EXHIBIT 1.1
$500 MILLION PRINCIPAL AMOUNT
EL PASO CORPORATION
7.875% SENIOR NOTES DUE 2012
PURCHASE AGREEMENT
June 4, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION,
As the Purchaser
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. El Paso Corporation, a Delaware corporation (the
"COMPANY"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Credit Suisse First Boston Corporation (the initial
"PURCHASER") U.S.$500,000,000 principal amount of its 7.875% Senior Notes due
2012 ("OFFERED SECURITIES") to be issued under an indenture, dated as of May 10,
1999 (as supplemented through the date hereof, the "ORIGINAL INDENTURE"),
between the Company and JPMorgan Chase Bank (formerly The Chase Manhattan Bank),
as Trustee, and as further supplemented by the Seventh Supplemental Indenture to
be dated as of June 10, 2002 (the "SEVENTH SUPPLEMENTAL INDENTURE" and together
with the Original Indenture, the "INDENTURE"). The United States Securities Act
of 1933, as amended, is herein referred to as the "SECURITIES ACT."
The holders of the Offered Securities will be entitled to the benefits
of a Registration Rights Agreement of even date herewith among the Company and
the Purchaser (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the
Company agrees to file a registration statement with the Securities Exchange
Commission (the "COMMISSION") registering the resale of the Offered Securities
under the Securities Act.
The Company hereby agrees with the Purchaser as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Purchaser that:
(a) An offering circular relating to the Offered Securities to
be offered by the Purchaser has been prepared by the Company. Such
offering circular (the "OFFERING CIRCULAR"), as supplemented as of the
date of this Agreement, together with the documents incorporated by
reference therein and any other document approved by the Company for
use in connection with the contemplated resale of the Offered
Securities are hereinafter collectively referred to as the "OFFERING
DOCUMENT". On the date of this Agreement, the Offering Document does
not include any 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, not misleading. The preceding
sentence does not apply to statements in or omissions from the Offering
Document based upon written information furnished to the Company by
Credit Suisse First Boston Corporation ("CSFBC") specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(b) hereof.
(b) Except as disclosed in the Offering Document, on the date
of this Agreement, the Company's Annual Report on Form 10-K most
recently filed with the Securities and Exchange Commission (the
"COMMISSION") and all subsequent reports (collectively, the "EXCHANGE
ACT REPORTS") which have been filed by the Company with the Commission
or sent to shareholders pursuant to the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), do not include any 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. Such
documents, when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
(c) 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 Offering Document; 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").
(d) Each significant subsidiary (as set forth on Schedule B
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 Offering Document; 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
(other than the shares of Series A Preferred Stock of El Paso Tennessee
Pipelines Co. that are listed on the New York Stock Exchange, Inc.);
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.
(e) The Original Indenture has been duly authorized, executed
and delivered; the Offered Securities have been duly authorized; and
when the Offered Securities are delivered and paid for pursuant to this
Agreement on the Closing Date (as defined below), the Seventh
Supplemental Indenture will have been duly executed and delivered, and
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 Offering Document; and the
Indenture and such Offered Securities will constitute valid and legally
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binding obligations of the Company, enforceable in accordance with
their 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.
(f) 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 United States Trust Indenture Act of 1939, as amended (the
"TRUST INDENTURE ACT"), and such as may be required under state
securities laws.
(g) The execution, delivery and performance of the Indenture,
this Agreement and the Registration Rights 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.
(h) This Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company.
(i) 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.
(j) Except as disclosed in the Offering Document, 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 Offering
Document, 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.
(k) Except as disclosed in the Offering Document, 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
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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 Offering Document, the Company is not aware of any pending
investigation which might lead to such a claim.
(l) Except as disclosed in the Offering Document, 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.
(m) The financial statements and other financial information
included or incorporated by reference in the Offering Document 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 Offering Document, 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 incorporated by reference in
the Offering Document present fairly the information required to be
stated therein.
(o) Except as disclosed in the Offering Document (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 Offering Document 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 Offering
Document, 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
Securities 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 Offering Document, will not be (i)
an "investment company" as defined in the Investment Company Act of
1940, as amended, (the "INVESTMENT COMPANY ACT") 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.
(r) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Offered Securities are
listed on any national securities exchange
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registered under Section 6 of the Exchange Act or quoted in a U.S.
automated inter-dealer quotation system.
(s) Assuming the accuracy of the representations and
warranties of the Purchaser contained in Section 4, the offer and sale
of the Offered Securities in the manner contemplated by this Agreement
will be exempt from the registration requirements of the Securities Act
by reason of Section 4(2) thereof, Regulation D thereunder and
Regulation S thereunder; and it is not necessary to qualify an
indenture in respect of the Offered Securities under the Trust
Indenture Act of 1939.
(t) Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf (i) has, within the six-month
period prior to the date hereof, offered or sold in the United States
or to any U.S. person (as such terms are defined in Regulation S under
the Securities Act) the Offered Securities, or any security of the same
class or series as the Offered Securities or (ii) has offered or will
offer or sell the Offered Securities (A) in the United States by means
of any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act or (B) with respect to
any such securities sold in reliance on Rule 903 of Regulation S
("REGULATION S") under the Securities Act, by means of any directed
selling efforts within the meaning of Rule 902(c) of Regulation S. The
Company, its affiliates and any person acting on its or their behalf
have complied and will comply with the offering restrictions
requirement of Regulation S. The Company has not entered and will not
enter into any contractual arrangement with respect to the distribution
of the Offered Securities except for this Agreement.
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
Purchaser, and the Purchaser agrees to purchase from the Company, at a purchase
price of 98.925% of the principal amount thereof, the principal amount of the
Offered Securities set forth opposite the name of the Purchaser in Schedule A
hereto.
The Company will deliver against payment of the purchase price the
Offered Securities to be offered and sold by the Purchaser in reliance on
Regulation S (the "REGULATION S SECURITIES") in the form of one or more
permanent global Securities in registered form without interest coupons (the
"REGULATION S GLOBAL SECURITIES") which will be deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") for the respective accounts
of the DTC participants for ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System ("EUROCLEAR"), and Clearstream
Banking, societe anonyme ("CLEARSTREAM, LUXEMBOURG") and registered in the name
of Cede & Co., as nominee for DTC. The Company will deliver against payment of
the purchase price the Offered Securities to be purchased by the Purchaser
hereunder and to be offered and sold by the Purchaser in reliance on Rule 144A
under the Securities Act (the "144A SECURITIES") in the form of one permanent
global security in definitive form without interest coupons (the "RESTRICTED
GLOBAL SECURITIES") deposited with the Trustee as custodian for DTC and
registered in the name of Cede & Co., as nominee for DTC. The Regulation S
Global Securities and the Restricted Global Securities shall be assigned
separate CUSIP numbers. The Restricted Global Securities shall include the
legend regarding restrictions on transfer set forth under "Transfer
Restrictions" in the Offering Document. Until the termination of the restricted
period (as defined in Regulation S) with respect to the offering of the Offered
Securities, interests in the Regulation S Global Securities may only be held by
the DTC participants for Euroclear and Clearstream, Luxembourg. Interests in any
permanent global Securities will be held only in book-entry
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form through Euroclear, Clearstream, Luxembourg or DTC, as the case may be,
except in the limited circumstances described in the Offering Document.
Payment for the Regulation S Securities and the 144A Securities shall
be made by the Purchaser in Federal (same day) funds by wire transfer to an
account at a bank acceptable to 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
Restricted Global Securities will be made available for checking at the office
of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ Mayor, Day, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. at least 24 hours prior
to the Closing Date.
4. Representations by Purchaser; Resale by Purchaser.
(a) The Purchaser represents and warrants to the Company that
it is an "accredited investor" within the meaning of Regulation D under
the Securities Act.
(b) The Purchaser acknowledges that the Offered Securities
have not been registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Regulation S or
pursuant to an exemption from the registration requirements of the
Securities Act. The Purchaser represents and agrees that it has offered
and sold the Offered Securities, and will offer and sell the Offered
Securities (i) as part of its distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 or Rule
144A under the Securities Act ("RULE 144A"). Accordingly, neither the
Purchaser nor its affiliates, nor any persons acting on its or their
behalf, have engaged or will engage in any directed selling efforts
with respect to the Offered Securities, and the Purchaser, its
affiliates and all persons acting on its or their behalf have complied
and will comply with the offering restrictions requirement of
Regulation S. The Purchaser agrees that, at or prior to confirmation of
sale of the Offered Securities, other than a sale pursuant to Rule
144A, the Purchaser will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that
purchases the Offered Securities from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933 (the
"Securities Act") and may not be offered or sold
within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40
days after the later of the date of the commencement
of the offering and the closing date, except in
either case in accordance with Regulation S (or Rule
144A if available) under the Securities Act. Terms
used above have the meanings given to them by
Regulation S."
Terms used in this subsection (b) have the meanings given to them by
Regulation S.
(c) The Purchaser agrees that it and each of its affiliates
has not entered and will not enter into any contractual arrangement
with respect to the distribution of the Offered Securities except with
the prior written consent of the Company.
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(d) The Purchaser agrees that it and each of its affiliates
will not offer or sell the Offered Securities in the United States by
means of any form of general solicitation or general advertising within
the meaning of Rule 502(c) under the Securities Act, including, but not
limited to (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting
whose attendees have been invited by any general solicitation or
general advertising. The Purchaser agrees, with respect to resales made
in reliance on Rule 144A of any of the Offered Securities, to deliver
either with the confirmation of such resale or otherwise prior to
settlement of such resale a notice to the effect that the resale of
such Offered Securities has been made in reliance upon the exemption
from the registration requirements of the Securities Act provided by
Rule 144A.
(e) The Purchaser represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of
issue of the Offered Securities will not offer or sell any Offered
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;
(ii) it has complied and will comply with all applicable provisions of
the Financial Services ▇▇▇ ▇▇▇▇ with respect to anything done by it in
relation to the Offered Securities in, from or otherwise involving the
United Kingdom; and (iii) it has only issued or passed on and will only
issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Offered Securities to a person who is
of a kind described in Article 11(3) of the Financial Services ▇▇▇ ▇▇▇▇
(Investment Advertisements) (Exemptions) Order 1996 or is a person to
whom such document may otherwise lawfully be issued or passed on.
5. Certain Agreements of the Company. The Company agrees with the
Purchaser that:
(a) The Company will advise CSFBC promptly of any proposal to
amend or supplement the Offering Document and will not effect such
amendment or supplement without CSFBC's consent. If, at any time prior
to the completion of the resale of the Offered Securities by the
Purchaser, any event occurs as a result of which the Offering Document
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, the Company promptly will notify
CSFBC of such event and promptly will prepare, at its own expense, an
amendment or supplement which will correct such statement or omission.
Neither CSFBC's consent to, nor its delivery to offerees or investors
of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 6.
(b) The Company will furnish or make generally available to
the Purchaser copies of the Offering Document and Exchange Act Reports,
and any upon request of the Representative 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 Purchaser all such
documents.
(c) The Company will cooperate with the Purchaser 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
7
continue such qualifications in effect so long as required for resale
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 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 Company as contemplated herein that relates to the Offering
Document, or the offering of the Offered Securities in any jurisdiction
in which it is not now so qualified.
(d) During the period of two years hereafter, the Company will
furnish or make generally available to the Purchaser 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 a copy of the
restrictions on transfer applicable to the Offered Securities; and the
Company will furnish to the Purchaser 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.
(e) The Company will pay all expenses incident to the
performance of its obligations under this Agreement and the
Registration Rights 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 the
Offering Document (including any amendments and supplements thereto) to
the Purchaser.
(f) 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 Securities 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
Purchaser.
(g) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined
in Rule 144 under the Securities Act) to, resell any of the Offered
Securities that have been reacquired by any of them.
(h) During the period of two years after the Closing Date, the
Company will not be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act.
(i) In connection with the offering, until CSFBC shall have
notified the Company of the completion of the resale of the Offered
Securities, neither the Company nor any of its affiliates has or will,
either alone or with one or more other persons, bid for or purchase for
any account in which it or any of its affiliates has a beneficial
interest any Offered Securities or attempt to induce any person to
purchase any Offered Securities; and neither it nor any of its
affiliates will make bids or purchases for the purpose of creating
actual, or apparent, active trading in, or of raising the price of, the
Offered Securities.
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6. Conditions of the Obligations of the Purchaser. The obligations of
the Purchaser to purchase and pay for the Offered Securities 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 officers of the Company 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 Purchaser
shall have received a letter, dated the date of delivery thereof, of
PricewaterhouseCoopers LLP and Deloitte & Touche 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 (and with respect to Deloitte & Touche LLP,
to the extent applicable):
(i) in their opinion the financial statements and any
schedules and any summary of earnings examined by them and
included in the Offering Document comply as to form in all
material respects with the applicable accounting requirements
of the Act and the related rules and regulations published
thereunder;
(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 Offering Document;
(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
Offering Document do not comply as to form in all
material respects with the applicable accounting
requirements of the Act and the related 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 Offering Document, 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 the 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 Offering Document; or
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(D) for the period from the closing date of
the latest income statement included in the Offering
Document 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
Offering Document 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 Offering Document (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 Offering Document shall be deemed
included in the Offering Document for purposes of this subsection.
(b) 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 Purchaser, is material and adverse and makes it impractical or
inadvisable to proceed with completion of 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 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 Purchaser, 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 Purchaser, the effect
of any such attack, outbreak, escalation, act, declaration, calamity or
emergency
10
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities.
(c) The Purchaser shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company, to
the effect that:
(i) The Indenture has been duly authorized, executed
and delivered by the Company; 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 Offering
Document;
(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 Securities 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, this Agreement and the Registration Rights
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) In the course of the preparation by the Company
of the Offering Document (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
Purchaser and counsel for the Purchaser at which the Offering
Document and the Exchange Act Reports 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
Offering Document, 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, in the
light of the circumstances under which they were made, not
misleading; the descriptions in the Offering Document and the
Exchange Act Reports 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 do not know of any legal or governmental proceedings
required to be described in the Exchange Act Reports which are
not described as required or of any contracts or
11
documents of a character required to be described in the
Exchange Act Reports 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 Offering Document;
(v) Each document, if any, filed pursuant to the
Exchange Act and incorporated by reference in the Offering
Document (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;
(vi) This Agreement and the Registration Rights
Agreement have been duly authorized, executed and delivered by
the Company;
(vii) 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
Offering Document, 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; and
(viii) It is not necessary in connection with (i) the
offer, sale and delivery of the Offered Securities by the
Company to the Purchaser pursuant to this Agreement or (ii)
the resales of the Offered Securities by the Purchaser in the
manner contemplated by this Agreement, to register the Offered
Securities or to qualify an indenture in respect thereof under
the Trust Indenture Act.
(d) The Purchaser shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇, as
Vice President, Associate General Counsel and Corporate Secretary 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 Offering Document and
the Exchange Act Reports, 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.
(ii) The execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the Indenture
and the Offered 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
12
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 Exchange Act Reports which are not described
as required or of any contracts or documents of a character
required to be described in the Exchange Act Reports 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 Exchange Act Reports.
(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 Exchange Act
Reports and (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 and the Registration Rights 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 or the
Registration Rights 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.
(e) The Purchaser shall have received from ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Mayor, Day, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Purchaser, 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 Offering Document and other related
matters as the Purchaser 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.
(f) The Purchaser 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, and that,
subsequent to the date of the most recent financial statements
incorporated by reference in the Offering Document, there has been no
material adverse change, nor any development or event involving a
prospective material adverse change, in
13
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 Offering Document or as described in
such certificate.
(g) The Purchaser 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 Purchaser with such conformed copies of
such opinions, certificates, letters and documents as the Purchaser reasonably
request. CSFBC may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchaser hereunder.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless the Purchaser, its partners, directors and officers and each
person, if any, who controls the Purchaser within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Purchaser may become subject, under the Securities 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 Offering Document, or any
amendment or supplement thereto, 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 Purchaser for any legal or other expenses reasonably incurred by
the Purchaser 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 Purchaser specifically for use
therein, it being understood and agreed that the only such information furnished
by the Purchaser 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 Offering
Document related to the Offered Securities, the indemnity agreement contained in
this subsection (a) shall not inure to the benefit of the Purchaser from whom
the person asserting such losses, claims, damages or liabilities purchased the
Offered Securities concerned, to the extent that a offering circular relating to
such Offered Securities was required to be delivered by the Purchaser under the
Securities Act in connection with such purchase and any such loss, claim, damage
or liability of the Purchaser 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 Offering Document
(exclusive of material incorporated by reference) if the Company had previously
furnished copies thereof to the Purchaser.
(b) The Purchaser will severally and not jointly 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
Securities Act, against any losses, claims, damages or liabilities to
which the Company may become subject, under the Securities 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
the Offering Document or any amendment or supplement thereto, or arise
out of or are based upon the omission or the alleged
14
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 Purchaser 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 Purchaser consists of the following information in the Offering
Document furnished on behalf of the Purchaser: the third paragraph, the
sixth paragraph and the twelfth and thirteenth paragraphs under the
caption "Plan of Distribution."
(c) Promptly after receipt by an indemnified party under this
Section 7 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 7 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 Purchaser on the other from the offering of the Offered
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 Purchaser 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 Purchaser on
the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions
15
received by the Purchaser. 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 Purchaser 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 Purchaser shall not be required to contribute
any amount in excess of the amount by which the total price at which
the Offered Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which the
Purchaser has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 7 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 Purchaser within the meaning of the Securities
Act; and the obligations of the Purchaser under this Section 7 shall be
in addition to any liability which the Purchaser may otherwise have and
shall extend, upon the same terms and conditions, to each director of
the Company and to each person, if any, who controls the Company within
the meaning of the Securities 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 Purchaser 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 Purchaser, 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 for any reason the purchase of the Offered
Securities by the Purchaser 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 Purchaser 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 Purchaser 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(b), the Company will reimburse the Purchaser 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 Purchaser, will be mailed, delivered or sent by facsimile and
confirmed to the Purchaser at 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 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department.
16
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]
17
Very truly yours,
EL PASO CORPORATION
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
18
SCHEDULE A
PRINCIPAL AMOUNT OF
PURCHASER OFFERED SECURITIES
--------- ------------------
Credit Suisse First Boston Corporation ....... $500,000,000
Total ................ $500,000,000
============
Schedule A-1
SCHEDULE B
SIGNIFICANT SUBSIDIARIES
El Paso Natural Gas Company
El Paso Tennessee Pipelines Co.
Southern Natural Gas Company
El Paso Production Holding Company
El Paso CGP Company
Schedule B-1