EXHIBIT 1.1
Execution Copy
$240,000,000
TENNESSEE GAS PIPELINE COMPANY
8 3/8% NOTES DUE JUNE 15, 2032
June 4, 2002
UNDERWRITING AGREEMENT
Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Tennessee Gas Pipeline Company, a Delaware corporation
("COMPANY"), proposes to issue and sell $240,000,000 principal amount
("SECURITIES") of its 8 3/8% Notes Due June 15, 2032 to be issued under an
indenture, dated as of March 4, 1997, as supplemented through the date hereof
("ORIGINAL INDENTURE") and as further supplemented by the Fifth Supplemental
Indenture dated as of June 10, 2002 (as supplemented, the "SUPPLEMENTAL
INDENTURE", and together with the Original Indenture, the "INDENTURE") between
the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank)
as Trustee. The Securities are sometimes herein called the "OFFERED SECURITIES."
The Company hereby agrees with Credit Suisse First Boston Corporation (the
"UNDERWRITER") as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriter that:
(a) A registration statement (No. 333-63429), including a
prospectus, relating to the Offered Securities has been filed with the
Securities and Exchange Commission ("COMMISSION") and has been declared
effective by the Commission. Such registration statement, as amended
through the date of this Agreement, including all documents
incorporated or deemed to be incorporated by reference therein, as from
time to time amended or supplemented pursuant to the Securities
Exchange Act of 1934 ("EXCHANGE ACT"), and the rules and regulations of
the Commission thereunder, or otherwise, are hereinafter referred to as
the "REGISTRATION STATEMENT", and the prospectus included in such
Registration Statement, as supplemented to reflect the terms of the
Offered Securities and the terms of offering thereof, as first filed
with the Commission on June 5, 2002 pursuant to and in accordance with
Rule 424(b) ("RULE 424(b)") under the Securities Act of 1933 ("ACT"),
including all material incorporated by reference therein, is
hereinafter referred to as the "PROSPECTUS." No document has been or
will be prepared or distributed in reliance on Rule 434 under the Act.
(b) On the effective date of the Registration Statement, such
Registration Statement conformed in all material respects to the
requirements of the Act, the Trust Indenture Act of 1939 ("TRUST
INDENTURE Act") and the rules and regulations of the Commission ("RULES
AND REGULATIONS") and did not include 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 not misleading; the
Registration Statement, as of the date of this
Agreement, conforms and, as amended or supplemented, if applicable,
will conform in all material respects to the requirements of the Act,
the Trust Indenture Act and the Rules and Regulations, and does not
include and, as amended or supplemented, if applicable, will not
include 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 not misleading; the Prospectus, as of the date of
its filing, conforms, and as amended or supplemented, if applicable,
will conform in all material respects to the requirements of the Act,
the Trust Indenture Act, and the Rules and Regulations and does not
include, and as amended or supplemented, if applicable, will not
include 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 light of the circumstances under which they were
made, not misleading; except that the provisions in the foregoing
paragraph do not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company by
any Underwriter through the Representative, if any, specifically for
use therein.
(c) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, when they
became effective or at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the Act, the Exchange Act or the Rules and
Regulations, as applicable, and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective, at the time the Prospectus was issued and on the
Closing Date (as defined below), did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, and
with respect to the Prospectus, in light of the circumstances under
which they were made, not misleading.
(d) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good standing
in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except
where the failure to be so qualified, individually or in the aggregate,
would not have a material adverse effect on the financial condition,
business, properties or results of operations of the Company and its
subsidiaries taken as a whole ("MATERIAL ADVERSE EFFECT").
(e) Each significant subsidiary (as defined in Regulation S-X
of the Act and set forth on Schedule A hereto) ("SIGNIFICANT
SUBSIDIARY") of the Company has been duly incorporated or formed, as
the case may be, and is an existing corporation, limited liability
company or limited partnership in good standing under the laws of the
jurisdiction of its incorporation or formation, as the case may be,
with power and authority (corporate or other) to own its properties and
conduct its business as described in the Prospectus; and each such
Significant Subsidiary is duly qualified to do business as a foreign
corporation, limited liability company or limited partnership in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification,
except where the failure to be so qualified, individually or in the
aggregate, would not have a Material Adverse Effect; all of the issued
and outstanding equity interests of each Significant Subsidiary have
been duly authorized and validly issued and are fully paid and
nonassessable; and the equity interests of each Significant Subsidiary
owned by the Company, directly or through subsidiaries, are owned free
from liens, claims, or adverse interests of any nature.
(f) The Original Indenture has been duly authorized, executed
and delivered and has been qualified under the Trust Indenture Act with
respect to the Offered Securities registered thereby; the Offered
Securities have been duly authorized; and when the Offered Securities
are delivered and paid for pursuant to this Agreement on June 10, 2002
("CLOSING DATE"), the Supplemental Indenture will have been duly
authorized, executed and delivered and will have been qualified under
the Trust Indenture Act with respect to the Offered Securities
registered thereby on the Closing Date, such Offered Securities will
have been duly executed, authenticated, issued and delivered and will
conform in all material respects to the description thereof contained
in the Prospectus and the Indenture, and such Offered Securities will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their
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terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(g) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this Agreement
in connection with the issuance and sale of the Offered Securities by
the Company, except such as have been obtained and made under the Act
and the Trust Indenture Act and such as may be required under state
securities laws.
(h) The execution, delivery and performance of the Indenture
and this Agreement, and the issuance and sale of the Offered Securities
and compliance with the terms and provisions thereof will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any Significant Subsidiary or
any of their properties, or any agreement or instrument to which the
Company or any such Significant Subsidiary is a party or by which the
Company or any such Significant Subsidiary is bound or to which any of
the properties of the Company or any Significant Subsidiary is subject,
or the charter or by-laws of the Company or any such Significant
Subsidiary, and the Company has full power and authority to authorize,
issue and sell the Offered Securities as contemplated by this
Agreement.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) Neither the Company nor any Significant Subsidiary is (i)
in violation of its respective charter or by-laws or (ii) in default in
the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any Significant
Subsidiary is a party or by which the Company or any Significant
Subsidiary or their respective property is bound.
(k) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and indefeasible title to all real properties
and all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Prospectus, the Company
and its Significant Subsidiaries hold any leased real or personal
property under valid and enforceable leases with no exceptions that
would materially interfere with the use made or to be made thereof by
them.
(l) Except as disclosed in the Prospectus, neither the Company
nor any of its Significant Subsidiaries is in violation of any statute,
any rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal
or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "ENVIRONMENTAL LAWS"),
owns or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would, individually or in
the aggregate, have a Material Adverse Effect; and, except as disclosed
in the Prospectus, the Company is not aware of any pending
investigation which might lead to such a claim.
(m) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under the Indenture or this Agreement, or which
are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are, to the
Company's knowledge, threatened or contemplated.
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(n) The financial statements included in the Registration
Statement and the Prospectus present fairly the consolidated financial
position of the Company and its consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the
periods shown, and, except as otherwise disclosed in the Prospectus,
such consolidated financial statements have been prepared in conformity
with the generally accepted accounting principles in the United States
applied on a consistent basis; and the schedules included in the
Registration Statement present fairly the information required to be
stated therein; and the assumptions used in preparing the pro forma
financial statements incorporated by reference in the Registration
Statement and the Prospectus provide a reasonable basis for presenting
the significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(o) Except as disclosed in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) since the date of the latest audited financial statements
included in the Prospectus there has been no material adverse change,
nor any development or event involving a prospective material adverse
change, in the financial condition, business, properties or results of
operations of the Company and its subsidiaries taken as a whole, and,
except as disclosed in or contemplated by the Prospectus, there has
been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(p) No "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the Act
has indicated to the Company that it is considering (i) the
downgrading, suspension or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in,
any rating assigned to the Company or any securities of the Company or
(ii) any change in the outlook for any rating of the Company or any
securities of the Company.
(q) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be (i) an
"investment company" as defined in the Investment Company Act of 1940,
as amended, or (ii) a "holding company" within the meaning of, or
subject to regulation under, the Public Utility Holding Company Act of
1935, as amended, and the rules and regulations promulgated by the
Commission thereunder.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees, to purchase from the Company, at a
purchase price of 99.014% of the principal amount thereof, the Offered
Securities.
The Company will deliver against payment of the purchase price
the Offered Securities in the form of one or more permanent global Securities in
definitive form (the "GLOBAL SECURITIES") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Prospectus. Payment for the Offered Securities
shall be made by the Underwriter in Federal (same day) funds by wire transfer to
an account at a bank acceptable to Credit Suisse First Boston Corporation
("CSFBC") and designated in writing by the Company, not less than 48 hours prior
to the Closing Date, at 9:00 A.M., (New York time), on June 10, 2002, or at such
other time not later than seven full business days thereafter as CSFBC and the
Company determine, such time being herein referred to as the "CLOSING DATE",
against delivery to the Trustee as custodian for DTC of the Global Securities
representing all of the Offered Securities. The Global Securities will be made
available for checking at the office of Andrews & Kurth Mayor, Day, Caldwell &
Keeton L.L.P. at least 24 hours prior to the Closing Date.
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4. Offering by Underwriter. It is understood that the Underwriter
proposes to offer the Offered Securities for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
Underwriter that it will furnish or otherwise make available to counsel for the
Underwriter, one conformed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with each offering of
Offered Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by CSFBC, subparagraph (5)) not later than the
second business day following the execution and delivery of this
Agreement.
(b) During such period as, in the opinion of counsel for the
Underwriter, a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, the Company will
advise CSFBC promptly of any proposal to amend or supplement the
Registration Statement or the Prospectus (except in the case of Annual
Reports filed on Form 10-K or Quarterly Reports filed on Form 10-Q) and
will afford CSFBC a reasonable opportunity to comment on any such
proposed amendment or supplement (except in the case of reports to be
filed by the Company in the ordinary course pursuant to the Exchange
Act); and, during such period as, in the opinion of counsel for the
Underwriter, a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, the Company will
also advise CSFBC promptly of the filing of any such amendment or
supplement (except in the case of reports to be filed by the Company in
the ordinary course pursuant to the Exchange Act) and of the
institution by the Commission of any stop order proceedings in respect
of the Registration Statement or of any part thereof and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company promptly will notify CSFBC of such event and will promptly
prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CSFBC's consent
to, nor the Underwriter's delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
6 hereof.
(d) As soon as practicable, but not later than 16 months,
after the date of this Agreement, the Company will make generally
available to its security holders an earnings statement covering a
period of at least 12 months beginning after the later of (i) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of this
Agreement and (ii) the date of the Company's most recent Annual Report
on Form 10-K filed with the Commission prior to the date of this
Agreement, which will satisfy the provisions of Section 11(a) of the
Act.
(e) The Company will furnish or make generally available to
the Underwriter copies of the Registration Statement, including all
exhibits, any related preliminary prospectus, and any related
preliminary prospectus supplement, upon request of the Underwriter, and
the Prospectus and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as CSFBC
reasonably requests. The Company will pay the expenses of printing and
distributing to the Underwriter all such documents.
(f) The Company will cooperate with the Underwriter in
connection with the qualification of the Offered Securities for sale
and the determination of their eligibility for investment under the
laws of such jurisdictions as CSFBC designates and will continue such
qualifications in effect so long as required for the distribution of
the Offered Securities; provided, however, that the Company shall not
be required in connection therewith to qualify as a foreign corporation
in any jurisdiction in which it is not now so
5
qualified or to take any action that would subject it to general
consent to service of process or taxation other than as to matters and
transactions taken by the Company as contemplated herein that relates
to the Prospectus, the Registration Statement, or the offering of the
Offered Securities in any jurisdiction in which it is not now so
qualified.
(g) During the period of two years hereafter, the Company will
furnish or make generally available to the Underwriter as soon as
practicable after the end of each fiscal year, a copy of its annual
report to stockholders, if any, for such year; and the Company will
furnish to the Underwriter as soon as available, a copy of each report
and any definitive proxy statement of the Company filed with the
Commission under the Exchange Act or mailed to stockholders.
(h) The Company will pay all expenses incident to the
performance of its obligations under this Agreement, for any filing
fees and other expenses (including fees and disbursements of counsel)
incurred in connection with qualification of the Offered Securities for
sale under the laws of such jurisdictions as CSFBC designates and the
printing of memoranda relating thereto, for any travel expenses of the
Company's officers and employees and any other expenses of the Company
in connection with attending or hosting meetings with prospective
purchasers of the Offered Securities and for expenses incurred in
distributing preliminary prospectuses, if any, and the Prospectus
(including any amendments and supplements thereto) to the Underwriter.
(i) The Company will not offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to debt
securities issued or guaranteed by the Company and having a maturity of
more than one year from the date of issue, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of CSFBC for a period beginning at
the date of this Agreement and ending at the later of the Closing Date
and the lifting of trading restrictions by the Representatives.
6. Conditions of the Obligations of the Underwriter. The obligations of
the Underwriter to purchase and pay for the Offered Securities on the Closing
Date will be subject to the accuracy of the representations and warranties on
the part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) On or prior to the date of this Agreement, the Underwriter
shall have received a letter, dated the date of delivery thereof, of
PricewaterhouseCoopers LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and any
schedules and any summary of earnings examined by them and
included in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on any unaudited financial statements included in
the Registration Statement;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements, if
any, and any summary of earnings included in the
Prospectus do not comply as to form in all material
respects with the
6
applicable accounting requirements of the Act and the
related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements and summary of
earnings for them to be in conformity with generally
accepted accounting principles;
(B) if any unaudited "capsule" information
is contained in the Prospectus, the unaudited
consolidated operating revenues, operating income,
net income and net income per share amounts or other
amounts constituting such "capsule" information and
described in such letter (i) do not agree with the
corresponding amounts set forth in the unaudited
consolidated financial statements; or (ii) were not
determined on a basis substantially consistent with
that of the corresponding amounts in the audited
statements of income;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of such letter, there
was any change in the capital stock or any increase
in short-term indebtedness or long-term debt of the
Company and its consolidated subsidiaries or, at the
date of the latest available balance sheet read by
such accountants, there was any decrease in
consolidated net current assets or net assets, as
compared with amounts shown on the latest balance
sheet included in the Prospectus; or
(D) for the period from the closing date of
the latest income statement included in the
Prospectus to the closing date of the latest
available income statement read by such accountants
there were any decreases, as compared with the
corresponding period of the previous year, in
consolidated operating revenues, operating income or
in net income;
except in all cases set forth in clauses (C) and (D)
above for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or
which are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Prospectus (in each
case to the extent that such dollar amounts, percentages and
other financial information are derived from the general
accounting records of the Company and its subsidiaries subject
to the internal controls of the Company's accounting system or
are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in
such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed
included in the Prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission
in accordance with the Rules and Regulations and Section 5(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or the Underwriter, shall be contemplated
by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the financial
condition, business, properties or results of operations of the Company
and its subsidiaries taken as one enterprise which, in the judgment of
the Underwriter, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Offered Securities; (ii) any downgrading in
the rating of any debt securities of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), or any public
7
announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
change in U.S. or international financial, political or economic
conditions or currency exchange rates or exchange controls as would in
the judgment of the Underwriter, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Offered
Securities, whether in the primary market or in respect of dealings in
the secondary market; (iv) any material suspension or material
limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company
on any exchange or in the over-the-counter market; (v) any banking
moratorium declared by U.S. Federal or New York authorities; (vi) any
major disruption of settlements of securities or clearance services in
the United States; or (vii) any attack on, outbreak or escalation of
hostilities or act of terrorism involving the United States, any
declaration of war by Congress or any other national or international
calamity or emergency if, in the judgment of the Underwriter, the
effect of any such attack, outbreak, escalation, act, declaration,
calamity or emergency makes it impractical or inadvisable to proceed
with completion of the public offering or the sale of and payment for
the Offered Securities.
(d) The Underwriter shall have received an opinion, dated the
Closing Date, of Locke Liddell & Sapp LLP, counsel for the Company, to
the effect that:
(i) The Indenture has been duly authorized, executed
and delivered by the Company and has been duly qualified under
the Trust Indenture Act; the Offered Securities have been duly
authorized; the Offered Securities have been duly executed by
the Company; the Indenture does, and the Offered Securities,
when authenticated by the Trustee and, issued and delivered in
the manner provided in the Indenture against payment of the
purchase price therefor in accordance with the terms of this
Agreement, will, constitute valid and legally binding
obligations of the Company enforceable in accordance with
their terms, except as (a) may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization,
moratorium or similar laws relating to or affecting creditors'
rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability; and the Offered
Securities conform, as to legal matters, in all material
respects, to the description thereof contained in the
Prospectus;
(ii) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
of the United States or the State of New York is required for
the consummation of the transactions contemplated by this
Agreement in connection with the issuance or sale of the
Offered Securities by the Company, except such as have been
obtained and made under the Act and the Trust Indenture Act
and such as may be required under state securities laws, as to
which such counsel need not opine;
(iii) The execution and delivery by the Company of,
and the performance by the Company of its obligations under
the Indenture and this Agreement, and the issuance and sale by
the Company of the Offered Securities and compliance with the
terms and provisions thereof will not violate any provision of
applicable United States federal law, New York law or Delaware
General Corporation Law, or the charter or bylaws of the
Company or the charter or bylaws of any Significant
Subsidiary, and the Company has full power and authority to
authorize, issue and sell the Offered Securities as
contemplated by this Agreement;
(iv) The Registration Statement has become effective
under the Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein, and to the knowledge of
such counsel, no stop order suspending the effectiveness of
the Registration Statement or any part thereof has been issued
and no proceedings for that purpose have been instituted or
are pending or contemplated under the Act, and the
Registration Statement, as of its effective date, the
Prospectus, as of the date of this Agreement, and any
amendment or supplement thereto, as of its date, complied as
to form in all material respects with the requirements of the
Act, the Trust Indenture Act and the Rules and
8
Regulations; in the course of the preparation by the Company
of the Prospectus (including documents incorporated by
reference therein), such counsel has participated in
conferences with certain of the officers and representatives
of the Company, the Company's independent accountants, the
Underwriter and counsel for the Underwriter at which the
Registration Statement and the Prospectus were discussed; no
facts have come to counsel's attention in the course of such
proceedings that have caused such counsel to believe that the
Registration Statement, as of its effective date, as of the
date of this Agreement or as of the Closing Date, or any
amendment thereto, as of its date or as of the Closing Date,
contained any 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 or
that the Prospectus, as of the date of this Agreement or as of
such Closing Date, or any amendment or supplement thereto, as
of its date or as of the Closing Date, contained any untrue
statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; the descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate in all material
respects and fairly present in all material respects the
information required to be shown; and such counsel does not
know of any legal or governmental proceedings required to be
described in the Prospectus which are not described as
required or of any contracts or documents of a character
required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it
being understood that such counsel need express no opinion as
to the financial statements and schedules or other financial
data contained or incorporated by reference in the
Registration Statement or the Prospectus;
(v) Each document, if any, filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus
(except for financial statements and schedules and other
financial or statistical data included or incorporated by
reference therein or omitted therefrom as to which such
counsel need not express any opinion) appeared on its face to
be appropriately responsive in all material respects with the
Exchange Act; and the Registration Statement and Prospectus
(except for financial statements and schedules and other
financial data included or incorporated by reference therein
or omitted therefrom as to which such counsel need not express
any opinion) appeared on their face to be appropriately
responsive in all material respects with the requirements of
the Act;
(vi) This Agreement has been duly authorized,
executed and delivered by the Company; and
(vii) The Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, will not
be, (i) an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended, or (ii) a "holding
company" within the meaning of, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as
amended, and the rules and regulations promulgated by the
Commission thereunder.
(e) The Underwriter shall have received from David Siddell as
Special Counsel for the Company, an opinion, dated the Closing Date, to
the effect that:
(i) Each of the Company and its Significant
Subsidiaries has been duly incorporated, is validly existing
as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus, and each
is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except where the failure
to be so qualified or to be in good standing, individually or
in the aggregate, would not have a material adverse effect on
the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a
whole.
9
(ii) The execution, delivery and performance of this
Agreement, the Indenture and the Securities by the Company,
the compliance by the Company with all the provisions hereof
and thereof and the consummation of the transactions
contemplated hereby and thereby will not, to such counsel's
knowledge, (A) violate any indenture, loan agreement,
mortgage, lease or other agreement or instrument to which the
Company or any Significant Subsidiary is a party or by which
the Company or any subsidiary or their respective property is
bound or (B) violate or conflict with any judgment, order or
decree of any court or any governmental body or agency having
jurisdiction over the Company, any subsidiary or their
respective property, except in each case, for such violations
as would not have a material adverse effect on the business,
prospects, financial condition or results of operation of the
Company and its subsidiaries, taken as a whole.
(iii) To such counsel's knowledge after due inquiry,
there are no legal or governmental proceedings required to be
described in the Prospectus which are not described as
required or of any contracts or documents of a character
required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it
being understood that such counsel need express no opinion as
to the financial statements or schedules or other financial
data contained in the Registration Statement or the
Prospectus.
(iv) The statements under (A) the caption "Item 3 -
Legal Proceedings" of the Company's most recent annual report
on Form 10-K incorporated by reference into the Prospectus,
(B) the caption "Item 1 - Legal Proceedings" of Part II of the
Company's quarterly reports on Form 10-Q filed since such
annual report, in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present as of the date
of the applicable report the information disclosed therein in
all material respects.
(v) (A) The execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not violate any provisions of any
applicable laws and regulations specifically governing the
generation, transportation, distribution or delivery of
natural gas, oil, electricity or other related commodities or
services, including pipelines, transmission lines, storage
facilities and related facilities and equipment, or the import
or export of such commodities or services (collectively, the
"ENERGY INDUSTRY") and (B) no consent, approval, authorization
or order of or qualification with any United States federal
body or agency specifically regulating the Energy Industry is
required for the performance by the Company of its obligations
under this Agreement, except in each of the foregoing cases
for such violations or failures to obtain such consent,
approval, authorization, order or qualification as would not
have a material adverse effect on the business, prospects,
financial condition or results of operation of the Company and
its subsidiaries, taken as a whole.
(f) The Underwriter shall have received from Andrews & Kurth
Mayor, Day, Caldwell & Keeton L.L.P., counsel for the Underwriter, such
opinion or opinions, dated such Closing Date, with respect to the
incorporation of the Company, the validity of the Offered Securities
delivered on such Closing Date, the Registration Statement, the
Prospectus and other related matters as the Underwriter may require,
and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters.
(g) The Underwriter shall have received a certificate, dated
the Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
the Company in this Agreement are true and correct, that the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date, that no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated
by the Commission and that, subsequent to the date of the most recent
financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective
material
10
adverse change, in the financial condition, business, properties or
results of operations of the Company and its subsidiaries, taken as a
whole, except as set forth in or contemplated by the Prospectus or as
described in such certificate.
(h) The Underwriter shall have received a letter, dated such
Closing Date, of PricewaterhouseCoopers LLP which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three days prior to such Closing Date for the purposes of this
subsection.
The Company will furnish the Underwriter with such conformed copies of such
opinions, certificates, letters and documents as the Underwriter reasonably
requests. CSFBC may in its sole discretion waive compliance with any conditions
to the obligations of the Underwriter hereunder.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless the Underwriter, its partners, directors and officers and each
person, if any, who controls the Underwriter within the meaning of Section 15 of
the Act, against any losses, claims, damages or liabilities, joint or several,
to which the Underwriter may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any preliminary prospectus or
preliminary prospectus supplement related to the Offered Securities, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Underwriter for any legal or
other expenses reasonably incurred by the Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter specifically for use therein, it being understood and
agreed that the only such information furnished by the Underwriter consists of
the information described as such in subsection (b) below; and provided,
further, that with respect to any untrue statement or alleged untrue statement
in or omission or alleged omission from any preliminary prospectus or
preliminary prospectus supplement related to the Offered Securities, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of the Underwriter from whom the person asserting such losses, claims,
damages or liabilities purchased the Offered Securities concerned, to the extent
that a prospectus relating to such Offered Securities was required to be
delivered by the Underwriter under the Act in connection with such purchase and
any such loss, claim, damage or liability of the Underwriter results from the
fact that there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus (exclusive of material incorporated by reference) if the Company
had previously furnished copies thereof to the Underwriter.
(b) The Underwriter will indemnify and hold harmless the
Company, its directors and officers and each person, if any who
controls the Company within the meaning of Section 15 of the Act,
against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or preliminary prospectus supplement, or arise
out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by the
Underwriter specifically for use therein, and will reimburse any legal
or other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, it being understood and agreed
that the only such information furnished by the Underwriter consists of
the following information in the Prospectus furnished on behalf of the
Underwriter: the third paragraph under the caption "Underwriting," the
second and third sentences in the fifth paragraph under the caption
"Underwriting" and the information contained in the paragraphs related
to stabilizing
11
transactions, over-allotment transactions, syndicate covering
transactions and penalty bids under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of
such indemnified party from all liability on any claims that are the
subject matter of such action and (ii) does not include a statement as
to, or an admission of, fault, culpability or a failure to act by or on
behalf of an indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand
and the Underwriter on the other from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriter on
the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriter 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 bear to
the total underwriting discounts and commissions received by the
Underwriter. 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 or the Underwriter
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), the Underwriter shall not be required to contribute any
amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which the
Underwriter 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 Underwriter's
obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be
in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls the Underwriter within the meaning of the Act; and
the obligations of the Underwriter under this Section 7 shall be in
addition to any liability which the Underwriter may otherwise have and
12
shall extend, upon the same terms and conditions, to each director of
the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Underwriter set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated or if
for any reason the purchase of the Offered Securities by the Underwriter is not
consummated, the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 5 and the respective obligations of the
Company and the Underwriter pursuant to Section 7 shall remain in effect, and if
any Offered Securities have been purchased hereunder the representations and
warranties in Section 2 and all obligations under Section 5 shall also remain in
effect. If the purchase of the Offered Securities by the Underwriter is not
consummated for any reason other than solely because of the occurrence of any
event specified in clause (iii), (iv) or (v) of Section 6(c), the Company will
reimburse the Underwriter for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
9. Notices. All communications hereunder will be in writing and, if
sent to the Underwriter, will be mailed, delivered or sent by facsimile and
confirmed to Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention:
Transactions Advisory Group, or, if sent to the Company, will be mailed,
delivered or sent by facsimile and confirmed to it at 1001 Louisiana Street,
Houston, Texas 77002, Attention: Legal Department.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction
of the Federal and state courts in the Borough of Manhattan in The City of New
York in any suit or proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
13
If the foregoing is in accordance with the Underwriter's
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the Underwriter.
Very truly yours,
TENNESSEE GAS PIPELINE COMPANY
By /s/ Greg G. Gruber
-----------------------------------
Name Greg G. Gruber
------------------------------------
Title Senior Vice President and
Chief Financial Officer
----------------------------------
If the foregoing Underwriting Agreement is hereby confirmed and accepted as of
the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Paul Davis
-----------------------------------
Paul Davis, Director
14
SCHEDULE A
None.
Schedule A-1