of any party under the Company's Articles of
Incorporation or by-laws, any material agreement or instrument to which the
Company is a party, any existing applicable law, rule or regulation or any
judgment, order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its
properties or assets, or, except as described in the Preliminary Offering
Memorandum and the Offering Memorandum, did or will result in the creation or
imposition of any lien on the Company's properties or assets.
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(l) Except as disclosed in the Offering Memorandum, there is no
action, suit, proceeding, inquiry or investigation (at law or in equity or
otherwise) pending or, to the knowledge of the Company, threatened against
either the Company or a Significant Subsidiary by any governmental authority
that (i) questions the validity, enforceability or performance of this Agreement
or any of the Operative Documents or (ii) if determined adversely, is likely to
have a material adverse effect on the business or financial condition of the
Company, or have a material adverse effect on the ability of the Company to
perform its obligations hereunder or the ability of the Company to consummate
the transactions contemplated by this Agreement.
(m) There has not been any material and adverse change in the
business, properties or financial condition of the Company from that set forth
or incorporated by reference in the Offering Memorandum (other than changes
referred to in or contemplated by the Offering Memorandum).
(n) Except as set forth in the Offering Memorandum, no event or
condition exists that constitutes, or with the giving of notice or lapse of time
or both would constitute, a default or any breach or failure to perform by the
Company or any of its Significant Subsidiaries in any material respect under any
indenture, mortgage, loan agreement, lease or other material agreement or
instrument to which the Company or any of its Significant Subsidiaries is a
party or by which it or any of its Significant Subsidiaries or any of their
properties may be bound.
(o) The Offering Memorandum, as of its date, contained all the
information specified in, and meeting the requirements of, Rule 144A(d)(4) under
the Act.
(p) When the Series A Notes are issued and delivered pursuant to this
Agreement, the Series A Notes will not be of the same class (within the meaning
of Rule 144A under the Act) as any security of the Company that is listed on a
national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated inter-dealer quotation system.
(q) Neither the Company nor any Affiliate of the Company has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the Act)
which is or will be integrated with the sale of the Series A Notes in a manner
that would require the registration under the Act of the Series A Notes or (ii)
engaged in any form of general solicitation or general advertising in connection
with the offering of the Series A Notes, (as those terms are used in Regulation
D under the Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act, including, but not limited to, publication or
release of articles, notices or other communications published in any newspaper,
magazine, or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general solicitation
or general advertising. No securities of the same class as the Series A Notes
have been issued and sold by the Company within the six-month period immediately
prior to the date hereof.
(r) Prior to the effectiveness of any Registration Statement, the
Indenture is not required to be qualified under the TIA.
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(s) None of the Company nor any of its affiliates or any person
acting on its or its behalf (other than the Initial Purchaser, as to whom the
Company makes no representation) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S under the Act ("Regulation
S") with respect to the Series A Notes.
(t) No registration under the Act of the Series A Notes is required
for the sale of the Series A Notes to the Initial Purchaser as contemplated
hereby or for the Exempt Resales assuming the accuracy of the Initial Purchaser'
representations and warranties and agreements set forth in Section 7 hereof.
(u) Neither the Company nor any of its Subsidiaries, after giving
effect to the offering and sale of the Series A Notes, will be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
The Company acknowledges that the Initial Purchaser and, for purposes
of the opinions to be delivered to the Initial Purchaser pursuant to Section 10
hereof, counsel to the Company and counsel to the Initial Purchaser will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
7. Initial Purchaser's Representations and Warranties: Upon the
authorization by you of the release of the Series A Notes, the Initial Purchaser
proposes to offer the Series A Notes for sale upon the terms and conditions set
forth in this Agreement and the Offering Memorandum and the Initial Purchaser
hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Series A Notes only to Eligible
Purchasers;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Series A Notes by any form of
general solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Act.
8. Indemnification:
(a) The Company agrees, to the extent permitted by law, to indemnify
and hold harmless the Initial Purchaser and each person, if any, who controls
any such Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act or otherwise, and to reimburse the Initial Purchaser and such
controlling person or persons, if any, for any legal or other expenses incurred
by them in connection with defending any action, suit or proceeding (including
governmental investigations) as provided in Section 8(c) hereof, insofar as such
losses, claims, damages, liabilities or actions, suits or proceedings (including
governmental investigations) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Offering
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Memorandum, or, if the Offering Memorandum shall be amended or supplemented, in
the Offering Memorandum as so amended or supplemented or arise out of or are
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any such untrue statement or alleged
untrue statement or omission or alleged omission which was made in the Offering
Memorandum or in the Offering Memorandum as so amended or supplemented, in
reliance upon and in conformity with information furnished in writing to the
Company by, or on behalf of, the Initial Purchaser expressly for use therein and
except that this indemnity shall not inure to the benefit of the Initial
Purchaser (or any person controlling such Initial Purchaser) on account of any
losses, claims, damages, liabilities or actions, suits or proceedings arising
from the sale of the Series A Notes to any person if a copy of the Offering
Memorandum, as the same may then be supplemented or amended (excluding, however,
any document then incorporated or deemed incorporated therein by reference), was
not sent or given by or on behalf of the Initial Purchaser to such person (i)
with or prior to the written confirmation of sale involved or (ii) as soon as
available after such written confirmation, relating to an event occurring prior
to the payment for and delivery to such person of the Series A Notes involved in
such sale, and the omission or alleged omission or untrue statement or alleged
untrue statement was corrected in the Offering Memorandum as supplemented or
amended at such time.
The Company's indemnity agreement contained in this Section 8(a), and
the covenants, representations and warranties of the Company contained in this
Agreement, shall remain in full force and effect regardless of any investigation
made by or on behalf of any person, and shall survive the delivery of and
payment for the Series A Notes hereunder, and the indemnity agreement contained
in this Section 8 shall survive any termination of this Agreement. The
liabilities of the Company in this Section 8(a) are in addition to any other
liabilities of the Company under this Agreement or otherwise.
(b) The Initial Purchaser agrees, to the extent permitted by law, to
indemnify, hold harmless and reimburse the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, to the same extent and upon the same terms as the indemnity
agreement of the Company set forth in Section 8(a) hereof, but only with respect
to alleged untrue statements or omissions made in the Offering Memorandum or in
the Offering Memorandum, as amended or supplemented, (if applicable) in reliance
upon and in conformity with information furnished in writing to the Company by
the Initial Purchaser expressly for use therein.
The indemnity agreement on the part of the Initial Purchaser contained
in this Section 8(b) and the representations and warranties of the Initial
Purchaser contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any other
person, and shall survive the delivery of and payment for the Series A Notes
hereunder, and the indemnity agreement contained in this Section 8(b) shall
survive any termination of this Agreement. The liabilities of the Initial
Purchaser in this Section 8(b) are in addition to any other liabilities of the
Initial Purchaser under this Agreement or otherwise.
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(c) If a claim is made or an action, suit or proceeding (including
governmental investigations) is commenced or threatened against any person as to
which indemnity may be sought under Section 8(a) or 8(b), such person (the
"Indemnified Person") shall notify the person against whom such indemnity may be
sought (the "Indemnifying Person") promptly after any assertion of such claim
threatening to institute an action, suit or proceeding or if such an action,
suit or proceeding is commenced against such Indemnified Person, promptly after
such Indemnified Person shall have been served with a summons or other first
legal process, giving information as to the nature and basis of the claim.
Failure to so notify the Indemnifying Person shall not, however, relieve the
Indemnifying Person from any liability which it may have on account of the
indemnity under Section 8(a) or 8(b) if the Indemnifying Person has not been
prejudiced in any material respect by such failure. Subject to the immediately
succeeding sentence, the Indemnifying Person shall assume the defense of any
such litigation or proceeding, including the employment of counsel and the
payment of all expenses, with such counsel being designated, subject to the
immediately succeeding sentence, in writing by the Initial Purchaser in the case
of parties indemnified pursuant to Section 8(b) and by the Company in the case
of parties indemnified pursuant to Section 8(a). Any Indemnified Person shall
have the right to participate in such litigation or proceeding and to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include (x) the Indemnifying Person and (y) the Indemnified Person and,
in the written opinion of counsel to such Indemnified Person, representation of
both parties by the same counsel would be inappropriate due to actual or likely
conflicts of interest between them, in either of which cases the reasonable fees
and expenses of counsel (including disbursements) for such Indemnified Person
shall be reimbursed by the Indemnifying Person to the Indemnified Person. If
there is a conflict as described in clause (ii) above, and the Indemnified
Persons have participated in the litigation or proceeding utilizing separate
counsel whose fees and expenses have been reimbursed by the Indemnifying Person
and the Indemnified Persons, or any of them, are found to be solely liable, such
Indemnified Person shall repay to the Indemnifying Person such fees and expenses
of such separate counsel as the Indemnifying Person shall have reimbursed. It is
understood that the Indemnifying Person shall not, in connection with any
litigation or proceeding or related litigation or proceedings in the same
jurisdiction as to which the Indemnified Persons are entitled to such separate
representation, be liable under this Agreement for the reasonable fees and
out-of-pocket expenses of more than one separate firm (together with not more
than one appropriate local counsel) for all such Indemnified Persons. Subject to
the next paragraph, all such fees and expenses shall be reimbursed by payment to
the Indemnified Persons of such reasonable fees and expenses of counsel promptly
after payment thereof by the Indemnified Persons.
In furtherance of the requirement above that fees and expenses of any
separate counsel for the Indemnified Persons shall be reasonable, the Initial
Purchaser and the Company agree that the Indemnifying Person's obligations to
pay such fees and expenses shall be conditioned upon the following:
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(i) in case separate counsel is proposed to be retained by
the Indemnified Persons pursuant to clause (ii) of the preceding
paragraph, the Indemnified Persons shall in good faith fully consult
with the Indemnifying Person in advance as to the selection of such
counsel;
(ii) reimbursable fees and expenses of such separate
counsel shall be detailed and supported in a manner reasonably
acceptable to the Indemnifying Person (but nothing herein shall be
deemed to require the furnishing to the Indemnifying Person of any
information, including without limitation, computer print-outs of
lawyers' daily time entries, to the extent that, in the judgment of
such counsel, furnishing such information might reasonably be expected
to result in a waiver of any attorney-client privilege); and
(iii) The Company and the Initial Purchaser shall cooperate
in monitoring and controlling the fees and expenses of separate
counsel for Indemnified Persons for which the Indemnifying Person is
liable hereunder, and the Indemnified Person shall use every
reasonable effort to cause such separate counsel to minimize the
duplication of activities as between themselves and counsel to the
Indemnifying Person.
The Indemnifying Person shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees, subject to the
provisions of this Section 8, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.
(d) If the indemnification provided for in this Section 8 above is
unavailable to or insufficient to hold harmless an Indemnified Person under this
Section 8 in respect of any losses, claims, damages or liabilities (or actions,
suits or proceedings (including governmental investigations) in respect thereof)
referred to therein, then each Indemnifying Person under this Section 8 above
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Indemnifying Person on the one hand and the Indemnified Person
on the other from the offering of the Series A Notes. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each Indemnifying Person shall contribute to such amount
paid or payable by such Indemnified Person in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in
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such losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Initial Purchaser on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the total discounts or
commissions received by the Initial Purchaser, in each case as set forth in the
Offering Memorandum, bear to the aggregate offering price of the Series A Notes.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Initial Purchaser on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Initial Purchaser agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Initial Purchaser were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8(d). The amount paid
or payable by an Indemnified Person as a result of the losses, claims, damages
or liabilities (or actions, suits or proceedings (including governmental
proceedings) in respect thereof) referred to above in this Section 8(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or defending any such
action, suits or proceedings (including governmental proceedings) or claim,
provided that the provisions of this Section 8 above have been complied with (in
all material respects) in respect of any separate counsel for such Indemnified
Person. Notwithstanding the provisions of this Section 8(d), no Initial
Purchaser shall be required to contribute any amount greater than the excess of
(i) the total price at which the Series A Notes sold and distributed by it to
the public were offered to the public over (ii) the amount of any damages which
such Initial Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
The agreement with respect to contribution contained in this Section
8(d) shall remain in full force and effect regardless of any investigation made
by or on behalf of the Company or the Initial Purchaser, and shall survive
delivery of and payment for the Series A Notes hereunder and any termination of
this Agreement.
9. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the Initial Purchaser, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Initial Purchaser or any controlling person of the Initial Purchaser, the
Company, or any officer, director or controlling person of the Company, and
shall survive delivery of and payment for the Notes.
10. Conditions of Initial Purchaser's Obligations: The several
obligations of the Initial Purchaser shall be subject to the condition that all
representations and warranties and
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other statements of the Company herein are, at and as of the Closing Date, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) That all legal proceedings to be taken in connection with the
issue and sale of the Series A Notes shall be reasonably satisfactory in form
and substance to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, New York, New York,
counsel to the Initial Purchaser.
(b) That, at the Closing Date, the Initial Purchaser shall be
furnished with the following opinions, dated the Closing Date:
(i) Opinion of Xxxxxxx X. XxxXxxxxx, Esq., as special counsel to
the Company, substantially to the effect set forth in Exhibit A to
this Agreement; and
(ii) Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, of New
York, New York, counsel to the Initial Purchaser, substantially to the
effect set forth in Exhibit B to this Agreement.
(c) That on the date of the Preliminary Offering Memorandum and on
the Closing Date the Initial Purchaser shall have received a letter from each of
Xxxxxx Xxxxxxxx LLP and Deloitte & Touche LLP in form and substance satisfactory
to the Initial Purchaser, dated as of such respective dates, (i) confirming that
they are independent public accountants within the meaning of the Act and the
applicable rules and regulations adopted by the Commission thereunder, (ii)
stating that in their opinion the financial statements examined by them and
included or incorporated by reference in the Offering Memorandum complied as to
form in all material respects with the applicable accounting requirements of the
Commission, including the applicable rules and regulations adopted by the
Commission, and (iii) covering, as of a date not more than three business days
prior to the date of such letter, such other matters as the Initial Purchaser
reasonably request.
(d) That, between the date of the execution of this Agreement and the
Closing Date, no material and adverse change shall have occurred in the
business, properties or financial condition of each of the Company and its
Subsidiaries, taken as a whole, which, in the judgment of the Initial Purchaser,
impairs the marketability of the Series A Notes (other than changes referred to
in or contemplated by the Offering Memorandum).
(e) That, at the Closing Date, each of the Company and Panhandle
shall have delivered to the Initial Purchaser a certificate of an executive
officer of the Company to the effect that, to the best of his or her knowledge,
information and belief, (i) there shall have been no material adverse change in
the business, properties or financial condition of the Company from that set
forth in the Offering Memorandum (other than changes referred to in or
contemplated by the Offering Memorandum); (ii) the representations and
warranties of the Company herein at and as of the Closing Date are true and
correct; and (iii) the Company has complied with all
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agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Date.
(f) That the Company shall have executed and delivered the
Registration Rights Agreement.
(g) That the Company shall have performed such of its obligations
under this Agreement as are to be performed at or before the Closing Date by the
terms hereof.
(h) That the Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of Offering Memorandum on the
Business Day next succeeding the date of this Agreement;
(i) That any additional documents or agreements reasonably requested
by the Initial Purchaser or its counsel to permit the Initial Purchaser to
perform its obligations or permit its counsel to deliver opinions hereunder
shall have been provided to it.
(j) That between the date of the execution of this Agreement and the
Closing Date there has been no downgrading of the investment ratings of any of
the Company's securities by Standard & Poor's Ratings Group, Xxxxx'x Investors
Service, Inc. or Duff & Xxxxxx Credit Rating Co., and the Company shall not have
been placed on "credit watch" or "credit review" with negative implications by
any of such statistical rating organizations if any of such occurrences shall,
in the judgment of the Initial Purchaser, after reasonable inquiries on the part
of the Initial Purchaser, impair the marketability of the Series A Notes.
11. Effectiveness and Termination of Agreement; Initial Purchaser
Default:
(a) This Agreement shall become effective upon the execution and
delivery of this Agreement by the parties hereto.
(b) This Agreement may be terminated at any time prior to the Closing
Date by the Initial Purchaser if, prior to such time, any of the following
events shall have occurred: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Ex change; (ii) a suspension or
material limitation in trading in Panhandle's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the judgment of the Initial Purchaser makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Series A Notes on the terms and in the manner contemplated in the
Offering Memorandum.
If the Initial Purchaser elects to terminate this Agreement, as
provided in this Section 11, it will promptly notify the Company by telephone or
telecopy, confirmed by letter. If this Agreement shall not be carried out by the
Initial Purchaser for any reason permitted
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hereunder, or if the sale of the Securities to the Initial Purchaser as herein
contemplated shall not be carried out because either the Company is not able to
comply with the terms hereof, the Company shall not be under any obligation
under this Agreement and shall not be liable to the Initial Purchaser for the
loss of anticipated profits from the transactions contemplated by this Agreement
and the Initial Purchaser shall be under no liability to the Company.
(d) Notwithstanding the foregoing, the provisions of Sections 5(e),
5(i), 8 and 9 shall survive any termination of this Agreement.
12. Miscellaneous: Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to c/o Panhandle
Eastern Pipe Line Company, 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000,
Attention: Corporate Secretary, and (ii) if to the Initial Purchaser, to
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attn: Xxxx Xxxxxx (000) 000-0000, or in any case to such other
address as the person to be notified may have requested in writing.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Initial
Purchaser, the Initial Purchaser's directors and officers, any controlling
persons referred to herein, and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Series A Notes from an
Initial Purchaser merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Initial Purchaser.
Very truly yours,
PANHANDLE EASTERN PIPE LINE
COMPANY
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President,
Chief Financial Officer, and
Treasurer
Accepted: March 22, 2000
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
