EXHIBIT 10.1
EXECUTION COPY
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
$325,000,000 8.875% Notes due July 15, 2012
PURCHASE AGREEMENT
June 28, 2002
To the Initial Purchasers
listed on Schedule I hereto
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, NY, 10013
Ladies and Gentlemen:
Transcontinental Gas Pipe Line Corporation, a Delaware corporation,
(the "COMPANY"), proposes to issue and sell to the several initial purchasers
listed on Schedule I hereto (the "INITIAL PURCHASERS", individually the "INITIAL
PURCHASER"), $325,000,000 aggregate principal amount of its 8.875% Notes due
2012 (the "Securities"), to be issued pursuant to the provisions of an Indenture
to be dated as of July 3, 2002 (the "INDENTURE"), between the Company and
Citibank, N.A. (the "TRUSTEE"). The Securities will be entitled to the benefits
of a registration rights agreement to be dated July 3, 2002 between the Company
and the Initial Purchasers (the "REGISTRATION RIGHTS AGREEMENT").
The Company hereby confirms its agreement with the Initial Purchasers
to issue and sell all of the Securities to the Initial Purchasers, on the terms
and conditions set forth herein.
The Securities will be offered and sold to the Initial Purchasers,
without registration under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), in reliance upon an exemption from the registration
requirements of the Securities Act.
In connection with the sale of the Securities, the Company has prepared
and delivered to the Initial Purchasers a preliminary confidential offering
memorandum, dated June 28, 2002 (together with all documents incorporated by
reference therein, the "PRELIMINARY OFFERING MEMORANDUM") and has prepared
and will deliver to the Initial Purchasers on the date hereof or as soon as
practicable thereafter, copies of a final confidential memorandum, dated June
28, 2002 (together with all amendments and supplements thereto, and together
with all documents incorporated by reference therein, the "FINAL OFFERING
MEMORANDUM"), relating to the Securities. The Preliminary Offering Memorandum
and the Final Offering Memorandum are sometimes collectively referred to herein
as the "Offering Memorandum." All references in this Agreement to the Offering
Memorandum include the documents incorporated by reference therein. The Company
hereby confirms that it has authorized the use of the Offering Memorandum in
connection with the offer and sale of the Securities.
The Company understands that the Initial Purchasers propose to make
offerings ("EXEMPT RESALES") of the Securities only on the terms and in the
manner set forth in the Offering Memorandum and Section 3 hereof, as soon as the
Initial Purchasers deem advisable after this Agreement has been executed and
delivered only (i) to persons in the United States whom the Initial Purchasers
reasonably believe to be "qualified institutional buyers" ("QIBS") as defined in
Rule 144A under the Securities Act, as such rule may be amended from time to
time ("RULE 144A"), or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchasers that each such
account is a QIB to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A or (ii) in offshore transactions to non-U.S.
persons in reliance on Regulation S under the Securities Act ("REGULATION S").
S
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Initial Purchasers that as of
the date hereof and at the Closing Date (as defined herein):
(a) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Offering Memorandum and
is duly qualified to do 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 to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the financial condition, results of
operations or business of the Company and its subsidiaries, taken as a
whole (a "MATERIAL ADVERSE EFFECT");
(b) Each of the subsidiaries of the Company (the
"SUBSIDIARIES" or "SUBSIDIARY") has been duly organized or validly
formed, is validly existing and in good standing under the laws of the
jurisdiction of its
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formation or incorporation, has the power (corporate or other) and
authority to own its property and to conduct its business as described
in the Offering Memorandum and is duly qualified to do 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 to the extent that the failure to be so qualified
or be in good standing would not have a Material Adverse Effect;
(c) Each of the Company and its Subsidiaries has all consents,
authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, and all courts or
other tribunals (collectively the "LICENSES") necessary to own, hold,
or lease, as the case may be, and to operate its properties and to
carry on its business as presently conducted, except where the failure
to possess such Licenses could not reasonably be expected to have a
Material Adverse Effect, and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to
revocation or modification of any such Licenses;
(d) The Company has an authorized capitalization as set forth
in the Final Offering Memorandum and all of the issued shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and conform to the
description thereof in the Final Offering Memorandum; and all of the
issued shares of capital stock of each Subsidiary (in the case of each
Subsidiary which is a corporation) have been duly authorized and
validly issued and are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) Each of the Company and its Subsidiaries (i) is in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) has received
all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except, with respect to (i), (ii) and (iii), as may be
disclosed in the Offering Memorandum and except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a Material Adverse Effect;
(f) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical
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wastes, hazardous wastes or hazardous substances by the Company or any
of its Subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or its Subsidiaries in
violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except as may be disclosed in the Offering Memorandum
and except for any violation or remedial action which would not have,
or could not be reasonably likely to have, singularly or in the
aggregate, a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or any
of its Subsidiaries or with respect to which the Company or any of its
Subsidiaries have knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not
have or would not be reasonably likely to have, singularly or in the
aggregate, a Material Adverse Effect; and the terms "hazardous wastes",
"toxic wastes", "hazardous substances" and "medical wastes" shall have
the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection;
(g) The Company has filed all material tax returns which are
required to be filed by it and has paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Company, except
where the same may be contested in good faith by appropriate
proceedings, and where the Company has maintained in accordance with
generally accepted accounting principles appropriate reserves for the
accrual of any of the same. The charges, accruals and reserves on the
books of the Company in respect of taxes or other governmental charges
are, in the opinion of the Company, adequate;
(h) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended;
(i) Assuming due authorization, execution and authentication
by the Trustee, the Indenture, when duly executed and delivered by the
Company, will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
creditors' rights
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generally and (ii) rights of acceleration, if any, enforceability and
the availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether considered
in a proceeding in equity or at law). The Indenture conforms in all
material respects to the description thereof in the Offering
Memorandum;
(j) The Securities have been duly authorized by the Company
and, when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms,
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) rights of acceleration,
if any, enforceability and the availability of equitable remedies may
be limited by equitable principles of general applicability (regardless
of whether considered in a proceeding in equity or at law);
(k) The Securities constitute unsecured and unsubordinated
obligations of the Company and rank pari passu without any preference
among themselves; the Securities rank pari passu with all other
unsecured and unsubordinated debt obligations of the Company other than
any unsubordinated debt obligations which rank junior to the
Securities;
(l) Each of this Agreement and the Registration Rights
Agreement has been duly authorized by the Company and, when duly
executed and delivered by the Company, and assuming due authorization,
execution and delivery by the representatives on behalf of the Initial
Purchasers, will be a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally or is subject to general principles of
equity (regardless of whether considered in a proceeding in equity or
at law) and except as rights to indemnification and contribution
thereunder may be limited by applicable law;
(m) The execution and delivery by the Company of this
Agreement and the Registration Rights Agreement, the issuance and
delivery of the Securities, the consummation by the Company of the
transactions contemplated herein and the compliance by the Company with
the terms of this Agreement, the Indenture, the Securities and the
Registration Rights Agreement have been duly authorized by all
necessary
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corporate action on the part of the Company and do not and will not
result in any violation of the charter or by-laws of the Company, and
do not and will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound (except for such conflicts, breaches or defaults that could not
reasonably be expected to have a Material Adverse Effect), nor does or
will such action result in any violation of any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issuance and sale of the Securities by the Company to the Initial
Purchasers as contemplated by this Agreement;
(n) Neither the Company nor any of its Subsidiaries is in
violation of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contracts, indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party, except for any such violation or default that would not
singularly or in the aggregate have a Material Adverse Effect;
(o) The Company has filed all documents with the Securities
and Exchange Commission (the "COMMISSION") that it is required to file
under the Securities Act and the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), as applicable, and the rules and
regulations of the Commission thereunder, and such documents conformed
in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and at the time so filed none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and each document so filed or to be
filed and incorporated by reference in the Offering Memorandum or any
further amendment or supplement thereto, complied or will comply when
so filed in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder 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 not
misleading;
(p) The Offering Memorandum (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto)
does not as of the time hereof and will not, as of the Closing Date,
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contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not be
made to the Initial Purchasers with regard to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by, or on behalf of, the Initial
Purchasers;
(q) Neither the Company nor any of its Subsidiaries has
sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Offering Memorandum, any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, which would
result in any Material Adverse Effect, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Offering
Memorandum, and, since the respective dates as of which information is
given in the Offering Memorandum or since the date of the Offering
Memorandum, there has not been any change in the capital stock or
long-term debt of the Company or any of its Subsidiaries, or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholder's equity or results of
operations of the Company and its Subsidiaries, taken as a whole,
otherwise than as disclosed in the Offering Memorandum;
(r) The consolidated financial statements filed with or as
part of any document filed with the Commission present fairly in all
material respects the financial position, results of operations and
changes in financial position of the Company and its subsidiaries at
the dates and for the periods indicated, all in conformity with
generally accepted accounting principles; and the Company has no
material contingent obligation which is not disclosed in such financial
statements or in the Offering Memorandum;
(s) Other than as set forth or incorporated by reference in
the Offering Memorandum, there is no action, suit or proceeding before
or by any government, governmental instrumentality or court, domestic
or foreign, now pending or, to the knowledge of the Company, threatened
against or affecting the Company that could reasonably be expected to
result in any Material Adverse Effect, or that could reasonably be
expected to adversely affect the consummation of the transactions
contemplated in this Agreement;
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(t) Assuming the accuracy of the representations, warranties
and agreements of the Initial Purchasers in Section 2 hereof,
compliance by the Initial Purchasers with the offering and transfer
procedures and restrictions described in the Offering Memorandum, the
accuracy of the representations and warranties deemed to be made in the
Offering Memorandum by purchasers to whom the Initial Purchasers
initially resell the Securities and that purchasers to whom the Initial
Purchasers initially resell the Securities receive a copy of the
Offering Memorandum prior to such sale, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Initial Purchasers or in connection with the initial resale of the
Securities by the Initial Purchasers, in each case, in the manner
contemplated by this Agreement and the Offering Memorandum to register
the Securities under the Securities Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended;
(u) The Company, its affiliates and any person acting on its
or their behalf (other than the Initial Purchasers in connection with
the transactions contemplated hereby, about which the Company makes no
representation) have not, directly or indirectly:
(i) engaged in any directed selling efforts (within
the meaning of Regulation S under the Securities Act) with
respect to the Securities;
(ii) offered or sold the Securities in the United
States by any form of general solicitation or general
advertising (within the meaning of Regulation D under the
Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; or
(iii) sold, solicited any offers to buy or offered to
sell or otherwise negotiated in respect of any security in a
manner that would require registration of the Securities under
the Securities Act in accordance with the theory of
"integration" referred to in Regulation D under the Securities
Act.
(v) Assuming the accuracy of the Initial Purchasers'
representations and warranties and the compliance by the Initial
Purchasers with their agreements made herein, the Securities offered
and sold in reliance on Regulation S have been and will be offered and
sold only in offshore transactions, and the sale of the Securities
pursuant to Regulation S is not part of a plan or scheme to evade the
registration provisions of the Securities Act;
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(w) The Securities satisfy the requirements of Rule 144A(d)(3)
under the Securities Act;
(x) The Final Offering Memorandum will contain the information
regarding the Company specified in, and which satisfies the
requirements of, Rule 144A(d)(4) under the Securities Act; and
(y) Ernst & Young LLP, who have audited certain consolidated
financial statements of the Company, are independent public accountants
as required by the Securities Act and the rules and regulations of the
Commission thereunder.
The Company (i) acknowledges that the Initial Purchasers and,
for purposes of the opinions to be delivered to each Initial Purchaser
pursuant hereto, counsel to the Company and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and (ii) hereby consents to such reliance.
2. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS. Each
Initial Purchaser, severally and not jointly, hereby represents and warrants to,
and agrees with the Company that: each Initial Purchaser (i) is a QIB with such
knowledge and experience in financial and business matters as are necessary to
evaluate the merits and risks of an investment in the Securities; (ii) is not
acquiring the Securities with a view to any distribution thereof that would
violate the Securities Act or the securities or blue sky laws of any state or
country, (iii) has received all information it considers necessary to evaluate
the merits and risks of an investment in the Securities, (iv) has not and will
not solicit offers for, or offer to sell, the Securities by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act, or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act; and (v) has and will solicit
offers for the Securities only from, and will offer, sell or deliver the
Securities, as part of their initial offering, only (A) to persons in the United
States whom the Initial Purchasers reasonably believes to be QIBs or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
the Initial Purchasers that each such account is a QIB to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A or (B)
in offshore transactions to non-U.S. persons in reliance on Regulation S.
Each Initial Purchaser, severally and not jointly, hereby represents
and warrants to, and agrees with the Company that:
(i) such Initial Purchaser and its affiliates or any person
acting on its or their behalf have not engaged or will not engage in
any directed selling efforts within the meaning of Regulation S with
respect to the Securities;
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(ii) the Securities offered and sold by such Initial Purchaser
pursuant hereto in reliance on Regulation S have been and will be
offered and sold only in offshore transactions;
(iii) the sale of the Securities offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not
part of a plan or scheme to evade the registration provisions of the
Securities Act;
(iv) such Initial Purchaser has not offered or sold and will
not offer or sell the Securities in the United States or to, or for the
benefit or account of, a U.S. Person (other than a distributor), in
each case, as defined in Rule 902 under the Securities Act (a) as part
of its distribution at any time and (b) otherwise until 40 days after
the later of the commencement of the offering of the Securities
pursuant hereto and the Closing Date, other than in accordance with
Regulation S of the Securities Act or another exemption from the
registration requirements of the Securities Act;
(v) it has (A) not offered or sold and, prior to the date six
months after the Closing Date, will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom within
the meaning of the Public Offers of Securities Regulations 1995, (B)
only communicated any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial Services
and Markets Act 2000 (the "FSMA")) received by it in connection with
the issue or sale of any Securities in circumstances in which Section
21(1) of the FSMA does not apply to the Company, and (C) complied and
will comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom;
(vi) at or prior to confirmation of a sale of Securities by
such Initial Purchaser pursuant hereto in reliance on Regulation S to
any distributor, dealer or person receiving a selling concession, fee
or other remuneration during the 40-day restricted period referred to
in Rule 903(b)(2) under the Securities Act, it will send to such
distributor, dealer or person receiving a selling concession, fee or
other remuneration a confirmation or notice to substantially the
following effect:
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"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of your distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the Offering and the Closing Date, except in either
case in accordance with Regulation S under the Securities Act or Rule
144A in transactions that are exempt from the registration requirements
of the Securities Act, and in connection with any subsequent sale by
you of the Securities covered hereby in reliance on Regulation S during
the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you must
deliver a notice to substantially the foregoing effect. Terms used
above have the meanings assigned to them in Regulation S."
The Initial Purchasers (i) acknowledge that the Company and, for
purposes of the opinions to be delivered to each Initial Purchaser pursuant
hereto, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and (ii) hereby
consent to such reliance.
3. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to sell
and each Initial Purchaser, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from the Company the respective principal
amounts of Securities set forth in Schedule I hereto opposite its name at 96.70%
of their principal amount (the "PURCHASE PRICE") plus accrued interest, if any,
from July 3, 2002 to the date of payment and delivery.
4. PAYMENT AND DELIVERY. Payment for the Securities shall be made by
wire or other immediately available funds to the order of the Company to a bank
account designated by the Company at 10:00 A.M., New York time, on July 3, 2002,
or at such other time on the same or such other date, as shall be agreed by the
parties and designated in writing by the Initial Purchasers. The time and date
of such payment are herein referred to as the "CLOSING DATE."
Payment for the Securities shall be made against delivery to the
Initial Purchasers of the one or more global notes representing the Securities
(collectively, the "GLOBAL NOTE") registered in the name of Cede & Co. (the
"GLOBAL HOLDER") with any transfer taxes payable in connection with the transfer
of the Securities to the Initial Purchasers duly paid. Such Global Note shall be
made available to the Initial Purchasers for checking at least twenty four hours
prior to the Closing Date, at the offices of Davis Polk & Wardwell, New York,
New York.
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5. CONDITIONS TO THE INITIAL PURCHASERS' OBLIGATIONS. The obligations
of the Initial Purchasers are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been received of (A) any intended or
potential downgrading or (B) any review or possible change
that does not indicate the direction of a possible change, in
the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Act; and
(ii) there shall not have occurred any material
adverse change, or any development which could reasonably be
expected to result in a prospective material adverse change,
in the financial condition, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Final Offering Memorandum.
(b) The Initial Purchasers shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in clauses (a)(i) and
(ii) above and to the effect that the representations and warranties of
the Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate
may rely upon the best of his or her knowledge as to proceedings
threatened.
(c) The Initial Purchasers shall have received on the Closing
Date an opinion of William G. von Glahn, Esq., Senior Vice President
and General Counsel of The Williams Companies, Inc., dated the Closing
Date, with such exceptions and qualifications as shall be agreed by the
Initial Purchasers, to the effect set forth in Exhibit A.
The opinion of William G. von Glahn, Esq. described in Exhibit
A shall be rendered to the Initial Purchasers at the request of the
Company and shall so state therein.
(d) The Initial Purchasers shall have received on the Closing
Date an opinion from Andrews & Kurth LLP, special counsel for the
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Company, dated the Closing Date, with such exceptions and
qualifications as shall be agreed by the Initial Purchasers, to the
effect set forth in Exhibit B.
(e) The Initial Purchasers shall have received on the Closing
Date an opinion of Davis Polk & Wardwell, counsel for the Initial
Purchasers, dated the Closing Date, covering the matters referred to in
subparagraph (ix) of Exhibit A, and such other matters as shall be
agreed by the Initial Purchasers.
With respect to subparagraph (ix) of Exhibit A, Davis
Polk & Wardwell may state that their opinion and belief are based upon
their participation in the preparation of the Offering Memorandum
(excluding any documents incorporated by reference therein) and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification,
except as specified. Davis Polk & Wardwell may also state that they
have relied solely on the opinion of William G. von Glahn, Esq., as to
matters relating to the regulation of the Company by the Federal Energy
Regulatory Commission.
(f) The Initial Purchasers shall have received on the Closing
Date a letter, in form and substance satisfactory to the Initial
Purchasers, from Ernst & Young LLP, independent public accountants,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained or
incorporated by reference in the Offering Memorandum.
(g) The Initial Purchasers and the Company shall have validly
entered into the Registration Rights Agreement, substantially in the
form of Exhibit C hereto.
6. COVENANTS OF THE COMPANY. In further consideration of the agreements
of the Initial Purchasers herein contained, the Company, its affiliates and any
person acting on its or their behalf, covenant with the Initial Purchasers as
follows:
(a) The Company, its affiliates and any person acting on its
or their behalf will not, directly or indirectly:
(i) engage in any directed selling efforts (within
the meaning of Regulation S under the Securities Act) with
respect to the Securities;
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(ii) offer or sell the Securities in the United States
by any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act)
or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; or
(iii) sell, solicit any offers to buy or offer to sell
or otherwise negotiate in respect of any security in a manner
that would require registration of the Securities under the
Securities Act in accordance with the theory of "integration"
referred to in Regulation D under the Securities Act.
(b) While any Security remains outstanding, during any period
in which the Company is not subject to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934, as amended, and its securities are
not exempt from Section 12(g) thereof pursuant to Rule 12g3-2(b)
thereunder, the Company will upon request make available to the Initial
Purchasers, to any holder of Securities, and to any prospective
purchaser designated by any holder of Securities, the information
regarding the Company specified in, and satisfying the requirements of,
Rule 144A(d)(4) under the Securities Act.
(c) The Company will prepare the Final Offering Memorandum in
a form approved by the Initial Purchasers, and before amending or
supplementing the Final Offering Memorandum, will furnish to Salomon
Smith Barney Inc. on behalf of the Initial Purchasers a copy of each
such proposed amendment or supplement and will not prepare any such
proposed amendment or supplement to which the Initial Purchasers
reasonably object.
(d) As soon as practicable but in no event later than the New
York Business Day (as defined below) next succeeding the date of this
Agreement and from time to time during the period that in the opinion
of counsel for the Initial Purchasers a Final Offering Memorandum is
required by law to be delivered in connection with Exempt Resales by
the Initial Purchasers, the Company will furnish the Initial
Purchasers, in New York City, with copies of the Final Offering
Memorandum and each amendment or supplement thereto, together with any
independent accountants' report contained in the Final Offering
Memorandum, and any amendment or supplement containing amendments to
the financial statements covered by such report, signed by the
accountants, and additional copies thereof in such quantities as the
Initial Purchasers from time to time reasonably request, and if, at any
time prior to the consummation of any Exempt Resale, any event shall
have occurred as a result of which the Final Offering Memorandum as
then amended or
14
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 the light of the circumstances under which they
were made when such Final 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 Final
Offering Memorandum, the Company will notify the Initial Purchasers and
upon the Initial Purchaser's request to prepare and furnish without
charge to the Initial Purchasers and to any dealer in securities as
many copies as the Initial Purchasers may from time to time reasonably
request of the amended Final Offering Memorandum or supplement to the
Final Offering Memorandum which will correct such statement or omission
or effect such compliance. For the purposes of this paragraph, "New
York Business Day" shall mean any day that is not a day on which
banking institutions in New York are generally authorized or required
by law or regulation to close;
(e) During the period beginning on the date hereof and
continuing to and including the Closing Date, the Company will not
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company or warrants to purchase debt securities of
the Company substantially similar to the Securities (other than the
Securities and commercial paper issued in the ordinary course of
business), without the prior written consent of the Initial Purchasers.
(f) The Company will arrange for the qualification of the
Securities for sale under the laws of such states in the United States
as the Initial Purchasers designate and will continue such
qualifications in effect so long as required for the resale of the
Securities by the Initial Purchasers; provided that the Company will
not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such state.
(g) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company
will pay all expenses incident to the performance of its obligations
under this Agreement, including: (i) expenses associated with the
preparation, printing and distribution of the Offering Memorandum and
all amendments and supplements thereto; (ii) the preparation, issuance
and delivery of the Securities; (iii) the fees and disbursements of the
Company's counsel and accountants and of the Trustee and its counsel;
(iv) the fees and disbursements of the Initial Purchasers' counsel; (v)
the costs of qualification of the Securities under state securities or
blue sky laws in accordance with the provisions of Section 6(f),
including filing fees and the fees and disbursements of counsel for the
Initial Purchasers in connection therewith and in connection with the
preparation of any blue
15
sky or legal investment memoranda; (vi) the costs of printing and
delivery to the Initial Purchasers in quantities as herein above stated
of copies of the Offering Memorandum and any amendments or supplements
thereto; (vii) the costs of printing and delivery to the Initial
Purchasers of copies of any blue sky or legal investment memoranda;
(viii) any fees charged by rating agencies for the rating of the
Securities; and (ix) any expenses incurred by the Company in connection
with a "road show" presentation to potential investors.
(h) To take all reasonable action necessary to enable Standard
& Poor's Rating Service, a division of McGraw Hill, Inc. ("S&P"), and
Moody's Investor Service, Inc. ("MOODY'S") to provide their respective
ratings of the Securities.
(i) To cooperate with the Initial Purchasers and use its
reasonable best efforts to permit the Securities to be eligible for
clearance and settlement through the facilities of The Depository Trust
Company.
7. COVENANTS OF THE INITIAL PURCHASERS.
(a) Each Initial Purchaser severally acknowledges that the
Securities have not been and will not be registered under the
Securities Act and severally agrees that it, its affiliates and any
person acting on its or their behalf:
(i) will not offer or sell the Securities in the
United States by any form of general solicitation or general
advertising (within the meaning of Regulation D under the
Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) if the Securities Act; and
(ii) will offer or sell the Securities only to
persons whom it reasonably believes to be qualified
institutional buyers ("QIBS") within the meaning of Rule 144A
under the Securities Act in compliance with Rule 144A or in
offshore transactions to non-U.S. persons in reliance on
Regulation S.
8. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls any of the
Initial Purchasers within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, any
legal or other expenses
16
reasonably incurred by any Initial Purchaser or any such controlling
person in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum or any amendment
thereof (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by 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 or liabilities are
caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to each Initial
Purchaser furnished to the Company in writing by the Initial Purchasers
expressly for use therein; provided however that the foregoing
indemnity agreement with respect to the Preliminary Offering Memorandum
shall not inure to the benefit of the Initial Purchasers, or any person
controlling any of the Initial Purchasers, if the person asserting any
such losses, claims, damages or liabilities purchased Securities, and a
copy of the Final Offering Memorandum (as then amended or supplemented
if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of the Initial
Purchasers to such person, at or prior to the written confirmation of
the sale of the Securities to such person, and if the Final Offering
Memorandum (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities.
(b) Each Initial Purchaser agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its
officers, its employees, its agents and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to each Initial Purchaser, but
only with reference to information relating to such Initial Purchaser
furnished to the Company in writing by each Initial Purchaser expressly
for use in the Offering Memorandum or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to either paragraph (a) or (b)
of this Section 8, such person (the "INDEMNIFIED PARTY") shall promptly
notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified
party shall have the
17
right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ
counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such proceeding (including any impeded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. Such firm shall be designated in writing by Salomon Smith Barney
Inc., in the case of the parties indemnified pursuant to Section 8(a),
and by the Company, in the case of parties indemnified pursuant to
Section 8(b). It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties and
that all such fees and expenses shall be reimbursed as they are
incurred. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding 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 includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such proceeding and does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of
the indemnified party.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 8 is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under
such paragraph, in lieu of
18
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and each Initial Purchaser on the other hand from the
offering and sale 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 of the Initial Purchasers on the other hand
in connection with the statements or omissions that 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 Initial Purchasers on the other hand in
connection with the offering of the Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering
of the Securities (before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Initial Purchasers, in each case as set forth in the Offering
Memorandum, bears to the aggregate initial offering price of the
Securities. The relative fault of the Company on the one hand and the
Initial Purchasers on the other hand 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 by the
Initial Purchasers and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
(e) The Company and the Initial Purchasers agree that it would
not be just or equitable if contribution pursuant to this Section 8
were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) of this Section 8. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or
appearing as a third party witness in any such action or claim.
Notwithstanding the provisions of this Section 8, the Initial
Purchasers shall not be required to contribute any amount in excess of
the amount by which the total price at which the Securities purchased
by it exceeds the amount of any damages that the Initial Purchasers
have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The remedies provided
for in this Section 8 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party
at law or in equity.
19
(f) The indemnity and contribution provisions contained in
this Section 8 and the representations, warranties and other statements
of the Company contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of the Initial
Purchasers or any person controlling the Initial Purchasers or by or on
behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of
the Securities.
9. TERMINATION. This Agreement shall be subject to termination by
notice given by the Initial Purchasers to the Company, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date any of
the events described in Section 5(a) shall have occurred or (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Transcontinental Gas Pipe Line Corporation or
The Williams Companies, Inc. shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities (including, without limitation, an act of terrorism) or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event, singly or together with any other such
event, makes it, in your judgment, impracticable to market the Securities on the
terms and in the manner contemplated in the Offering Memorandum. Notice of such
cancellation shall be given to the Company by telecopy or telephone but shall be
subsequently confirmed by letter.
10. EFFECTIVENESS; DEFAULTING INITIAL PURCHASERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Initial Purchasers shall fail or
refuse to purchase Securities that it has or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Initial Purchaser or Initial Purchasers agreed but failed or
refused to purchase is not more than one-tenth of the aggregate principal amount
of the Securities to be purchased on such date, the other Initial Purchasers
shall be obligated severally in the proportions that the principal amount of
Securities set forth opposite their respective names in Schedule I bear to the
principal amount of Securities set forth opposite the names of all such
non-defaulting Initial Purchasers, or in such other proportions as you may
specify, to purchase the
20
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase on such date; provided that in no event shall
the principal amount of Securities that any Initial Purchaser has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 10 by
an amount in excess of one-ninth of such principal amount of Securities without
the written consent of such Initial Purchaser. If, on the Closing Date, any
Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased on such date, and arrangements satisfactory
to you and the Company for the purchase of such Securities are not made within
36 hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Initial Purchaser or the Company. In any such
case either you or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, in the Offering Memorandum or in any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.
If this Agreement shall be terminated by the Initial Purchasers, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Initial Purchasers or such Initial
Purchasers as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Initial Purchasers in connection
with this Agreement or the offering contemplated hereunder.
Any notice under this Section 10 may be made by telecopy or telephone
but shall be subsequently confirmed by letter.
11. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. If this Agreement
shall be terminated by the Initial Purchasers because of any failure or refusal
on the part of the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company shall be unable
to perform its obligations under this Agreement, the Company will reimburse the
Initial Purchasers for all out-of-pocket expenses (including the fees and
disbursements of its counsel) reasonably incurred by the Initial Purchasers in
connection with this Agreement and the offering contemplated hereunder.
12. NOTICES. Except as otherwise provided notice given pursuant to any
of the provisions of this Agreement shall be in writing and shall be delivered
(a) if to the Company, at 2800 Post Oak Blvd., P.O. Box 1396, Houston, Texas
77251, Attention: Treasurer, or (b) if to the Initial Purchasers, at the offices
of Salomon
21
Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, or in any case to
such other address as the person to be notified may have requested in writing.
13. SUCCESSORS. The Agreement is made solely for the benefit of the
Initial Purchasers, the Company, their directors and officers and other
controlling persons referred to in Section 8 hereof, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser from the Initial Purchasers of
any of the Securities in his status as such purchaser.
14. PARTIAL UNENFORCEABILITY. If any section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other
section, paragraph or provision hereof.
15. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
16. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
17. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
22
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchasers.
Very truly yours,
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
By: /s/ Jeffrey P. Heinrichs
---------------------------------------
Name: Jeffrey P. Heinrichs
Title: Treasurer
Accepted as of the date hereof:
SALOMON SMITH BARNEY INC.
ABN AMRO INCORPORATED
BANC OF AMERICA SECURITIES LLC
COMMERZBANK CAPITAL MARKETS CORP.
CREDIT LYONNAIS SECURITIES (USA) INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
J.P. MORGAN SECURITIES INC.
THE ROYAL BANK OF SCOTLAND PLC
SCOTIA CAPITAL (USA) INC.
UBS WARBURG LLC
BANC ONE CAPITAL MARKETS, INC.
BARCLAYS CAPITAL INC.
MIZUHO INTERNATIONAL PLC
TD SECURITIES (USA) INC.
By: SALOMON SMITH BARNEY INC.
/s/ Anne Clarke Wolfe
-----------------------------
Name: Anne Clarke Wolff
Title: Managing Director
23
EXHIBIT A
OPINION OF WILLIAM G. VON GLAHN, ESQ.,
SENIOR VICE PRESIDENT AND GENERAL COUNSEL OF
THE WILLIAMS COMPANIES, INC.
(i) The Company and each of its Subsidiaries have been duly
incorporated (in the case of each Subsidiary that is a corporation) or otherwise
validly organized or validly formed and are validly existing in good standing
under the laws of their respective jurisdictions of formation or incorporation,
have the requisite power and authority to own their property and to conduct
their business as described in the Offering Memorandum and are duly qualified to
do business and are in good standing in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses requires such qualification, except to the extent such failure to be
qualified or in good standing would not have a material adverse effect on the
consolidated financial position, results of operations, business or prospects of
the Company and its subsidiaries, taken as a whole (a "MATERIAL ADVERSE
EFFECT"), and all of the issued shares of capital stock of each Subsidiary (in
the case of each Subsidiary that is a corporation) or membership interests (in
the case of each Subsidiary which is a limited liability corporation) have been
duly and validly authorized and issued and are fully paid, non-assessable and
are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(ii) the Company and its subsidiaries hold all franchises, certificates
of public convenience and necessity, consents, authorizations, approvals,
orders, permits, licenses and easements necessary to own, operate and maintain
its properties as described in the Offering Memorandum, subject only to such
defects, irregularities, restrictions, conditions and other matters as are
described in the Offering Memorandum or which do not materially affect the right
of the Company or its subsidiaries to own, operate and maintain its properties
and to conduct its business as described therein, and has made all declarations
and filings with, all federal, state, local and other governmental authorities,
and all courts or other tribunals, necessary to conduct its business in the
manner described in the Offering Memorandum, except to the extent that the lack
of such consents, authorizations, approvals, orders, certificates or permits
would not have a Material Adverse Effect;
(iii) neither the Company nor any of its Subsidiaries (i) is in
violation of its charter or bylaws, (ii) is in default in any material respect,
and no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition
A-1
contained in any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject or (iii) is in violation in
any material respect of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its property
or to the conduct of its business except as disclosed in the Offering
Memorandum, and in case of (ii) and (iii), for such defaults, violations, or
failures to obtain such authorizations or permits that have not had or are not
reasonably expected to have, a Material Adverse Effect;
(iv) each of the Purchase Agreement, the Registration Rights Agreement,
the Indenture and the Securities have been duly authorized, executed, and
delivered by the Company. The Purchase Agreement is a valid and binding
agreement of the Company, enforceable in accordance with its terms under the
laws of the State of New York, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles, and except as
rights to indemnity and contribution thereunder may be limited under applicable
law;
(v) the execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Registration Rights
Agreement, the Securities and the Indenture will not contravene any provision of
applicable law, or the Certificate of Incorporation or By-laws of the Company or
any agreement or other instrument binding upon the Company that is material to
the Company, or any judgment, order, decree of any governmental body, agency or
court having jurisdiction over the Company;
(vi) the Company has filed all documents with the Commission that it is
required to file under the Securities Act and the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder, and such documents
(other than the financial statements, including the notes thereto, and related
schedules therein, and the other financial and accounting data, as to which such
counsel need express no opinion) conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder;
(vii) except as set forth in the Company's filings with the Commission,
to the knowledge of such counsel, there are no legal or governmental proceedings
pending or threatened to which the Company is a party or to which any of the
properties of the Company is subject that are required to be described in the
documents incorporated by reference in the Offering Memorandum and are not so
described;
A-2
(viii) the Company is not, and following the consummation of the
transactions contemplated herein will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended; and
In addition, such counsel shall state that such counsel or personnel
under such counsel's supervision have participated in conferences with officers
and other representatives of the Company, representatives of the independent
auditors for the Company, your representatives and your counsel at which the
contents of the Offering Memorandum and related matters were discussed and,
although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained or incorporated by reference in the Offering Memorandum, on the basis
of the foregoing, no facts have come to such counsel's attention that have led
such counsel to believe that the Offering Memorandum, as of its date or as of
the Closing Date, contained or contains an untrue statement of material fact or
omitted or omits 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, except that such counsel need not express
an opinion or belief with respect to the financial statements, schedules and
other financial, statistical and accounting data included or incorporated by
reference in or excluded from the Offering Memorandum.
A-3
EXHIBIT B
OPINION OF ANDREWS & KURTH LLP
1. The Securities, when authenticated in accordance with the terms of
the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of the Purchase Agreement, will be valid and binding
obligations of the Company, enforceable against the Company in accordance with
the terms of the Securities and the Indenture under the laws of the State of New
York.
2. The Indenture is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms under the laws of
the State of New York.
3. The Securities and the Indenture conform in all material respects to
the descriptions thereof contained in the Offering Memorandum.
4. No consent, approval, authorization or other order of, or filing
with, any Governmental Authority is legally required under any Applicable Laws
of the State of New York or under any Applicable Laws of the United States of
America for the issuance or sale to the Initial Purchasers of the Securities as
contemplated by the Purchase Agreement.
5. The execution and delivery by the Company of the Purchase Agreement
and the Indenture and the issuance and sale of the Securities to the Initial
Purchasers as contemplated thereby and the performance of the Company's
obligations pursuant to the Purchase Agreement and the Indenture will not
conflict with or violate any Applicable Law of the State of New York or any
Applicable Law of the United States of America.
6. The Registration Rights Agreement is a valid and binding agreement
of the Company enforceable against the Company in accordance with its terms
under the laws of the State of New York.
7. The Indenture conforms in all material respects to the requirements
of the Trust Indenture Act of 1939, as amended (the "TIA"), and the rules and
regulations of the SEC applicable to an indenture that would be qualified
thereunder.
8. The information in the Offering Memorandum under the caption
"Description of the Notes- Terms and Conditions of the Notes" and "Exchange
Offer; Registration Rights" insofar as such information constitutes summaries
of
B-1
legal matters or certain provisions of the documents referred to therein, fairly
summarizes the matters referred to therein in all material respects.
9. Assuming (i) the accuracy of the representations and warranties of
the Company set forth in Section 1 of the Purchase Agreement, (ii) the due
performance by the Company of the covenants and agreements set forth in Section
6 of the Purchase Agreement, (iii) the compliance by the Initial Purchasers with
the offering and transfer procedures and the restrictions described in the
Offering Memorandum and their covenants and agreements in Sections 2 and 7 of
the Purchase Agreement, (iv) the accuracy of the representations and warranties
of the Initial Purchasers set forth in Section 2 of the Purchase Agreement, and
(v) and that purchasers to whom the Initial Purchasers initially resell the
Notes receive a copy of the Offering Memorandum prior to such sale, the offer,
sale and delivery of the Notes to the Initial Purchasers in the manner
contemplated by the Purchase Agreement and the Offering Memorandum and the
initial resale of the Notes by the Initial Purchasers in the manner contemplated
in the Offering Memorandum and the Purchase Agreement, do not require
registration under the Securities Act, and prior to the consummation of the
Exchange Offer or the effectiveness of the Shelf Registration Statement (as
defined in the Registration Rights Agreement), the Indenture does not require
qualification under the TIA, it being understood that such counsel expresses no
opinion as to any subsequent resale of any Note.
B-2
Schedule I
<Table>
<Caption>
Initial Purchaser Principal Amount Purchased
- -------------------------------------------------- --------------------------
Salomon Smith Barney Inc.......................... $ 97,500,000
ABN AMRO Incorporated............................. $ 19,500,000
Banc of America Securities LLC.................... $ 19,500,000
Commerzbank Capital Markets Corp.................. $ 19,500,000
Credit Lyonnais Securities (USA) Inc.............. $ 19,500,000
Credit Suisse First Boston Corporation............ $ 19,500,000
J.P. Morgan Securities Inc........................ $ 19,500,000
The Royal Bank of Scotland plc.................... $ 19,500,000
Scotia Capital (USA) Inc.......................... $ 19,500,000
UBS Warburg LLC................................... $ 19,500,000
Banc One Capital Markets, Inc..................... $ 13,000,000
Barclays Capital Inc.............................. $ 13,000,000
Mizuho International plc.......................... $ 13,000,000
TD Securities (USA) Inc........................... $ 13,000,000
$325,000,000
============
</Table>