<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 26, 1997
REGISTRATION NO. 333-20199
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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TENNESSEE GAS PIPELINE COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<C> <C>
DELAWARE 74-1056569
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
EL PASO ENERGY BUILDING BRITTON WHITE, JR.
1001 LOUISIANA EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
HOUSTON, TEXAS 77002 EL PASO NATURAL GAS COMPANY
(713) 757-2131 1001 LOUISIANA
(Address, including zip code, and telephone number, HOUSTON, TEXAS 77002
including (713) 757-2131
area code, of registrant's principal executive (Name, address, including zip code, and telephone
offices) number,
including area code, of agent for service)
</TABLE>
---------------------
Copies to:
GARY PAUL COOPERSTEIN, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
(212) 859-8000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
in light of market conditions and other factors.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 26, 1997
PROSPECTUS
TENNESSEE GAS PIPELINE COMPANY
$1,000,000,000
DEBT SECURITIES
---------------------
Tennessee Gas Pipeline Company ("TGP") may offer and sell from time to time
in one or more series its unsecured debt securities consisting of notes,
debentures or other evidences of indebtedness (the "Debt Securities"). The Debt
Securities will be limited to an aggregate initial public offering price not to
exceed $1,000,000,000, or the equivalent thereof in one or more foreign
currencies, including composite currencies. The Debt Securities may be offered,
separately or together, in separate series, in amounts, at prices and on terms
to be determined at the time of sale and set forth in a supplement to this
Prospectus (a "Prospectus Supplement").
Certain specific terms of the particular Debt Securities in respect of
which this Prospectus is being delivered will be set forth in a related
Prospectus Supplement, including, where applicable, the specific designation,
aggregate principal amount, authorized denominations, maturities, interest rate
or rates (which may be fixed or variable), the date or dates on which interest,
if any, shall be payable, the place or places where principal of and premium, if
any, and interest, if any, on such Debt Securities of the series will be
payable, terms of optional or mandatory redemption or any sinking fund or
analogous provisions, currency or currencies, or currency unit or currency units
of denomination and payment if other than U.S. dollars, the initial public
offering price, terms relating to temporary or permanent global securities,
provisions regarding convertibility, if any, provisions regarding registration
of transfer or exchange, the proceeds to TGP and other special terms.
The Debt Securities may be offered and sold to or through underwriters,
dealers or agents as designated from time to time, or through a combination of
such methods, and also may be offered and sold directly to one or more other
purchasers. See "Plan of Distribution". The names of, and the principal amounts
to be purchased by, underwriters, dealers or agents, and the compensation of
such underwriters, dealers or agents, including any applicable fees,
commissions, and discounts, will be set forth in the related Prospectus
Supplement. No Debt Securities may be sold without delivery of a Prospectus
Supplement describing such series or issue of Debt Securities and the method and
terms of offering thereof.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE> 3
AVAILABLE INFORMATION
TGP is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith,
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports and other information may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: 7 World Trade Center, Suite 1300, New York, New York
10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material also may be obtained at prescribed
rates from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. Such material also may be accessed electronically
by means of the Commission's home page on the Internet at http://www.sec.gov. As
long as securities of the Company are listed on the New York Stock Exchange,
such reports and other information can also be inspected at the offices of such
exchange, 20 Broad Street, New York, New York.
This Prospectus does not contain all of the information set forth in TGP's
Registration Statement, of which this Prospectus is a part, filed with the
Commission (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"). Reference is made to such Registration Statement
for further information with respect to TGP and the Debt Securities offered
hereby. Statements contained herein concerning the provisions of documents are
necessarily summaries of such documents, and each statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission by TGP
pursuant to the Exchange Act are incorporated herein by reference:
1. TGP's Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
as amended pursuant to a Form 10-K/A dated October 30, 1996 (collectively,
the "Form 10-K") (pursuant to Rule 412 under the Securities Act, the
financial information and management's discussion and analysis of financial
condition and results of operations included in the Form 10-K have been
modified and superceded by the financial information and management's
discussion and analysis of results of operations ("MD&A") included in the
January Form 8-K (as defined) and such modified and superceded financial
information and management's discussion and analysis of financial condition
and results of operations therefore do not constitute a part of the
Registration Statement);
2. TGP's Quarterly Reports on Form 10-Q for the quarterly periods ended March
31, 1996, June 30, 1996 and September 30, 1996 (collectively, the "Form
10-Qs") (pursuant to Rule 412 under the Securities Act, the financial
information and management's discussion and analysis of financial condition
and results of operations included in the Form 10-Qs have been modified and
superceded by the financial information and MD&A included in the January Form
8-K and such modified and superceded financial information and management's
discussion and analysis of financial condition and results of operations
therefore do not constitute a part of the Registration Statement);
3. TGP's Current Report on Form 8-K filed December 26, 1996, as amended pursuant
to a Form 8-K/A dated January 21, 1997 (the "December Form 8-K"); and
4. TGP's Current Report on Form 8-K filed January 22, 1997 (the "January Form
8-K").
All documents filed by TGP pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Debt Securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained therein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so
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modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
TGP will provide without charge to each person, including any beneficial
owner of a Debt Security, to whom a copy of this Prospectus is delivered, upon
written or oral request of such person, a copy of any or all documents
incorporated by reference in this Prospectus (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
such documents). Written requests for such copies should be directed to Stacy J.
James, Secretary, Tennessee Gas Pipeline Company, 1001 Louisiana, Houston, Texas
77002.
FORWARD-LOOKING STATEMENTS
This Prospectus and the accompanying Prospectus Supplement contain or
incorporate by reference forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Where any such forward-looking
statement includes a statement of the assumptions or bases underlying such
forward-looking statement, TGP cautions that assumed facts or bases almost
always vary from actual results, and the differences between assumed facts or
bases and actual results can be material, depending upon the circumstances.
Where, in any forward-looking statement, TGP or its management expresses an
expectation or belief as to future results, there can be no assurance that the
statement of expectation or belief will result or be achieved or accomplished.
The words "believe", "expect", "estimate", "anticipate", "seek", "project" and
similar expressions identify forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of their dates. TGP undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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THE COMPANY
GENERAL
TGP is a wholly owned subsidiary of El Paso Tennessee Pipeline Co. ("El
Paso Tennessee"), which in turn is an indirect subsidiary of El Paso Natural Gas
Company ("El Paso"). Unless the context otherwise requires, references herein to
the "Company" shall mean TGP and all of its subsidiaries.
The major businesses of the Company consist of the interstate
transportation of natural gas, gas marketing, intrastate pipeline operations,
international pipelines and power generation and domestic power generation
operations. Prior to the Distributions and Merger described below, the Company
also was engaged in the manufacture and sale of automotive exhaust system parts
and ride control products; the manufacture and sale of packaging materials,
cartons, containers and specialty packaging products for consumer and commercial
markets; and the construction and repair of ships.
TGP is a Delaware corporation with its principal executive offices located
at 1001 Louisiana, Houston, Texas 77002. Its telephone number at that address is
713-757-2131.
ACQUISITION BY EL PASO
On December 12, 1996 (the "Merger Effective Time"), El Paso Merger Company,
an indirect subsidiary of El Paso ("El Paso Merger Sub"), and Tenneco Inc. ("Old
Tenneco"), completed a merger (the "Merger") in which El Paso Merger Sub merged
with and into Old Tenneco, which became an indirect subsidiary of El Paso. In
the Merger, Old Tenneco changed its name to "El Paso Tennessee Pipeline Co."
(referred to herein as "El Paso Tennessee"). Prior to the Merger, Old Tenneco
and its subsidiaries, including TGP, effected various intercompany transfers and
distributions which restructured, divided and separated their businesses, assets
and liabilities so that all the assets, liabilities and operations related to
their automotive parts, packaging and administrative services businesses
(collectively, the "Industrial Business") and their shipbuilding business (the
"Shipbuilding Business") were spun-off to Old Tenneco's then existing common
stockholders (the "Distributions"). The entity consisting of the Shipbuilding
Business was subsequently renamed "Newport News Shipbuilding Inc." ("Newport
News") and the entity consisting of the Industrial Business was subsequently
renamed "Tenneco Inc." ("New Tenneco"). Following the Distributions, the
remaining operations of Old Tenneco, including those of TGP, consisted primarily
of those operations related to the transmission and marketing of natural gas. As
a result of the Merger, El Paso indirectly owns 100% of the common stock of El
Paso Tennessee, representing at the effective time of the Merger approximately
75% of the equity value of El Paso Tennessee; the balance of the equity value of
El Paso Tennessee is held by the holders of its 8 1/4% Cumulative Preferred
Stock, Series A, which was originally issued in a registered public offering in
November 1996 and remained outstanding after the Merger.
El Paso is engaged in a comprehensive review of the business and operations
of the Company. Following completion of such review, El Paso intends to
integrate, for the most part, the operations of the Company to increase
operating and administrative efficiency through consolidation and reengineering
of facilities, workforce reductions and coordination of purchasing, sales and
marketing activities. El Paso anticipates that the complementary interstate and
intrastate pipeline operations and gas marketing activities of El Paso and the
Company should provide the combined company with increased operating flexibility
and access to additional customers and markets, although the amount and timing
of realization of such benefits will depend upon the ability of El Paso to
integrate successfully the business and operations of the companies, and the
time period over which such integration is effected.
INTERSTATE PIPELINE OPERATIONS
The interstate pipeline operations of the Company include the pipeline
systems of TGP and its wholly owned subsidiaries Midwestern Gas Transmission
Company ("Midwestern") and East Tennessee Natural Gas Company ("East
Tennessee"), as well as certain joint ventures, which are primarily engaged in
the transportation and storage of natural gas for producers, marketers,
end-users and other gas transmission and distribution companies. TGP's
multiple-line system begins in the gas-producing regions of Texas and
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Louisiana, including the continental shelf of the Gulf of Mexico, and extends
into the northeastern section of the United States, including the New York City
and Boston metropolitan areas. Midwestern's pipeline system extends from
Portland, Tennessee, to Chicago, and principally serves the Chicago metropolitan
area. East Tennessee's pipeline system serves the states of Tennessee, Virginia
and Georgia. Net revenues from the interstate gas sales and transportation
operations of the Company accounted for approximately 40%, 39% and 45% of total
revenues of the Company for 1995, 1994 and 1993, respectively.
The interstate gas transmission systems of the Company include
approximately 16,300 miles of pipeline, gathering lines and sales laterals (with
14,800 miles operated by TGP, 400 miles operated by Midwestern and 1,100 miles
operated by East Tennessee), together with related facilities that include 90
compressor stations with an aggregate of approximately 1.5 million horsepower.
The Company also has interests in or contractual rights to six underground and
above-ground gas storage facilities to permit increased deliveries of gas during
peak demand periods. The total design delivery capacity of the Company's
interstate systems as of December 31, 1995 was approximately 4.8 billion cubic
feet ("BCF") of gas per day, and approximately 5.6 BCF on peak demand days,
which includes gas withdrawn from storage.
Gas Sales and Transportation
The following table sets forth the volumes of gas, stated in billions of
British thermal units ("BBtu"), sold and transported by the interstate pipeline
systems of the Company for the periods shown.
<TABLE>
<CAPTION>
BBTUS
-----------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Sales*.................................... 95,397 131,097 213,210
Transportation*........................... 2,139,169 2,183,944 2,118,936
--------- --------- ---------
Total................................ 2,234,566 2,315,041 2,332,146
========= ========= =========
</TABLE>
- ---------------
* Sales and transportation volumes include all natural gas sold or transported
by the Company's interstate pipeline systems (including the proportionate
share of transportation volumes of the joint ventures in which the Company
had interests) and have not been adjusted to reflect the sale of (i) its 50%
interest in Kern River Gas Transmission Company ("Kern River") in December
1995, (ii) its 13.2% general partnership interest in Iroquois Gas
Transmission System, L.P. ("Iroquois") in June 1996, and (iii) a 100%
interest in Viking Gas Transmission Company ("Viking") in 1993. Kern River
owns a 904-mile pipeline system extending from Wyoming to California,
Iroquois owns a 370-mile pipeline extending from the Canadian border at
Waddington, New York to Long Island, New York and Viking owns a 549-mile
pipeline extending from the Canadian border near Emerson, Manitoba to
Marshfield, Wisconsin. Of the total transportation volumes shown, Kern River
transported approximately 135,827 BBtu, 129,964 BBtu and 127,624 BBtu during
1995, 1994 and 1993, respectively, Iroquois transported approximately 45,272
BBtu, 32,489 BBtu and 32,721 BBtu during 1995, 1994 and 1993, respectively,
and Viking transported approximately 58,579 BBtu during 1993.
Customers of the interstate pipeline operations of the Company include
natural gas producers, marketers and end-users, as well as other gas
transmission and distribution companies. Substantially all of the revenues of
these operations are generated under long-term gas transmission contracts
entered into between the Company and its customers. Contracts representing
approximately 70% of the firm transportation capacity of the interstate pipeline
operations of the Company will be expiring over the next five years, principally
in the year 2000. Although the Company presently intends to pursue the
renegotiation, extension and/or replacement of these contracts, there can be no
assurance as to whether the Company will be able to extend or replace these
contracts (or a substantial portion thereof) or that the terms of any
renegotiated contracts will be as favorable to the Company as the existing
contracts. Accordingly, the Company presently is unable to ascertain whether or
not the expiration and renegotiation, extension and/or replacement of these
transportation contracts will have a material adverse effect on the Company's
combined financial position or results of operations.
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Federal Regulation
TGP and its interstate natural gas pipeline subsidiaries are "natural gas
companies" as defined in the Natural Gas Act of 1938, as amended (the "Natural
Gas Act"). As such, these companies are subject to the jurisdiction of the
Federal Energy Regulatory Commission (the "FERC"). The interstate pipeline
operations of the Company are operated pursuant to certificates of public
convenience and necessity and other authorizations issued under the Natural Gas
Act and pursuant to the Natural Gas Policy Act of 1978. The FERC regulates the
interstate transportation and certain sales of natural gas, including, among
other things, rates and charges allowed natural gas companies, extensions and
abandonments of facilities and service, rates of depreciation and amortization
and the accounting system utilized by the companies.
Prior to the FERC's industry restructuring initiatives in the 1980's, TGP
and its interstate pipeline subsidiaries operated primarily as merchants,
purchasing natural gas under long-term contracts and reselling the gas to
customers, also under long-term contracts. On April 8, 1992, the FERC issued
Order 636 ("Order 636"), which restructured the natural gas industry by
requiring mandatory unbundling of pipeline sales and transportation services.
Numerous parties appealed to the U.S. Court of Appeals for the D.C. Circuit
challenging the legality of Order 636 generally, as well as the legality of
specific provisions of Order 636. On July 16, 1996, the court issued its
decision upholding, in large part, Order 636. The court remanded to the FERC
several issues for further explanation, including further explanation of the
FERC's decision to allow pipelines to recover 100% of their gas supply
realignment costs.
TGP implemented revisions to its tariff, effective on September 1, 1993,
which restructured its transportation, storage and sales services to convert TGP
from primarily a merchant to primarily a transporter of gas as required by Order
636. As a result of this restructuring, TGP's gas sales declined while certain
obligations to producers under long-term gas supply contracts continued, causing
TGP to incur significant restructuring transition costs. See "-- Order 636
Transition Matters" for information concerning costs incurred by TGP to comply
with Order 636, the recovery of such costs by TGP from its customers and a
proposed settlement with TGP's customers.
On December 30, 1994, TGP filed for a general rate increase (the "1995 Rate
Case"). On January 25, 1995, the FERC accepted the filing, suspended its
effectiveness for the maximum period of five months pursuant to normal
regulatory process, and set the matter for hearing. On July 1, 1995, TGP began
collecting rates, subject to refund, reflecting an $87 million increase in TGP's
annual revenue requirement. A Stipulation and Agreement was filed with an
administrative law judge in this proceeding on April 5, 1996. This Stipulation
proposed to resolve the rates that are the subject of the 1995 Rate Case,
including structural rate design and increased revenue requirements. Under the
Stipulation, TGP is required to refund, upon final approval of the Stipulation,
the difference between the revenues collected under the rates in effect since
July 1, 1995 and the rates set forth in the Stipulation. TGP is reserving
revenues it believes adequate to cover the income impact of the Stipulation. On
October 30, 1996, the FERC approved the Stipulation resolving the 1995 Rate
Case, with certain modifications and clarifications which are not material and
which should not cause changes adverse to the Company. Two parties have filed
requests for rehearing of the order approving the settlement. TGP believes that
the order approving the settlement will be upheld on rehearing.
For a discussion of recent FERC proceedings relating to the recovery by the
Company of certain environmental costs as a component of the rates charged by
its interstate pipeline operations see "-- Environmental Matters."
TGP, as with all interstate pipelines, is subject to FERC audit review of
its books and records. An audit covering the years 1991-1994 is currently
ongoing. The FERC audit staff is expected to issue an audit report in early
1997.
Competition
The regulated natural gas pipeline industry is experiencing increasing
competition, which results from actions taken by the FERC to strengthen market
forces throughout the industry. In a number of key markets, the interstate
pipelines of the Company face competitive pressure from other major pipeline
systems, enabling
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local distribution companies and end-users to choose a supplier or switch
suppliers based on the short-term price of gas and the cost of transportation.
The Company also faces varying degrees of competition from alternative energy
sources, such as electricity, coal and oil. Competition between pipelines is
particularly intense in Midwestern's Chicago and Northern Indiana markets, in
East Tennessee's Roanoke, Chattanooga and Atlanta markets, and in TGP's supply
area, Louisiana and Texas. In some instances, the Company's pipelines have been
required to discount their transportation rates in order to maintain their
market share. As noted above, transportation contracts representing
approximately 70% of firm interstate transportation capacity will be expiring
over the next five years, principally in the year 2000. Future renegotiations of
the Company's existing transportation contracts and negotiations with potential
new customers could be adversely impacted by the foregoing or other competitive
factors. In addition, there can be no assurance that the Company's existing
contracts (or a substantial portion thereof) will be renegotiated or that the
terms of any renegotiated contracts will be as favorable to the Company as the
existing contracts. Accordingly, the Company presently is unable to ascertain
whether or not the expiration and renegotiation of these transportation
contracts will have a material adverse effect on the Company's combined
financial position or results of operations.
Gas Supply
With full implementation of Order 636, TGP's firm sales obligations
requiring maintenance of long-term gas purchase contracts have declined from
over a 1.4 billion Dekatherms or millions of British thermal units ("MMBtus")
maximum daily delivery obligation to less than a 200 million MMBtu maximum daily
delivery obligation at September 30, 1996. TGP has substantially reduced its
natural gas purchase portfolio in line with these requirements through
termination and assignment to third parties. Although TGP's requirements for
purchased gas are substantially less than prior to its implementation of Order
636, TGP is pursuing the attachment of gas supplies to its pipeline system for
transportation by others. Current gas supply activities include development of
offshore and onshore pipeline gathering projects.
GAS MARKETING, INTRASTATE PIPELINES AND RELATED SERVICES
Certain subsidiaries of TGP are engaged in the businesses of marketing
natural gas and owning and operating approximately 1,300 miles of gathering and
intrastate pipelines that serve the Texas Gulf Coast and West Texas markets.
During the nine months ended September 30, 1996, the Company's marketing
operations bought, sold and contracted for the transportation of approximately
1.4 BCF of natural gas per day from approximately 200 suppliers, through 40
pipelines to about 400 customers, marketers and end-users. The Company offers a
portfolio of products and services which are intended to help distributors,
end-users and producers manage their entire gas sales and purchasing processes,
from budget control and risk management to flexible takes and daily balances.
The Company also owns and manages gas gathering systems and natural gas
processing plants in Pennsylvania, Texas, Louisiana and Tennessee. Additionally,
the Company owns and operates, either directly or through joint ventures,
approximately 1,300 miles of intrastate pipelines in the Texas Gulf Coast and
West Texas markets. In addition to offering transportation capacity, these
intrastate pipeline operations offer buying, selling and transportation services
for 1.3 BCF of natural gas per day, serving approximately 150 suppliers and 50
customers and shippers. The intrastate pipeline operations also provide swing
storage services and access to major intrastate and interstate pipelines in
Texas. Net revenues from the foregoing operations accounted for approximately
60%, 61% and 55% of the total revenues of the Company for 1995, 1994 and 1993,
respectively.
The following table sets forth the volumes of gas, stated in BBtu, sold and
transported by the Company's marketing and intrastate pipeline subsidiaries for
the periods indicated:
<TABLE>
<CAPTION>
BBTUS
-----------------------------
1995 1994 1993
------- --------- -------
<S> <C> <C> <C>
Sales......................................... 642,096 739,432 741,800
Transportation................................ 229,415 273,587 235,940
------- --------- -------
Total............................... 871,511 1,013,019 977,740
======= ========= =======
</TABLE>
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INTERNATIONAL AND POWER GENERATION OPERATIONS
The Company has recently undertaken various activities to extend its
traditional activities in North American pipelines to international pipeline,
power and energy-related projects, with a current focus on activities in Latin
America, Southeast Asia, Australia and Europe. The Company's power unit is
involved in developing, building, owning, operating and acquiring energy-related
infrastructure, domestically and internationally, by capitalizing on the
experience of the Company in major project development and gas technologies,
transportation and supply.
International Pipeline Operations. In 1995, the Company was selected to
construct, own and operate a 470-mile natural gas pipeline in Queensland,
Australia at a total cost of $170 million. Construction of the pipeline
commenced in late 1995 and was completed in December 1996. Additionally, in June
1995 the Company acquired the natural gas pipeline assets of the Pipeline
Authority of South Australia ("PASA"), which includes a 488-mile pipeline, for
$225 million. In December 1996, the Company realized approximately $400 million
through a debt financing involving these projects and a sale of 70% of its
equity interest in these projects.
The Company has interests in a consortium pursuing the development of a
natural gas pipeline from Bolivia to Brazil and related gas-fired electric
generation plants. Furthermore, in December 1995, the Company was selected by
the Beijing Natural Gas Transportation Company ("BGTC") to serve as a paid
technical advisor for the construction of China's first major onshore natural
gas pipeline. BGTC, a joint venture between the Chinese National Petroleum
Corporation and the city of Beijing, is building a 600-mile line linking the
Jingbian gas field in central China's Eerdous Basin with Beijing. Construction
commenced in March 1996, with an in-service date scheduled for October 1997.
Power Generation Operations. In May 1996, EPEC Power Generation Company
("EPEC Power"), a subsidiary of TGP previously named Tenneco Power Generation
Company, acquired from Energy Equity Corp., Ltd., an Australian company, a 50%
interest in two of its subsidiaries which participate in a joint venture which
is constructing a 135 megawatt gas-fired power plant in Indonesia. EPEC Power
has a 17.5% interest in a 240 megawatt power plant in Springfield,
Massachusetts, and 50% interests in two additional cogeneration projects in
Florida which have a combined capacity of 220 megawatts. The Company is seeking
to monetize its interest in one of these Florida cogeneration projects.
DISCONTINUED AND OTHER OPERATIONS
The Company holds certain limited assets and is responsible for certain
liabilities of the existing and discontinued operations and businesses other
than those relating to the Industrial Business or the Shipbuilding Business.
These assets and liabilities consist primarily of the Company's remaining
interests in various discontinued operations which were engaged in (i) natural
gas pipeline transmission, gathering and processing, (ii) chemicals production,
(iii) the manufacture of farm and construction equipment through Case
Corporation and related companies, (iv) the extraction of minerals and other
natural resources, (v) oil and gas exploration, production and marketing through
Tenneco Oil Company and other companies, (vi) agricultural and urban
development, and (vii) insurance. The Company has established reserves which it
believes are adequate to cover these liabilities. However, the ultimate amount
of these liabilities may vary significantly from the amount estimated.
8
<PAGE> 10
MANAGEMENT
In connection with the Merger, the directors and most of the executive
officers of TGP prior to the Merger resigned effective as of the Merger
Effective Time. The following individuals have served as directors and executive
officers (holding the offices indicated below) of TGP since that time:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
William A. Wise........................... 51 Chairman of the Board and Director
John W. Somerhalder II.................... 41 President and Director
Gilmer R. Abel............................ 59 Senior Vice President
H. Brent Austin........................... 42 Senior Vice President and Director
E. Jay Holm............................... 52 Senior Vice President
</TABLE>
Directors and Executive Officers
WILLIAM A. WISE -- Following the Merger, Mr. Wise became the Chairman of
the Board and a Director of TGP. Mr. Wise has been Chairman of the Board of El
Paso since January 1994 and the President and Chief Executive Officer of El Paso
since January 1990. He was President and Chief Operating Officer of El Paso from
April 1989 to December 1989. From March 1987 until April 1989, Mr. Wise was an
Executive Vice President of El Paso. From January 1984 to February 1987, he was
a Senior Vice President of El Paso. He is a member of the Board of Directors of
Battle Mountain Gold Company.
JOHN W. SOMERHALDER II -- Mr. Somerhalder became President and a Director
of TGP following the Merger. He is also serving as Senior Vice President of El
Paso, which position he has held since November 1996. From January 1990 to
November 1996, Mr. Somerhalder served as Vice President of El Paso.
GILMER R. ABEL -- Mr. Abel has served as Senior Vice President of TGP since
April 1995. From November 1985 to April 1995, he served as Vice President of
TGP.
H. BRENT AUSTIN -- Following the Merger, Mr. Austin became the Senior Vice
President and a Director of TGP. Mr. Austin has been Executive Vice President of
El Paso since May 1995 and he has been Chief Financial Officer of El Paso since
April 1992. He was Senior Vice President of El Paso from April 1992 to April
1995. He was Vice President, Planning and Treasurer of Burlington Resources,
Inc. ("BR") from November 1990 to March 1992 and Assistant Vice President,
Planning of BR from January 1989 to October 1990.
E. JAY HOLM -- Mr. Holm has served as Senior Vice President of TGP since
1995. From 1990 to 1995 he served as President of Kern River, in which the
Company owned a 50% interest.
EMPLOYEES
As of December 31, 1996, the Company had approximately 2,800 full-time
employees. Since that date, the Company's workforce has been reduced by 340
employees due to early retirements, attrition and lay-offs. Further reductions
in the Company's workforce are planned, but the timing and size of such
reductions have not been determined.
PROPERTIES
The Company believes that substantially all of its facilities and equipment
are, in general, well maintained and in good operating condition. They are
considered adequate for present needs and, as supplemented by planned
construction, are expected to remain adequate for the near future. The Company
also believes that it has generally satisfactory title to the properties owned
and used in its businesses, subject to liens for current taxes and easements,
restrictions and other liens which do not materially detract from the value of
such properties or the interests therein or the use of such properties in its
businesses.
9
<PAGE> 11
ORDER 636 TRANSITION MATTERS
Pursuant to the provisions of Order 636 allowing for the recovery of
transition costs related to the restructuring, TGP has made filings to recover
gas supply realignment ("GSR") costs resulting from remaining gas purchase
obligations, costs related to its Bastian Bay facilities, the remaining
unrecovered balance of purchased gas ("PGA") costs and the "stranded" costs of
TGP's continuing contractual obligations to pay for capacity on other pipeline
systems ("TBO costs").
TGP's filings to recover costs related to its Bastian Bay facilities have
been rejected by the FERC based on the continued use of the gas production from
the field; however, the FERC recognized the ability of TGP to file for the
recovery of losses upon disposition of these assets. TGP has filed for appellate
review of the FERC actions and is confident that the Bastian Bay costs will
ultimately be recovered as transition costs under Order 636; the FERC has not
contested the ultimate recoverability of these costs.
The filings implementing TGP's recovery mechanisms for the following
transition costs were accepted by the FERC effective September 1, 1993, subject
to refund and pending FERC review and approval for eligibility and prudence: 1)
direct-billing of unrecovered PGA costs to its former sales customers over a
twelve-month period; 2) recovery of TBO costs, which TGP is obligated to pay
under existing contracts, through a surcharge from firm transportation
customers, adjusted annually; and 3) recovery of 90% of GSR costs over a period
of up to 36 months from firm transportation customers and recovery of 10% of
such costs from interruptible transportation customers over a period of up to 60
months.
Following negotiations with its customers, TGP filed in July 1994 with the
FERC a Stipulation and Agreement (the "PGA Stipulation"), which provides for the
recovery of PGA costs of approximately $100 million and the recovery of costs
associated with the transfer of storage gas inventory to new storage customers
in TGP's restructuring proceeding. The PGA Stipulation eliminates all challenges
to the PGA costs, but establishes a cap on the charges that may be imposed upon
former sales customers. On November 15, 1994, the FERC issued an order approving
the PGA Stipulation and resolving all outstanding issues. On April 5, 1995, the
FERC issued an order on rehearing affirming its initial approval of the PGA
Stipulation. TGP implemented the terms of the PGA Stipulation and made refunds
in May 1995. The refunds had no material effect on the Company's reported net
income. The orders approving the PGA Stipulation have been appealed to the D.C.
Circuit Court of Appeals by certain customers. TGP believes the FERC orders
approving the PGA Stipulation will be upheld on appeal.
TGP is recovering through a surcharge, subject to refund, TBO costs
formerly incurred to perform its sales function. The FERC issued an order
requiring TGP to refund certain costs from this surcharge and refunds were made
in May 1996. TGP is appealing this decision and believes such appeal will likely
be successful.
In order to resolve litigation concerning purchases made by TGP of
synthetic gas produced from the Great Plains coal gasification plant ("Great
Plains"), TGP, along with three other pipelines, executed four separate
settlement agreements with Dakota Gasification Company ("Dakota") and the U.S.
Department of Energy ("DOE") and initiated four separate proceedings at the FERC
seeking approval to implement the settlement agreements. Among other things, the
settlement requires TGP to pay Dakota over a limited period a premium over the
spot price for Dakota's production. As of December 31, 1996, TGP had paid $86.9
million of this obligation and had a remaining obligation through July 2003 of
$54.6 million (calculated on a non-discounted basis). The FERC previously ruled
that the costs related to the Great Plains project are eligible for recovery
through GSR and other special recovery mechanisms and that the costs are
eligible for recovery for the duration of the term of the original gas purchase
agreements. On October 18, 1994, the FERC consolidated the four proceedings and
set them for hearing before an administrative law judge ("ALJ"). The hearing,
which concluded in July 1995, was limited to the issue of whether the settlement
agreements were prudent. The ALJ concluded, in his initial decision issued in
December 1995, that the settlement was imprudent. In December 1996, the FERC
unanimously reversed that decision and upheld the settlement among the
pipelines, DOE and Dakota, meaning that the full amount to be paid by TGP
pursuant to the settlement is recoverable.
10
<PAGE> 12
Also related to TGP's GSR costs, on October 14, 1993, TGP was sued in the
State District Court of Ector County, Texas, by ICA Energy, Inc. ("ICA") and
TransTexas Gas Corporation ("TransTexas"). In that suit, ICA and TransTexas
contended that TGP had an obligation to purchase gas production which TransTexas
unilaterally attempted to add to the reserves originally dedicated to a 1979 gas
contract. An amendment to the pleading sought $1.5 billion from TGP for alleged
damages caused by TGP's refusal to purchase gas produced from the TransTexas
leases covering the new production and lands. In June 1996, TGP reached a
settlement with ICA and TransTexas for $125 million wherein ICA and TransTexas
agreed to terminate their contract rights, released TGP from liability under the
contract, and indemnified TGP against future claims, including royalty owner
claims. TGP has filed with the FERC to recover from its customers amounts
previously paid to TransTexas above the market price as well as the $125 million
settlement payment. In connection with that litigation, certain royalty interest
owners filed a claim against TGP alleging that they are sellers entitled to
tender gas to TGP under the settled contract. This claim fell under the
indemnification provisions of TGP's settlement with ICA and TransTexas,
requiring ICA and TransTexas to defend and indemnify TGP. This royalty owner
litigation was settled in December 1996 at no cost to TGP. The royalty owners'
claims against TGP have been dismissed.
TGP has been engaged in other settlement and contract reformation
discussions with other holders of certain gas purchase contracts who have sued
TGP. One of these matters involved a dispute between TGP, as purchaser, and
Lenape Resources Corp., The Coastal Corporation and Tesoro Petroleum
Corporation, as producers. On August 1, 1995, the Texas Supreme Court affirmed a
ruling of the Texas Court of Appeals favorable to TGP in this matter and
indicated that it would remand the case to the trial court. On April 18, 1996,
however, the Texas Supreme Court withdrew its initial opinion and issued an
opinion reversing the Court of Appeals opinion. In June 1996, TGP filed a motion
for rehearing with the Texas Supreme Court which was denied in August 1996. In
December 1996, TGP entered into settlement agreements with each of the parties
to this gas purchase contract. As a result of these settlements, the gas
purchase contract is now terminated. TGP paid a total of approximately $74
million pursuant to the settlement agreement, an amount substantially less than
the sum that has been accrued by TGP on account of this gas contract. In
addition, all related litigation was terminated. During the course of this
action, TGP had either paid, or provided for the payment of, amounts it believes
were appropriate to cover the resolution of its contract reformation litigation,
including providing a bond in the amount of $206 million. On September 30, 1996,
TGP paid approximately $193 million to the producers and the producers agreed to
release all but approximately $2 million of the bonded amount. On November 1,
1996, a final order was issued which assessed only $456,000 of the $2 million to
TGP and TGP was released from the remaining bond amount. On October 1, 1996, TGP
filed to recover from its customers the pricing differential portion of the
settlement payment and will file to recover the $74 million settlement payment.
As of September 30, 1996, TGP had deferred GSR costs yet to be recovered
from its customers of approximately $527 million, net of $414 million previously
recovered from its customers, subject to refund. A phased proceeding is underway
at the FERC with respect to the recovery of TGP's GSR costs. Testimony has been
completed in connection with Phase I of that proceeding relating to the
eligibility of GSR cost recovery; oral argument on eligibility issues was
originally set by a FERC ALJ for late October 1996. The Chief Judge of the FERC
has since issued orders (i) canceling the October 1996 oral argument, (ii)
convening settlement discussions which commenced on October 9, 1996, and (iii)
postponing scheduling oral argument on eligibility issues.
Phase II of the proceeding on the prudency of the costs to be recovered and
on certain contract specific eligibility issues has not yet been scheduled. The
FERC has generally encouraged pipelines to settle such issues through
negotiations with customers. Although the Order 636 transition cost recovery
mechanism provides for complete recovery by pipelines of eligible and prudently
incurred transition costs, certain customers have challenged the prudence and
eligibility of TGP's GSR costs and TGP has engaged in settlement discussions
with its customers concerning the amount of such costs in response to the FERC
statements acknowledging the desirability of such settlements.
On October 23, 1996, in anticipation of consummation of the Merger, El Paso
reached a preliminary understanding with certain of TGP's customers (the "El
Paso Preliminary GSR Understanding"). Under the
11
<PAGE> 13
El Paso Preliminary GSR Understanding, El Paso will settle the customers'
challenges to TGP's GSR and other transition costs and establish a cost recovery
mechanism for a portion of TGP's transition costs, effective January 1, 1997.
TGP expects that the El Paso Preliminary GSR Understanding will be finalized and
filed with the FERC during the first quarter of 1997. The purchase accounting
adjustments in the "Unaudited Pro Forma Financial Statements" contained in the
December Form 8-K incorporated by reference in this Prospectus assume that the
settlement with respect to TGP's GSR costs will be on the terms of the El Paso
Preliminary GSR Understanding.
Assuming the El Paso Preliminary GSR Understanding is finalized and filed
with the FERC, non-consenting customers will have the opportunity to object to
the proposed settlement. Given the uncertainty over whether the FERC will
approve the proposed GSR cost recovery settlement in the form ultimately
presented to it and the uncertainty related to predicting the outcome of its gas
purchase contract reformation efforts and the associated litigation, TGP is
unable to predict the timing or the ultimate impact that the resolution of these
issues will have on its combined financial position or results of operations.
ENVIRONMENTAL MATTERS
Since 1988, TGP has been engaged in an internal project to identify and
deal with the presence of polychlorinated biphenyls ("PCBs") and other
substances of concern, including substances on the U.S. Environmental Protection
Agency ("EPA") List of Hazardous Substances ("HS List") at compressor stations
and other facilities operated by both its interstate and intrastate natural gas
pipeline systems. While conducting this project, TGP has been in frequent
contact with federal and state regulatory agencies, both through informal
negotiation and formal entry of consent orders, in order to ensure that its
efforts meet regulatory requirements.
TGP is a party in proceedings involving federal and state authorities
regarding the past use of a lubricant containing PCBs in TGP's starting air
systems. TGP has executed a consent order with the EPA governing the remediation
of certain of its compressor stations and is working with the Pennsylvania and
New York environmental agencies to specify the remediation requirements at the
Pennsylvania and New York stations. Remediation activities in Pennsylvania are
essentially complete; in addition, pursuant to the Consent Order dated August 1,
1995, between TGP and the Pennsylvania Department of Environmental Protection,
TGP funded an environmentally beneficial project for $450,000 in April 1996 and
paid a $500,000 civil penalty in September 1996. Remediation and
characterization work at the compressor stations under its consent order with
the EPA and the jurisdiction of the New York Department of Environmental
Conservation is ongoing. TGP believes that the ultimate resolution of these
matters will not have a material adverse effect on the combined financial
position or results of operations of the Company.
TGP has established a reserve for environmental expenses, which includes:
(i) expected remediation expense and associated onsite, offsite and groundwater
technical studies; (ii) legal fees; and (iii) settlement of third-party and
governmental litigation, including civil penalties. Through September 30, 1996,
TGP has charged approximately $160 million against the environmental reserve,
excluding recoveries related to TGP's environmental settlement as discussed
below. Of the remaining reserve, $24 million has been recorded on the combined
balance sheet under "Payables -- trade" and $128 million under "Deferred credits
and other liabilities."
Due to the current uncertainty regarding the further activity necessary for
TGP to address the presence of PCBs, substances on the HS List and other
substances of concern on its sites, including the requirements for additional
site characterization, the actual amount of such substances at the sites, and
the final, site-specific cleanup decisions to be made with respect to cleanup
levels and remediation technologies, TGP cannot at this time accurately project
what additional costs, if any, may arise from future characterization and
remediation activities. While there are still many uncertainties relating to the
ultimate costs which may be incurred, based upon TGP's evaluation and experience
to date, TGP continues to believe that the recorded reserve is adequate.
Following negotiations with its customers, TGP in May 1995 filed with the
FERC a separate Stipulation and Agreement (the "Environmental Stipulation") that
establishes a mechanism for recovering a substantial portion of its
environmental costs. In November 1995, the FERC issued an order approving the
Environmen-
12
<PAGE> 14
tal Stipulation. Although one shipper filed for rehearing, the FERC denied
rehearing of its order on February 20, 1996. This shipper filed a Petition for
Review on April 22, 1996 in the D.C. Circuit Court of Appeals; TGP believes the
FERC order approving the Environmental Stipulation will be upheld on appeal. The
effects of the Environmental Stipulation, which was effective as of July 1,
1995, have been recorded with no material effect on the combined financial
position or results of operations of the Company. As of September 30, 1996, the
balance of the regulatory asset is $54 million.
The Company has completed settlements with and has received payments from
the majority of its liability insurance policy carriers for remediation costs
and related claims. The Company believes that additional recoveries from the
remaining carriers in the pending litigation against such carriers are
reasonably possible. In addition, TGP has settled its pending litigation against
and received payment from the manufacturer of the PCB-containing lubricant
previously used in the starting air systems in a portion of TGP's pipeline. The
Company has reduced the amount it is selling to recover under the Environmental
Stipulation by the amount it has received in these proceedings, and these
recoveries have been considered in TGP's recording on its books of the
Environmental Stipulation.
In Commonwealth of Kentucky, Natural Resources and Environmental Protection
Cabinet v. Tennessee Gas Pipeline Company (Franklin County Circuit Court, Docket
No. 88-C1-1531, November 16, 1988), the Kentucky environmental agency alleged
that TGP discharged pollutants into the waters of the state without a permit and
disposed of PCBs without a permit. The agency sought an injunction against
future discharges, an order to remediate or remove PCBs, and a civil penalty.
TGP has entered into agreed orders with the agency to resolve many of the issues
raised in the original allegations, has received water discharge permits for its
Kentucky stations from the agency, and continues to work to resolve the
remaining issues. Counsel for TGP are unable to express an opinion as to the
ultimate outcome. TGP believes that the resolution of this issue will not have a
material adverse effect on the combined financial position or results of
operations of the Company.
In 1996, TGP sold its subsidiary which owns a 13.2% general partnership
interest in Iroquois to ANR Iroquois Inc., a subsidiary of The Coastal
Corporation. Iroquois owns an interstate gas pipeline from the Canadian border
through the states of New York and Connecticut to Long Island. TGP is still
under contract to provide gas dispatching as well as post-construction field
operation and maintenance services for the operator of Iroquois, but TGP is not
the operator and is not an affiliate of the operator of Iroquois' pipeline
system. In the second quarter of 1996, a global settlement was entered into by
Iroquois and the operator of Iroquois' pipeline system with the Federal and New
York State authorities resolving all criminal, civil and administrative
enforcement actions contemplated by such authorities as a result of their
investigation of alleged environmental violations which occurred during the
construction of the pipeline. No fines or penalties were imposed on TGP, and TGP
believes that any environmental matters relating to the construction and
operation of the pipeline system by Iroquois will not have a material adverse
effect on the combined financial position or results of operations of the
Company.
The Company has identified other sites where environmental remediation
expenses may be required should there be a change in ownership, operations or
applicable regulations. These possibilities cannot be predicted or quantified at
this time and, accordingly, no provision has been recorded. However, provisions
have been made for all instances where it has been determined that the
incurrence of any material remedial expense is reasonably possible. The Company
believes that the provisions recorded for its environmental exposures are
adequate based on current estimates.
TGP and certain of its subsidiaries have been designated, have received
notice that they could be designated or have been asked for information to
determine whether they could be designated as potentially responsible parties
("PRP") with respect to 25 sites under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA or Superfund) or state equivalents. The
Company has sought to resolve its liability as a PRP with respect to these
Superfund sites through indemnification by third parties and/or settlements
which provide for payment of the Company's allocable share of remediation costs.
As of September 30, 1996, the Company has estimated its share of the remediation
costs at these sites to be between $7 million and $41 million and has provided
reserves that it believes are adequate for such costs. Because the clean-up
costs are estimates and are subject to revision as more information becomes
available about the
13
<PAGE> 15
extent of remediation required, the Company's estimate of its share of
remediation costs could change. Moreover, liability under the federal Superfund
statute is joint and several, meaning that the Company could be required to pay
in excess of its pro rata share of remediation costs. The Company's
understanding of the financial strength of other PRPs has been considered, where
appropriate, in its determination of its estimated liability as described
herein. The Company presently believes that the costs associated with the
current status of such entities as PRPs at the Superfund sites referenced above
will not have a material adverse effect on the combined financial position or
results of operations of the Company.
In addition, the Company's liabilities include liabilities to remediate a
number of formerly owned or leased sites and certain other sites, pursuant to
state and federal laws enacted for the protection of the environment. The
Company estimates that as of September 30, 1996, its share of the remediation
costs at these sites to be between $23 million and $43 million and has provided
reserves that it believes are adequate for such costs. Because the clean-up
costs are estimates and are subject to revision as more information becomes
available about the extent of remediation required, the Company's estimate of
its share of remediation costs could change. The Company presently believes that
the costs to remediate these sites will not have a material adverse effect on
its combined financial position or results of operations.
For a discussion of various regulatory proceedings involving cost recovery
and contract reformation in connection with the interstate pipeline operations
of the Company, see "-- Order 636 Transition Matters."
LEGAL PROCEEDINGS
In July 1996, TGP was served with a complaint in the matter of Jack J.
Grynberg v. Alaska Pipeline Co., et al., filed in the U.S. District Court for
the District of Columbia. The plaintiff filed this action under the False Claims
Act against several interstate pipelines and others alleging that the defendants
mismeasured natural gas produced from Federal and Indian lands, which deprived
the United States of royalties otherwise due it. Among other things, the
plaintiff seeks to recover unspecified treble damages on behalf of the United
States. The plaintiff also seeks to recover his finder's fee and attorneys'
fees. All defendants, most of whom are pursuing a combined defense, have filed
responsive motions. The plaintiff's response to those motions is due in January
1997. TGP believes that there are valid jurisdictional and procedural defenses
to the plaintiff's complaint; however, even if the plaintiff is ultimately
entitled to pursue his claims, TGP believes that it has substantive defenses,
including that TGP's measurement practices are consistent with industry practice
and all applicable standards, regulations, contracts, and tariffs and that TGP
should not be liable in any event. Based on information available at this time,
TGP does not believe that the ultimate resolution of this matter will have a
materially adverse effect on the financial condition of its business.
In addition to the foregoing proceeding and the proceedings described under
"-- Order 636 Transition Matters" and "-- Environmental Matters," TGP and its
subsidiaries are parties to numerous other legal proceedings and arising from
their present and former operations. TGP believes that the outcome of these
other proceedings, individually and in the aggregate, will have no material
adverse effect on the combined financial condition or results of operations of
the Company.
ACQUISITION BY EL PASO
On December 12, 1996 El Paso Merger Sub and Old Tenneco completed the
Merger pursuant to which Old Tenneco became an indirect subsidiary of El Paso.
In the Merger, Old Tenneco changed its name to "El Paso Tennessee Pipeline Co."
Prior to the Merger, Old Tenneco and its subsidiaries, including TGP, effected
various intercompany transfers and distributions which restructured, divided and
separated their businesses, assets and liabilities so that all the assets,
liabilities and operations related to the Industrial Business and the
Shipbuilding Business were spun-off to Old Tenneco's then existing common
stockholders in the Distributions. New Tenneco was subsequently renamed "Tenneco
Inc." Following the Distributions, the remaining operations of Old Tenneco,
including those of TGP, consisted primarily of those operations related to the
transmission and marketing of natural gas. As a result of the Merger, El Paso
indirectly owns 100% of the common stock of El Paso Tennessee, representing at
the Merger Effective Time approximately 75% of the equity value of El Paso
Tennessee; the balance of the equity value of El Paso Tennessee is held by the
holders
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<PAGE> 16
of its 8 1/4% Cumulative Preferred Stock, Series A, which was originally issued
in a registered public offering in November 1996 and remained outstanding after
the Merger. For further information regarding the Merger and related
transactions, see Note 1 to the Company's combined financial statements
contained in the January 1997 Form 8-K incorporated by reference herein.
In preparation for the Merger and Distributions, Old Tenneco initiated a
realignment of its indebtedness. As part of this debt realignment, Old Tenneco
initiated tender offers for certain issues of its consolidated debt and certain
other debt issues were exchanged, defeased or otherwise retired. Upon completion
of the debt realignment transactions, the Company remains responsible for its
remaining debt after giving effect to the debt realignment. At December 31,
1996, the Company had approximately $130 million aggregate principal amount of
such debt outstanding (excluding any debt amount that may be allocated to the
Company in purchase accounting as a result of the Merger). The Company
recognized an after-tax extraordinary charge of approximately $100 million
related to the Company's debt realignment.
Immediately subsequent to the Merger, El Paso Tennessee had approximately
$2.1 billion of borrowings under its $3 billion Revolving Credit and Competitive
Advance Facility Agreement, dated as of November 4, 1996 (the "El Paso Tennessee
Credit Facility"), among El Paso Tennessee, the banks and other financial
institutions party thereto and The Chase Manhattan Bank, as agent. In addition,
El Paso Tennessee had approximately $300 million of 8 1/4% Cumulative Preferred
Stock, Series A, outstanding and approximately $134 million aggregate principal
amount of Old Tenneco debt after giving effect to the debt realignment which was
not redeemed or retired as part of the debt realignment transactions. Borrowings
under the El Paso Tennessee Credit Facility are guaranteed by El Paso. The
primary asset of El Paso Tennessee is its investment in TGP, and management
anticipates that the funds necessary to service the debt and other securities of
El Paso Tennessee will be provided by El Paso or the operations of the Company.
Consequently, the Company may provide funds from operating activities, as well
as proceeds from asset sales or financing, to El Paso Tennessee to fund its debt
and preferred stock servicing requirements.
Certain aspects of the Merger and the Distributions are subject to review
under Federal and state fraudulent conveyance laws. Under these laws, if a court
in a lawsuit by an unpaid creditor or a representative of creditors (such as a
trustee in bankruptcy of El Paso Tennessee, New Tenneco or Newport News as a
debtor-in-possession) were to determine that Old Tenneco, New Tenneco, Newport
News or any of their subsidiaries, including TGP, did not receive fair
consideration or reasonably equivalent value for incurring indebtedness or
transferring assets in connection with the Merger and the Distributions and
that, at the time of the Distributions or such incurrence of indebtedness or
transfer of assets, Old Tenneco, New Tenneco, Newport News or any of their
subsidiaries, including TGP, (i) was insolvent or would be rendered insolvent,
(ii) had unreasonably small capital with which to carry on its business and all
businesses in which it intended to engage, or (iii) intended to incur, or
believed it would incur, debts beyond its ability to repay such debts as they
would mature, then such court could, among other things, order the Company to
return to New Tenneco or Newport News the value of any distributions made by any
of them to the Company, bar future dividend and redemption payments on TGP's
capital stock, and invalidate, in whole or in part, the transactions in
question, as fraudulent conveyances.
The measure of insolvency for purposes of the fraudulent conveyance laws
will vary depending on which jurisdiction's law is applied. Generally, however,
an entity would be considered insolvent if the present fair saleable value of
its assets is less than (i) the amount of its liabilities (including contingent
liabilities), or (ii) the amount that will be required to pay its probable
liabilities on its existing debts as they become absolute and mature. No
assurance can be given as to what standard a court would apply in determining
insolvency or that a court would not determine that Old Tenneco, New Tenneco,
Newport News or any of their subsidiaries, including TGP, was "insolvent" at the
time of or after giving effect to the Merger and the Distributions.
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<PAGE> 17
USE OF PROCEEDS
Unless otherwise specified in a Prospectus Supplement, TGP will loan the
net proceeds from the sale of the Debt Securities to El Paso Tennessee. El Paso
Tennessee has informed TGP that it intends to use such funds to reduce amounts
outstanding under the El Paso Tennessee Credit Facility. As of December 31,
1996, there was $1.55 billion outstanding under the El Paso Tennessee Credit
Facility maturing November 1999 and bearing interest at a floating rate, which
was 5.94% as of December 31, 1996.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratio of earnings to fixed
charges for the Energy Businesses of Tennessee Gas Pipeline Company (see the
Notes to combined financial statements contained in the January 8-K incorporated
by reference in this Prospectus) for each of the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------
1996 1995 1994 1993 1992 1991
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges........................... 3.16 2.03 2.28 2.31 1.35 1.66
==== ==== ==== ==== ==== ====
</TABLE>
The ratio of earnings to fixed charges is based on continuing operations.
"Earnings" represent the sum of (a) pretax income before extraordinary loss,
plus (b) fixed charges (excluding capitalized interest other than (i) allowance
for funds used during construction, and (ii) amortization of interest
capitalized applicable to non-utility companies), minus (c) undistributed
earnings of affiliated companies in which less than a 50% voting interest is
owned. "Fixed charges" consist of interest expense, the portion of rental
expense considered to be representative of the interest factor and capitalized
interest. These ratios are based upon the amount of interest expense included in
the combined statements of income for the Energy Businesses of Tennessee Gas
Pipeline Company, which is net of interest allocated to affiliates (see Note 6
to the combined financial statements contained in the January Form 8-K
incorporated by reference in this Prospectus).
DESCRIPTION OF DEBT SECURITIES
The Debt Securities offered hereby will represent unsecured obligations of
TGP. The Debt Securities offered hereby will be issued under an Indenture (the
"Indenture"), between TGP and The Chase Manhattan Bank, as trustee (the
"Trustee"). The Indenture does not limit the aggregate principal amount of Debt
Securities that may be issued thereunder from time to time in one or more
series.
The terms of the Debt Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The Debt Securities are subject to
all such terms, and holders of Debt Securities are referred to the Indenture and
the Trust Indenture Act for a statement of those terms.
The statements set forth below in this section are brief summaries of
certain provisions contained in the Indenture, do not purport to be complete,
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture, including the definitions therein of certain terms,
a copy of which Indenture is included as an exhibit to the Registration
Statement of which this Prospectus is a part. Capitalized terms used in this
section and not otherwise defined in this section have the respective meanings
assigned to them in the Indenture.
GENERAL
Reference is made to the Prospectus Supplement relating to the particular
series offered thereby for the terms of such Debt Securities, including where
applicable: (a) the form and title of the Debt Securities; (b) the aggregate
principal amount of the Debt Securities; (c) the date or dates on which the Debt
Securities may be issued; (d) the date or dates on which the principal of and
premium, if any, on the Debt Securities shall be payable; (e) the rate or rates
(which may be fixed or variable) at which the Debt Securities shall bear
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interest, if any, and the date or dates from which such interest shall accrue;
(f) the dates on which interest, if any, shall be payable and the record dates
for the interest payment dates; (g) the place or places where the principal of
and premium, if any, and interest, if any, on the Debt Securities of the series
will be payable; (h) the period or periods, if any, within which, the price or
prices at which, and the terms and conditions upon which, the Debt Securities
may be redeemed at the option of TGP or otherwise; (i) any optional or mandatory
redemption or any sinking fund or analogous provisions; (j) if other than
denominations of $1,000 and integral multiples thereof, the denominations in
which the Debt Securities of the series shall be issuable; (k) if other than the
principal amount thereof, the portion of the principal amount of the Debt
Securities which shall be payable upon declaration of the acceleration of the
maturity thereof in accordance with the provisions of the Indenture; (l) the
currency or currencies, or currency unit or currency units, in which the
principal of and premium, if any, and interest, if any, on the Debt Securities
shall be denominated, payable, redeemable or purchasable, as the case may be;
(m) any Events of Default (as defined below) with respect to the Debt Securities
that differ from those set forth in the Indenture; (n) whether the Debt
Securities will be convertible; (o) whether the Debt Securities of such series
shall be issued as a global certificate or certificates and, in such case, the
identity of the depositary for such series; and (p) any other terms not
inconsistent with the Indenture.
If any Debt Securities offered hereby are sold for foreign currencies or
foreign currency units or if the principal of and premium, if any, or interest,
if any, on any series of Debt Securities is payable in foreign currencies or
foreign currency units, the restrictions, elections, tax consequences, specific
terms and other information with respect to such issue of Debt Securities and
such currencies and currency units will be set forth in the Prospectus
Supplement relating thereto.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities offered hereby will be issued only in fully registered form
in denominations of $1,000 or any integral multiple thereof. The Debt Securities
of a series may be issuable in the form of one or more global certificates,
which will be denominated in an amount equal to all or a portion of the
aggregate principal amount of such Debt Securities. See "-- Global Debt
Securities".
One or more series of Debt Securities offered hereby may be sold at a
substantial discount below their stated principal amount, bearing no interest or
interest at a rate that at the time of issuance is below market rates. The
Federal income tax consequences and special considerations applicable to any
such series of Debt Securities will be described generally in the Prospectus
Supplement relating thereto.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Unless and until such global certificate or
certificates are exchanged in whole or in part for Debt Securities in
individually certificated form, a global Debt Security may not be transferred
except as a whole to a nominee of the Depositary for such global Debt Security,
or by a nominee for the Depositary to the Depositary, or to a successor of the
Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities and the rights of, and limitations on, owners of beneficial
interests in a global Debt Security representing all or a portion of a series of
Debt Securities will be described in the Prospectus Supplement relating to such
series.
CERTAIN COVENANTS
Limitations on Liens. The Indenture provides that TGP will not, nor will it
permit any Restricted Subsidiary (as defined below) to, create, assume, incur or
suffer to exist any Lien (as defined below) upon any Principal Property (as
defined below), whether owned or leased on the date of the Indenture or
thereafter acquired, to secure any Debt (as defined below) of TGP or any other
Person (as defined below) (other than the Debt Securities issued thereunder),
without in any such case making effective provision whereby all of the
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Debt Securities Outstanding thereunder shall be secured equally and ratably
with, or prior to, such Debt so long as such Debt shall be so secured. There is
excluded from this restriction:
(i) any Lien upon any property or assets of TGP or any Restricted
Subsidiary in existence on the date of the Indenture or created pursuant to
an "after-acquired property" clause or similar term in existence on the
date of the Indenture or any mortgage, pledge agreement, security agreement
or other similar instrument in existence on the date of the Indenture;
(ii) any Lien upon any property or assets created at the time of
acquisition of such property or assets by TGP or any Restricted Subsidiary
or within one year after such time to secure all or a portion of the
purchase price for such property or assets or Debt incurred to finance such
purchase price, whether such Debt was incurred prior to, at the time of or
within one year of such acquisition;
(iii) any Lien upon any property or assets existing thereon at the
time of the acquisition thereof by TGP or any Restricted Subsidiary
(whether or not the obligations secured thereby are assumed by TGP or any
Restricted Subsidiary);
(iv) any Lien upon any property or assets of a Person existing thereon
at the time such Person becomes a Restricted Subsidiary by acquisition,
merger or otherwise;
(v) the assumption by TGP or any Restricted Subsidiary of obligations
secured by any Lien existing at the time of the acquisition by TGP or any
Restricted Subsidiary of the property or assets subject to such Lien or at
the time of the acquisition of the Person which owns such property or
assets;
(vi) any Lien on property to secure all or part of the cost of
construction or improvements thereon or to secure Debt incurred prior to,
at the time of, or within one year after completion of such construction or
making of such improvements, to provide funds for any such purpose;
(vii) any Lien on any oil, gas, mineral and processing and other plant
properties to secure the payment of costs, expenses or liabilities incurred
under any lease or grant or operating or other similar agreement in
connection with or incident to the exploration, development, maintenance or
operation of such properties;
(viii) any Lien arising from or in connection with a conveyance by TGP
or any Restricted Subsidiary of any production payment with respect to oil,
gas, natural gas, carbon dioxide, sulphur, helium, coal, metals, minerals,
steam, timber or other natural resources;
(ix) any Lien in favor of TGP or any Restricted Subsidiary;
(x) any Lien created or assumed by TGP or any Restricted Subsidiary in
connection with the issuance of Debt the interest on which is excludable
from gross income of the holder of such Debt pursuant to the Internal
Revenue Code of 1986, as amended, or any successor statute, for the purpose
of financing, in whole or in part, the acquisition or construction of
property or assets to be used by TGP or any Subsidiary;
(xi) any Lien upon property or assets of any foreign Restricted
Subsidiary to secure Debt of that foreign Restricted Subsidiary;
(xii) Permitted Liens (as defined below);
(xiii) any Lien created by any program providing for the financing,
sale or other disposition of trade or other receivables classified as
current assets in accordance with United States generally accepted
accounting principles entered into by TGP or by a Subsidiary or Restricted
Affiliate (as defined below) of TGP, provided that such program is on terms
customary for similar transactions, or any document executed by any
Subsidiary in connection therewith, provided that such Lien is limited to
the trade or other receivables in respect of which such program is created
or exists, and the proceeds thereof;
(xiv) any Lien on Margin Stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System);
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(xv) any Lien upon any additions, improvements, replacements, repairs,
fixtures, appurtenances or component parts thereof attaching to or required
to be attached to property or assets pursuant to the terms of any mortgage,
pledge agreement, security agreement or other similar instrument, creating
a Lien upon such property or assets permitted by clauses (i) through (xiv),
inclusive, above; or
(xvi) any extension, renewal, refinancing, refunding or replacement
(or successive extensions, renewals, refinancing, refundings or
replacements) of any Lien, in whole or in part, that is referred to in
clauses (i) through (xv), inclusive, above, or of any Debt secured thereby;
provided, however, that the principal amount of Debt secured thereby shall
not exceed the greater of the principal amount of Debt so secured at the
time of such extension, renewal, refinancing, refunding or replacement and
the original principal amount of Debt so secured (plus in each case the
aggregate amount of premiums, other payments, costs and expenses required
to be paid or incurred in connection with such extension, renewal,
refinancing, refunding or replacement); provided further, however, that
such extension, renewal, refinancing, refunding or replacement shall be
limited to all or a part of the property (including improvements,
alterations and repairs on such property) subject to the encumbrance so
extended, renewed, refinanced, refunded or replaced (plus improvements,
alterations and repairs on such property).
Notwithstanding the foregoing, under the Indenture, TGP may, and may permit
any Restricted Subsidiary to, create, assume, incur, or suffer to exist any Lien
upon any Principal Property to secure Debt of TGP or any Person (other than the
Debt Securities) that is not excepted by clauses (i) through (xvi), inclusive,
above without securing the Debt Securities issued under the Indenture, provided
that the aggregate principal amount of all Debt then outstanding secured by such
Lien and all similar Liens, together with all net sale proceeds from
Sale-Leaseback Transactions (as defined below) (excluding Sale-Leaseback
Transactions permitted by clauses (i) through (iv), inclusive, of the first
paragraph of the restriction on sale-leasebacks covenant described below) does
not exceed 15% of Consolidated Net Tangible Assets (as defined below).
Restriction on Sale-Leasebacks. The Indenture provides that TGP will not,
nor will it permit any Restricted Subsidiary to, engage in a Sale-Leaseback
Transaction, unless: (i) such Sale-Leaseback Transaction occurs within one year
from the date of acquisition of the Principal Property subject thereto or the
date of the completion of construction or commencement of full operations on
such Principal Property, whichever is later; (ii) the Sale-Leaseback Transaction
involves a lease for a period, including renewals, of not more than three years;
(iii) TGP or such Restricted Subsidiary would be entitled to incur Debt secured
by a Lien on the Principal Property subject thereto in a principal amount equal
to or exceeding the net sale proceeds from such Sale-Leaseback Transaction
without securing the Debt Securities; or (iv) TGP or such Restricted Subsidiary,
within a one-year period after such Sale-Leaseback Transaction, applies or
causes to be applied an amount not less than the net sale proceeds from such
Sale-Leaseback Transaction to (A) the repayment, redemption or retirement of
Funded Debt (as defined below) of TGP or any Subsidiary, or (B) investment in
another Principal Property.
Notwithstanding the foregoing, under the Indenture, TGP may, and may permit
any Restricted Subsidiary to, effect any Sale-Leaseback Transaction that is not
excepted by clauses (i) through (iv), inclusive, of the above paragraph,
provided that the net sale proceeds from such Sale-Leaseback Transaction,
together with the aggregate principal amount of outstanding Debt (other than the
Debt Securities) secured by Liens upon Principal Properties not excepted by
clauses (i) through (xvi), inclusive, of the first paragraph of the limitation
on liens covenant described above, do not exceed 15% of the Consolidated Net
Tangible Assets.
Certain Defined Terms. As used herein:
"Consolidated Net Tangible Assets" means, at any date of determination, the
total amount of assets after deducting therefrom (i) all current liabilities
(excluding (A) any current liabilities that by their terms are extendable or
renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed, and (B) current
maturities of long-term debt), and (ii) the value (net of any applicable
reserves) of all goodwill, trade names, trademarks, patents and other like
intangible assets, all as set forth on the consolidated balance sheet of TGP and
its consolidated subsidiaries for
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TGP's most recently completed fiscal quarter, prepared in accordance with
generally accepted accounting principles.
"Debt" means any obligation created or assumed by any Person for the
repayment of money borrowed and any purchase money obligation created or assumed
by such Person.
"Funded Debt" means all Debt maturing one year or more from the date of the
creation thereof, all Debt directly or indirectly renewable or extendible, at
the option of the debtor, by its terms or by the terms of any instrument or
agreement relating thereto, to a date one year or more from the date of the
creation thereof, and all Debt under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of one year or
more.
"Lien" means any mortgage, pledge, security interest, charge, lien or other
encumbrance of any kind, whether or not filed, recorded or perfected under
applicable law.
"Permitted Liens" means: (i) Liens upon rights-of-way for pipeline
purposes; (ii) any governmental Lien, mechanics', materialmen's, carriers' or
similar Lien incurred in the ordinary course of business which is not yet due or
which is being contested in good faith by appropriate proceedings and any
undetermined Lien which is incidental to construction; (iii) the right reserved
to, or vested in, any municipality or public authority by the terms of any
right, power, franchise, grant, license, permit or by any provision of law, to
purchase or recapture or to designate a purchaser of, any property; (iv) Liens
of taxes and assessments which are (A) for the then current year, (B) not at the
time delinquent, or (C) delinquent but the validity of which is being contested
at the time by TGP or any Subsidiary in good faith; (v) Liens of, or to secure
performance of, leases; (vi) any Lien upon, or deposits of, any assets in favor
of any surety company or clerk of court for the purpose of obtaining indemnity
or stay of judicial proceedings; (vii) any Lien upon property or assets acquired
or sold by TGP or any Restricted Subsidiary resulting from the exercise of any
rights arising out of defaults on receivables; (viii) any Lien incurred in the
ordinary course of business in connection with workmen's compensation,
unemployment insurance, temporary disability, social security, retiree health or
similar laws or regulations or to secure obligations imposed by statute or
governmental regulations; (ix) any Lien upon any property or assets in
accordance with customary banking practice to secure any Debt incurred by TGP or
any Restricted Subsidiary in connection with the exporting of goods to, or
between, or the marketing of goods in, or the importing of goods from, foreign
countries; or (x) any Lien in favor of the United States of America or any state
thereof, or any other country, or any political subdivision of any of the
foregoing, to secure partial, progress, advance or other payments pursuant to
any contract or statute, or any Lien securing industrial development, pollution
control or similar revenue bonds.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, other
entity, unincorporated organization, or government or any agency or political
subdivision thereof.
"Principal Property" means (a) any pipeline assets of TGP or any
Subsidiary, including any related facilities employed in the transportation,
distribution or marketing of natural gas, that are located in the United States
or Canada, and (b) any processing or manufacturing plant owned or leased by TGP
or any Subsidiary that is located within the United States or Canada, except, in
the case of either clause (a) or (b), any such assets or plant which, in the
opinion of TGP's Board of Directors, is not material in relation to the
activities of TGP and its Subsidiaries as a whole.
"Restricted Affiliate" means any Affiliate of TGP (other than a Subsidiary)
designated by TGP as a "Restricted Affiliate" by written notice to the Trustee.
An Affiliate shall not become a Restricted Affiliate until (a) such Affiliate
executes a guaranty (in form and substance reasonably satisfactory to the
Trustee) in favor of the Trustee, for the ratable benefit of the Holders,
guaranteeing the prompt and complete payment by the Trustee when due (whether at
the stated maturity, by acceleration or otherwise) of the Debt Securities; and
(b) the Trustee receives an Opinion of Counsel reasonably acceptable to the
Trustee, which shall be in form and substance satisfactory to the Trustee. The
Company may thereafter terminate the designation of such Affiliate as a
Restricted Affiliate by written notice to the Trustee at which time the
aforementioned guaranty of such Affiliate shall also terminate.
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"Restricted Subsidiary" means any Subsidiary of TGP owning or leasing any
Principal Property.
"Sale-Leaseback Transaction" means the sale or transfer by TGP or any
Restricted Subsidiary of any Principal Property to a Person (other than TGP or a
Subsidiary) and the taking back by TGP or any Restricted Subsidiary, as the case
may be, of a lease of such Principal Property.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture provides that TGP may, without the consent of the Trustee or
the holders of any Debt Securities issued thereunder, consolidate or merge with,
or sell, lease or transfer its properties and assets as, or substantially as, an
entirety to, any Person, provided that (i) either TGP is the surviving entity or
such successor Person shall expressly assume the due and punctual payment of the
principal of, and any premium and interest on, all the Debt Securities and the
performance or observance of every covenant and condition of the Indenture on
the part of TGP to be performed or observed, (ii) immediately after giving
effect to the transaction, no Default or Event of Default exists, and (iii) TGP
has delivered any Officer's Certificate and Opinion of Counsel required by the
Indenture. Any such successor Person shall succeed to and be substituted for,
and may exercise every right and power of, TGP under the Indenture with the same
effect as if it had been named a party in the Indenture and TGP shall, except in
the case of a lease, be released and discharged from all its obligations under
the Debt Securities and the Indenture.
EVENTS OF DEFAULT
An "Event of Default" will occur under the Indenture with respect to Debt
Securities of any series issued thereunder upon: (a) default in the payment of
the principal of, or premium, if any, on, any Debt Security of such series at
its maturity; (b) default in the payment of any interest on any Debt Security of
such series when it becomes due and payable and continuance of such default for
a period of 30 days; (c) default in the performance, or breach, of any term,
covenant or warranty contained in the Indenture with respect to such series for
a period of 60 days upon giving written notice as provided in the Indenture; (d)
the occurrence of certain events of bankruptcy; or (e) any other Event of
Default applicable to such series.
The Indenture provides that if an Event of Default described in clauses
(a), (b), (c) or (e) above shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in principal amount of all affected
Debt Securities then outstanding (voting as a single class) may declare the
entire principal amount of all affected Debt Securities to be due and payable
immediately upon giving written notice as provided in the Indenture. In
addition, if an Event of Default described in clause (d) above shall have
occurred and be continuing, either the Trustee or holders of not less than 25%
in principal amount of all Debt Securities then outstanding may declare the
entire principal amount of all Debt Securities outstanding to be due and payable
immediately upon giving written notice as provided in the Indenture. The
Indenture provides that the holders of a majority in principal amount of Debt
Securities of all affected series then outstanding (voting as a single class)
may rescind and annul such declaration and its consequences under certain
circumstances.
The holders of a majority in aggregate principal amount of Debt Securities
outstanding (voting as a single class) may waive past defaults under the
Indenture with respect to all such Debt Securities and their consequences
(except a continuing default in the payment of principal of or premium, if any,
or interest on any Debt Security or a default in respect of any covenant or
provision of the Indenture which cannot be modified or amended by a supplemental
indenture without the consent of the holder of each outstanding Debt Security
affected thereby).
Pursuant to the Indenture, the holders of a majority in aggregate principal
amount of all affected Debt Securities then outstanding (voting as a single
class) may direct with respect to such series the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that such direction shall
not be in conflict with any rule of law or the Indenture. Before proceeding to
exercise any right or power under the Indenture at the direction of any holders,
the Trustee shall be entitled to receive from such holders reasonable security
or indemnity against the costs, expenses and liabilities which might be incurred
by it in compliance with any such direction.
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Under the terms of the Indenture, TGP is required to furnish to the Trustee
annually an Officer's Certificate to the effect that to the best of such
officer's knowledge, TGP is not in default in the performance and observance of
the terms, provisions and conditions of the Indenture or, if such officer has
knowledge that TGP is in default, specifying such default. The Indenture
requires the Trustee to give to all holders of Debt Securities outstanding
thereunder notice of any default by TGP in the manner provided in the Indenture,
unless such default shall have been cured or waived; however, except in the case
of a default in the payment of principal of and premium, if any, or interest, if
any, on any Debt Securities outstanding thereunder, the Trustee is entitled to
withhold such notice in the event that the board of directors, the executive
committee, or a trust committee of directors or certain officers of the Trustee
in good faith determine that withholding such notice is in the interest of the
holders of such outstanding Debt Securities.
SATISFACTION AND DISCHARGE; LEGAL AND COVENANT DEFEASANCE
Under the terms of the Indenture, TGP may satisfy and discharge certain
obligations to holders of Debt Securities of any series which have not already
been delivered to the Trustee for cancellation and which have either become due
and payable or are by their terms due and payable within one year or are to be
called for redemption within one year by (i) depositing or causing to be
deposited with the Trustee funds in an amount sufficient to pay the principal
and any premium and interest to the date of such deposit (in case of Debt
Securities of such series which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be, (ii) paying or causing to be
paid all other sums payable under the Indenture with respect to such Debt
Securities, and (iii) delivering to the Trustee an Officer's Certificate and
Opinion of Counsel relating to such satisfaction and discharge.
The Indenture also provides that TGP and any other obligor, if any, will be
discharged from any and all obligations in respect of any series of Debt
Securities issued thereunder (excluding, however, certain obligations, such as
the obligation to register the transfer or exchange of such outstanding Debt
Securities of such series, to replace stolen, lost, mutilated or destroyed
certificates, to pay principal and interest on the original stated due dates or
specified redemption date, to make any sinking fund payments, and to maintain
paying agencies) on the 91st day following the deposit referred to in the
following clause (i), subject to the following conditions: (i) the irrevocable
deposit, in trust, of cash or U.S. Government Obligations (or a combination
thereof) which through the payment of interest and principal thereof in
accordance with their terms will provide cash in an amount sufficient to pay the
principal and interest and premium, if any, on the outstanding Debt Securities
of such series and any mandatory sinking fund payments, in each case, on the
stated maturity of such payments in accordance with the terms of the Indenture
and the outstanding Debt Securities of such series or on any Redemption Date
established pursuant to clause (iii) below; (ii) TGP's receipt of an Opinion of
Counsel based on the fact that (A) TGP has received from, or there has been
published by, the Internal Revenue Service a ruling, or (B) since the date of
the Indenture, there has been a change in the applicable federal income tax law,
in either case, to the effect that, and confirming that, the holders of the Debt
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and defeasance and will be subject to
federal income tax on the same amount and in the same manner and at the same
times, as would have been the case if such deposit and defeasance had not
occurred; (iii) if the Debt Securities are to be redeemed prior to Stated
Maturity (other than from mandatory sinking fund payments or analogous
payments), notice of such redemption shall have been duly given pursuant to the
Indenture or provision therefor satisfactory to the Trustee shall have been
made; (iv) no Event of Default or event which with notice or lapse of time or
both would become an Event of Default will have occurred and be continuing on
the date of such deposit; and (v) TGP's delivery to the Trustee of an Officer's
Certificate and an Opinion of Counsel, each stating that the conditions
precedent under the Indenture have been complied with.
Under the Indenture, TGP also may discharge its obligations referred to
above under "-- Certain Covenants" and "-- Consolidation, Merger and Sale of
Assets", as well as certain of its obligations relating to reporting obligations
under the Indenture, in respect of any series of Debt Securities on the 91st day
following the deposit referred to in clause (i) in the immediately preceding
paragraph, subject to satisfaction of the conditions described in clauses (i),
(iii), (iv) and (v) in the immediately preceding paragraph with respect to
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such series of Debt Securities and the delivery of an Opinion of Counsel
confirming that the holders of the Debt Securities will not recognize income,
gain or loss for Federal income tax purposes as a result of such deposit and
covenant defeasance and will be subject to Federal income tax on the same amount
and in the same manner and at the same times, as would have been the case if
such deposit and covenant defeasance had not occurred.
CHANGES IN CONTROL AND HIGHLY LEVERAGED TRANSACTIONS
The Indenture does not contain provisions requiring redemption of the Debt
Securities issued thereunder, or adjustment to any terms of such Debt
Securities, upon any change in control of TGP.
Other than the limitations on Liens and the restriction on Sale-Leaseback
Transactions described above under "-- Certain Covenants", the Indenture does
not contain any covenant or other provisions designed to afford holders of the
Debt Securities issued thereunder protection in the event of a highly leveraged
transaction involving TGP.
MODIFICATION OF THE INDENTURE
The Indenture provides that TGP and the Trustee may enter into supplemental
indentures without the consent of the holders of Debt Securities issued
thereunder to: (a) secure any of such Debt Securities; (b) evidence the
succession of another Person to TGP under the Indenture and the Debt Securities
and the assumption by such successor Person of the obligations of TGP
thereunder; (c) add covenants and Events of Default for the benefit of the
holders of all or any series of such Debt Securities or to surrender any right
or power conferred by the Indenture upon TGP; (d) add to, change or eliminate
any of the provisions of the Indenture, provided that any such addition, change
or elimination shall become effective only after there are no such Debt
Securities of any series entitled to the benefit of such provision outstanding;
(e) establish the forms or terms of the Debt Securities of any series issued
thereunder; (f) cure any ambiguity or correct any inconsistency in the
Indenture; (g) evidence the acceptance of appointment by a successor trustee;
and (h) qualify the Indenture under the Trust Indenture Act.
The Indenture also contains provisions permitting TGP and the Trustee, with
the consent of the holders of a majority in aggregate principal amount of all
outstanding Debt Securities affected by such supplemental indenture (voting as a
single class), to add any provisions to, or change in any manner or eliminate
any of the provisions of, the Indenture, or modify in any manner the rights of
the holders of such Debt Securities, provided that TGP and the Trustee may not,
without the consent of the holder of each outstanding Debt Security affected
thereby, (a) change the stated maturity of the principal of or any installment
of principal of or interest, if any, on, any Debt Security, or reduce the
principal amount thereof or premium, if any, on or the rate of interest thereon,
(b) reduce the percentage in principal amount of Debt Securities required for
any such supplemental indenture or for any waiver provided for in the Indenture,
(c) change TGP's obligation to maintain an office or agency for payment of Debt
Securities and the other matters specified therein, or (d) modify any of the
provisions of the Indenture relating to the execution of supplemental indentures
with the consent of holders of Debt Securities which are discussed in this
paragraph or modify any provisions relating to the waiver by holders of past
defaults and certain covenants, except to increase any required percentage or to
provide that certain other provisions of the Indenture cannot be modified or
waived without the consent of the holder of each outstanding Debt Security
affected thereby.
NO PERSONAL LIABILITY OF OFFICERS, DIRECTORS, EMPLOYEES OR STOCKHOLDERS
No director, officer, employee or stockholder, as such, of TGP or any of
its affiliates shall have any personal liability in respect of the obligations
of TGP under the Indenture or the Debt Securities by reason of his, her or its
status as such.
APPLICABLE LAW
The Indenture is, and the Debt Securities offered hereby will be, governed
by, and construed in accordance with, the laws of the State of New York.
23
<PAGE> 25
CONCERNING THE TRUSTEE
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set forth
in the Indenture. If an Event of Default has occurred and is continuing, the
Trustee will use the same degree of care and skill in its exercise of the rights
and powers vested in it by the Indenture as a prudent person would exercise
under the circumstances in the conduct of such person's own affairs.
The Indenture contains limitations on the rights of the Trustee, should it
become a creditor of TGP, to obtain payment of claims in certain cases or to
realize on certain property received by it in respect of such claims, as
security or otherwise. The Trustee is permitted to engage in other transactions;
provided, however, that if it acquires any conflicting interest, it must
eliminate such conflict or resign.
The Chase Manhattan Bank, a New York banking corporation, is the Trustee
under the Indenture. TGP and its affiliates maintain banking and other
commercial relationships with The Chase Manhattan Bank in the ordinary course of
business. In particular, the Chase Manhattan Bank is the agent and a lender
under the revolving credit facilities of El Paso and El Paso Tennessee,
including the El Paso Tennessee Credit Facility.
PLAN OF DISTRIBUTION
TGP may offer or sell Debt Securities to or through one or more
underwriters, dealers or agents as designated from time to time, or through a
combination of such methods, and also may offer or sell the Debt Securities
directly to one or more other purchasers. TGP may sell Debt Securities as soon
as practicable after effectiveness of the Registration Statement of which this
Prospectus is a part.
A Prospectus Supplement will set forth the terms of the offering of the
particular series of Debt Securities offered thereby, including: (i) the name or
names of any underwriters or agents; (ii) the initial public offering or
purchase price of such series of Debt Securities; (iii) any underwriting
discounts, commissions, and other items constituting underwriters' compensation
and any other discount, concessions, or commissions allowed or reallowed or paid
by any underwriters to other dealers; (iv) any commissions paid to any agents;
(v) the net proceeds to TGP from the sales; and (vi) any securities exchanges or
markets on which the Debt Securities may be listed.
Unless otherwise set forth in the Prospectus Supplement relating to a
particular series of Debt Securities, the obligations of the underwriters to
purchase such series of Debt Securities will be subject to certain conditions
precedent and each of the underwriters with respect to such series of Debt
Securities will be obligated to purchase all of the Debt Securities of such
series allocated to it if any such Debt Securities are purchased. Any initial
public offering price and any discounts or concessions allowed, reallowed or
paid to dealers may be changed from time to time.
The Debt Securities may be offered and sold by TGP directly or through
agents designated by TGP from time to time. Unless otherwise indicated in the
related Prospectus Supplement, each such agent will be acting on a best efforts
basis for the period of its appointment. Any agent participating in the
distribution of Debt Securities may be deemed to be an "underwriter", as that
term is defined in the Securities Act, of the Debt Securities so offered and
sold. The Debt Securities also may be sold to dealers at the applicable price to
the public set forth in the Prospectus Supplement relating to such series of
Debt Securities. Such dealers may be deemed to be "underwriters" within the
meaning of the Securities Act. Underwriters, dealers and agents may be entitled,
under agreements entered into with TGP, to indemnification by TGP against
certain civil liabilities, including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, TGP in the ordinary course of
business.
All Debt Securities offered will be a new issue of securities with no
established trading market. Any underwriter to whom Debt Securities are sold by
TGP for public offering and sale may make a market in such Debt, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. The Debt Securities may or may not be listed
on a national securities exchange or a foreign
24
<PAGE> 26
securities exchange. No assurance can be given as to the liquidity of or the
trading markets for any Debt Securities.
LEGAL MATTERS
The validity of the Debt Securities will be passed upon for TGP by Fried,
Frank, Harris, Shriver & Jacobson (a partnership including professional
corporations), New York, New York. If the Debt Securities are being distributed
in an underwritten offering, the validity of the Debt Securities will be passed
upon for the underwriters by counsel identified in the related Prospectus
Supplement.
EXPERTS
The audited combined financial statements and schedule of the Energy
Businesses of Tennessee Gas Pipeline Company as of December 31, 1995 and 1994,
and for each of the three years in the period ended December 31, 1995, included
in the January Form 8-K incorporated by reference herein, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
25
<PAGE> 27
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than selling
or underwriting discounts and commissions, to be incurred by TGP in connection
with the issuance and distribution of the Securities being registered. All
amounts shown are estimated except the Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 303,031
Blue Sky expenses, including legal fees..................... 175,000*
Printing and engraving expenses............................. 400,000*
Legal fees and expenses..................................... 200,000*
Rating agency fees.......................................... 150,000*
Accounting fees and expenses................................ 75,000*
Trustee's fees and expenses................................. 12,500
Miscellaneous............................................... 34,469*
----------
Total............................................. $1,350,000*
==========
</TABLE>
- ---------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement in connection with specified actions, rules, or
proceedings, whether civil, criminal, administrative or investigative (other
than action by or in the right of the corporation -- a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement or otherwise.
Section 17 of the By-laws of TGP provide as follows:
"Each person who is or was a director or officer of the
corporation, or who serves or may have served at the request of the
corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise (including the
heirs, executors, administrators or estate of such person) and who was
or is a party or is threatened to be made a party to any threatened,
pending or completed claim, action, suit or proceeding, whether
criminal, civil, administrative or investigative, including appeals,
shall be indemnified by the corporation as a matter of right to the
full extent permitted or authorized by the Corporation Law of the
state of incorporation of the corporation, as it may from time to time
be amended, against any expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him in his capacity as a director or officer,
or arising out of his status as a director or officer. Each person who
is or was an employee or agent of the corporation, or who serves or
may have served at the request of the corporation as an employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise (including the heirs, executors, administrators or
estate of such person) may, at the discretion of the Board, be
indemnified by the corporation to the same extent as provided herein
with respect to directors and officers of the corporation.
II-1
<PAGE> 28
The corporation may, but shall not be obligated to, maintain
insurance at its expense, to protect itself and any person who is or
was a director, officer, employee or agent of the corporation, or is
or was serving as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such. The corporation
may, but shall not be obligated to, pay expenses incurred in defending
a civil or criminal action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding.
The indemnification provided by this Section 17 shall not be
exclusive of any other rights to which those seeking indemnification
may be entitled as a matter of law or under any agreement, vote of
stockholders or disinterested directors or otherwise."
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (i) any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
payment of unlawful dividends or unlawful stock purchases or redemptions, or
(iv) any transaction from which the director derived an improper, personal
benefit. The Certificate of Incorporation of TGP contains such a provision.
El Paso maintains directors' and officers' liability insurance which
provides for payment, on behalf of the directors and officers of El Paso and its
subsidiaries, including TGP, of certain losses of such persons (other than
matters uninsurable under law) arising from claims, including claims arising
under the Securities Act, for acts or omissions by such persons while acting as
directors or officers of TGP and/or its subsidiaries, including TGP, as the case
may be.
Reference is made to Exhibit 1 hereto, which contains provisions for
indemnification of TGP, and its directors, officers, and any controlling
persons, against certain liabilities for information furnished by the
underwriters and/or agents, as applicable, expressly for use in the Prospectus
Supplements.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBITS
----------- --------
<C> <S>
1 -- Form of Underwriting Agreement
4 -- Form of Indenture between TGP and The Chase Manhattan
Bank, as trustee
5 -- Opinion of Fried, Frank, Harris, Shriver & Jacobson as to
the legality of the Debt Securities
*12 -- Computation of Ratio of Earnings to Fixed Charges
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Fried, Frank, Harris, Shriver & Jacobson
(included in Exhibit 5)
+24 -- Powers of Attorney
*25 -- Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank, as
Trustee
</TABLE>
- ---------------
* Previously filed.
+ Appearing on page II-4 of the Registration Statement originally filed on
January 22, 1997.
ITEM 17. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
II-2
<PAGE> 29
(b) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs A(1)(a) and A(1)(b) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on February 25, 1997.
TENNESSEE GAS PIPELINE COMPANY
By: /s/ H. BRENT AUSTIN
----------------------------------
H. Brent Austin
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates as indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board and Director February 25, 1997
- ----------------------------------------------------- (Principal Executive Officer)
William A. Wise
* President and Director February 25, 1997
- -----------------------------------------------------
John W. Somerhalder II
/s/ H. BRENT AUSTIN Senior Vice President and Director February 25, 1997
- ----------------------------------------------------- (Principal Financial Officer)
H. Brent Austin
* Vice President and Controller February 25, 1997
- ----------------------------------------------------- (Principal Accounting Officer)
Jeffrey I. Beason
*By: /s/ H. BRENT AUSTIN
------------------------------------------------
H. Brent Austin
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 31
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBITS
- ----------- --------
<C> <S> <C>
1 -- Form of Underwriting Agreement
4 -- Form of Indenture between TGP and The Chase Manhattan
Bank, as trustee
5 -- Opinion of Fried, Frank, Harris, Shriver & Jacobson as to
the legality of the Debt Securities
*12 -- Computation of Ratio of Earnings to Fixed Charges
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Fried, Frank, Harris, Shriver & Jacobson
(included in Exhibit 5)
+24 -- Powers of Attorney
*25 -- Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank, as
Trustee
</TABLE>
- ---------------
* Previously filed.
+ Appearing on page II-4 of the Registration Statement originally filed on
January 22, 1997.
<PAGE> 1
EXHIBIT 1
TENNESSEE GAS PIPELINE COMPANY
(A DELAWARE CORPORATION)
[TITLE OF DEBT SECURITIES]
TERMS AGREEMENT
Dated: [ ], 199[ ]
Tennessee Gas Pipeline Company
El Paso Energy Building
1001 Louisiana
Houston, Texas 77002
Dear Sirs:
We (the "Representative(s)") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or underwriters
being herein called the "Underwriters"), and we understand that Tennessee Gas
Pipeline Company, a Delaware corporation (the "Company"), proposes to issue and
sell $[ ] aggregate principal amount of its [Title of Debt Securities]
(the "Debt Securities"). The Debt Securities will be issued pursuant to the
provisions of an Indenture dated as of [ ], 1997 (the "Indenture"),
between the Company and The Chase Manhattan Bank, as trustee (the "Trustee").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective principal amounts of Debt
Securities set forth below opposite their respective names at the purchase
price(s) set forth below.
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT OF DEBT SECURITIES
----------- -----------------------------------
<S> <C>
$
--------
Total........................................... $
========
</TABLE>
The Debt Securities shall have the terms set forth in the Prospectus, dated
[ ], 199[ ], and the Prospectus Supplement, dated [ ],
199[ ], including the following:
Title:
[Currency: ]
Principal Amount to be Issued:
Maturity Date:
Interest Rate or Formula:
Interest Payment Dates: Each [ ] and [ ], commencing [ ]
Redemption Provisions:
1
<PAGE> 2
Sinking Fund Requirements:
Initial Public Offering Price: [ ]%, plus accrued interest, if any, or
amortized original issue discount, if any, from [ ], 19[ ].
Purchase Price: [ ]%, plus accrued interest, if any, or amortized
original issue discount, if any, from [ ], 19[ ], payable in
[immediately available] funds.
Selling Concession: [ ]% of the principal amount of the Debt
Securities.
Dealer Allowance and Reallowance: [ ]% of the principal amount of the
Debt Securities.
Other Terms:
Closing Date and Location:
Address of Notices to Representative(s):
All provisions contained in the document attached as Annex A hereto
entitled "Tennessee Gas Pipeline Company -- Underwriting Agreement Standard
Provisions (Debt Securities)", are hereby incorporated by reference in their
entirety and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined in
such document are used herein as therein defined.
Please confirm your agreement by having an authorized officer sign a copy
of this Terms Agreement in the space set forth below.
Very truly yours,
[NAME(S) OF REPRESENTATIVE(S)]
Acting severally on behalf of
[itself] [themselves] and the
several Underwriters named herein
By: [NAME OF LEAD-REPRESENTATIVE]
By:
------------------------------------
Name:
Title:
Accepted as of the date first above written:
TENNESSEE GAS PIPELINE COMPANY
By:
- ------------------------------------------------------
Name:
Title:
2
<PAGE> 3
ANNEX A
TENNESSEE GAS PIPELINE COMPANY
(A DELAWARE CORPORATION)
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
Dated: [ ], 19[ ]
Tennessee Gas Pipeline Company, a Delaware corporation (the "Company"),
proposes to issue and sell up to $[ ] aggregate principal amount of its
unsecured debt securities (the "Debt Securities"), from time to time in one or
more offerings on terms determined at the time of sale. The Debt Securities will
be issued under an Indenture to be dated as of [ ], 1997, as amended,
modified and supplemented from time to time (the "Indenture"), between the
Company and The Chase Manhattan Bank, as trustee (the "Trustee"). Each issue of
Debt Securities may vary as to the aggregate principal amount, maturity date,
interest rate or formula and timing of payment thereof, redemption provisions,
conversion provisions and sinking fund requirements, if any, and any other
variable terms which the Indenture contemplates may be set forth in the Debt
Securities as issued from time to time.
This is to confirm the arrangements with respect to the purchase of Debt
Securities from the Company by the Representative(s) and the several
Underwriters listed in the applicable terms agreement (the "Terms Agreement")
entered into between the Representative(s) and the Company of which these
Underwriting Agreement Standard Provisions (Debt Securities) are attached as
Annex A thereto. Terms defined in the Terms Agreement are used herein as therein
defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-20199) in respect of
the Debt Securities and has filed such amendments thereto as may have been
required to the date of the Terms Agreement. Such registration statement, as
amended, has been declared effective by the Commission and the Indenture has
been qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). Such registration statement, as amended through the date of the
Terms Agreement, including all documents incorporated or deemed to be
incorporated therein by reference, as from time to time amended or supplemented
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Securities Act of 1933, as amended (the "Securities Act"), or
otherwise, and any registration statement filed pursuant to Rule 462(b) under
the Securities Act are herein collectively referred to as the "Registration
Statement". The prospectus constituting a part of the Registration Statement and
any amendments or supplements to such prospectus through the date of the Terms
Agreement taken together with any term sheet meeting the requirements of Rule
434(b) under the Securities Act, as applicable, are collectively referred to
herein as the "Prospectus"; provided, however, that a supplement to the
Prospectus contemplated by Section 3(a) hereof (a "Prospectus Supplement") shall
be deemed to have supplemented the Prospectus only with respect to the offering
of Debt Securities to which it relates; provided further, however, that if any
revised prospectus or prospectus supplement shall be provided to the
Representative(s) on behalf of the Underwriters by the Company for use in
connection with the offering of the Debt Securities that differs from the
Prospectus (whether or not such revised prospectus or prospectus supplement is
required to be filed by the Company pursuant to Rule 424(b) under the Securities
Act), the term "Prospectus" shall refer to such revised prospectus or prospectus
supplement, as the case may be, from and after the time it is first provided to
the Representative(s) on behalf of the Underwriters for such use. Any reference
herein or in the Terms Agreement to the Registration Statement or the Prospectus
shall be deemed to refer to and include the documents incorporated by reference
or deemed to be incorporated by reference therein pursuant to Item 12 of Form
S-3 that have been filed on or before the date of the Terms Agreement or are to
be filed thereafter under the Exchange Act and are so filed thereafter; and any
reference herein to the terms "amend", "amended", "amendment", "supplement" or
"supplemented" with respect to the Registration Statement or the Prospectus
shall be deemed to refer to and include any such document filed or to be filed
under the Exchange Act.
1
<PAGE> 4
1. Representations and Warranties. The Company represents and warrants to
each of the Underwriters named in the Terms Agreement that:
(a) The Registration Statement has become effective under the
Securities Act, no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose
are pending before or, to the best of the Company's knowledge, contemplated
by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder; (ii)
each part of the Registration Statement, when such part became effective,
did not contain, and each such part, as amended or supplemented, if
applicable, will not contain, any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (iii) the Registration
Statement and the Prospectus comply, and, as amended or supplemented, if
applicable, will comply, in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder; and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section
1(b) do not apply (A) to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
the Representative(s) expressly for use in the Registration Statement or
Prospectus, or (B) to that part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) of the Trustee under
the Trust Indenture Act.
(c) The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Delaware, has the corporate
power and authority to own its properties and to conduct its business as
described in the Prospectus and 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 to the extent that the failure to be so
qualified or to be in good standing would not have a material adverse
effect on the assets, business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect").
(d) Each significant subsidiary of the Company within the meaning of
Regulation S-X (each hereinafter referred to as a "Subsidiary") has been
duly incorporated and is validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its properties and to conduct its business as described in
the Prospectus and 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 to the extent that the failure to be so qualified or
be in good standing would not have a Material Adverse Effect.
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
(f) The Indenture has been duly authorized, executed and delivered by
the Company and duly qualified under the Trust Indenture Act and, when duly
executed and delivered by the Trustee, will be a valid and binding
agreement of the Company, enforceable in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency
(including all laws relating to fraudulent conveyance), reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights generally and general principles of equity,
regardless of whether enforcement is considered in a proceeding in equity
or at law (collectively, the "Bankruptcy Exceptions").
(g) The Debt Securities being sold pursuant to the applicable Terms
Agreement have, as of the date of such Terms Agreement, been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters in accordance with
2
<PAGE> 5
the terms of such Terms Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company, in each
case enforceable in accordance with their respective terms, except as the
enforcement thereof may be limited by the Bankruptcy Exceptions; and the
Debt Securities being sold pursuant to the applicable Terms Agreement
conform in all material respects to the description thereof contained in
the Prospectus.
(h) Neither the Company nor any of its Subsidiaries are (i) in
violation of their respective charters or by-laws, or (ii) in violation of
or in default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or their respective property is bound, except in
the case of clause (ii) for such violations or defaults as would not,
individually or in the aggregate, have a Material Adverse Effect.
(i) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture and
the Debt Securities will not violate (i) the Restated Certificate of
Incorporation, as amended, or By-laws of the Company, (ii) any provision of
applicable law, (iii) any agreement or other instrument binding upon the
Company or any Subsidiaries, or (iv) any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any Subsidiary, except, in the case of clauses (ii) through (iv),
inclusive, for such violations as would not, individually or in the
aggregate, have a Material Adverse Effect. No consent, approval,
authorization or order of or qualification with any U.S. governmental body
or agency is required for the performance by the Company of its obligations
under this Agreement, the Indenture or the Debt Securities, except (x) such
as may be required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Debt Securities, or (y) where
the failure to obtain such consent, approval, authorization, order or
qualification would not, individually or in the aggregate, have a Material
Adverse Effect or materially adversely affect the offering of the Debt
Securities as contemplated in the Prospectus Supplement.
(j) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be
stated in or contemplated by the Registration Statement and Prospectus,
there has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the assets, business,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(k) Other than as set forth or incorporated by reference in the
Registration Statement and Prospectus, there are no legal or governmental
proceedings instituted or, to the best of the Company's knowledge,
threatened against the Company or any Subsidiaries that would restrict the
issuance and sale of the Debt Securities as contemplated by the Prospectus
or that are required under the Securities Act to be disclosed therein and
that are not disclosed. No contract or document of a character required
under the Securities Act to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement is
not so described or filed as required.
(l) The financial statements, together with related schedules and
notes forming part of the Registration Statement and the Prospectus (and
any amendment or supplement thereto), present fairly in all material
respects the consolidated or combined financial position, results of
operations and cash flows of the combined energy businesses of the Company
on the basis stated in the Registration Statement at the respective dates
or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and
statistical information and data of the Company (including any pro forma
financial information) set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) is, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
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<PAGE> 6
(m) The Company is not, nor is it directly or indirectly controlled by
or acting on behalf of any person that is, (i) an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and
the rules and regulations promulgated by the Commission thereunder, 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.
(n) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
2. Purchase and Sale. The obligations of the Underwriters to purchase, and
of the Company to sell, the Debt Securities shall be evidenced by the Terms
Agreement. The Terms Agreement shall specify the principal amount of Debt
Securities, the names of the Underwriters participating in such offering
(subject to substitution as provided in Section 8 hereof), the principal amount
of Debt Securities that each such Underwriter severally agrees to purchase, the
purchase price to be paid by the Underwriters for the Debt Securities, the
initial public offering price, the time and place of delivery and payment and
any other terms of the Debt Securities not already specified in the Indenture
(including, but not limited to, designations, denominations, interest rates or
formulas and payment dates, maturity dates, conversion provisions, redemption
provisions and sinking fund requirements).
The several commitments of the Underwriters to purchase Debt Securities
pursuant to the Terms Agreement shall be deemed to have been made on the basis
of the representations and warranties herein contained and shall be subject to
the terms and conditions herein set forth.
Payment of the purchase price for, and delivery of, any Debt Securities to
be purchased by the Underwriters shall be made at the offices of [ ],
or at such other place as shall be agreed upon by the Representative(s) and the
Company, at [9:00] A.M., New York City time, on the third or fourth business day
(unless otherwise permitted by the Commission pursuant to Rule 15c6-1 under the
Exchange Act, or postponed in accordance with the provisions of Section 8
hereof) following the date of the Terms Agreement or such other time as shall be
agreed upon by the Representative(s) and the Company (each such time and date
being referred to as a "Closing Time"). Payment shall be made to the Company by
wire transfer of immediately available (same-day) funds, against delivery to the
Representative(s) for the respective accounts of the Underwriters of the Debt
Securities to be purchased by them. The certificate(s) for such Debt Securities
shall be in such denomination(s) and registered in such name(s) as the
Representative(s) may request in writing at least two business days prior to the
applicable Closing Time. Such certificate(s) will be made available for
examination and packaging by the Representative(s) on or before the first
business day prior to Closing Time.
3. Covenants of the Company. In further consideration of the agreements of
the Underwriters contained herein, the Company covenants as follows:
(a) Immediately following the execution of the Terms Agreement, the
Company will prepare a Prospectus Supplement setting forth the principal
amount of Debt Securities covered thereby and their terms not otherwise
specified in the Indenture, the names of the Underwriters participating in
the offering and the principal amount of Debt Securities which each
severally has agreed to purchase, the price at which the Debt Securities
are to be purchased by the Underwriters from the Company, the initial
public offering price, the selling concession and reallowance, if any, and
such other information as the Representative(s) and the Company deem
appropriate in connection with the offering of the Debt Securities. The
Company will promptly transmit copies of the Prospectus Supplement to the
Commission for filing pursuant to Rule 424 under the Securities Act and
will furnish to the Underwriters named therein as many copies of the
Prospectus and such Prospectus Supplement as the Representative(s) shall
reasonably request.
(b) The Company will furnish to the Representative(s), without charge,
one signed copy of the Registration Statement (including exhibits thereto)
and for delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and, during the period
referred
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<PAGE> 7
to in paragraph (c) below, as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments
thereto or to the Registration Statement as the Representative(s) may
reasonably request.
(c) At any time when the Prospectus is required by the Securities Act
to be delivered in connection with sales of the Debt Securities, the
Company will give the Representative(s) notice of its intention to file any
amendment to the Registration Statement or any amendment or supplement to
the Prospectus (including any term sheet within the meaning of Rule 434
under the Securities Act ), whether pursuant to the Securities Act, the
Exchange Act or otherwise, and will furnish the Representative(s) with
copies of each such proposed amendment or supplement or other documents
proposed to be filed a reasonable time in advance of filing.
(d) The Company will advise the Representative(s) promptly and, if
requested by the Representative(s), confirm such advice in writing, (i) of
any request by the Commission for amendments to the Registration Statement
or amendments or supplements to the Prospectus or for additional
information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Debt Securities for offering or sale in
any jurisdiction, or the initiation of any proceeding for such purposes,
and (iii) of the happening of any event during the period referred to in
paragraph (c) above which makes any statement of a material fact made in
the Registration Statement or the Prospectus untrue or which requires the
making of any additions to or changes in the Registration Statement in
order to make the statements therein not misleading or the Prospectus in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal or lifting of such order at the earliest possible time.
(e) If, at any time when the Prospectus is required by the Securities
Act to be delivered in connection with sales of any of the Debt Securities,
any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or counsel for
the Company, to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances under which they were
made when the Prospectus is delivered to a purchaser, not misleading, or
if, in the opinion of either such counsel, it is necessary to amend or
supplement the Prospectus to comply with U.S. laws, the Company will
promptly prepare and file with the Commission and furnish, at its own
expense, to the Underwriters, and to the dealers (whose names and addresses
the Representative(s) will furnish to the Company) to which Debt Securities
may have been sold by the Underwriters and to any other dealer upon
request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances under which they were made when the Prospectus
is delivered to a purchaser, be misleading or so that the Prospectus, as so
amended or supplemented, will comply with such U.S. laws.
(f) The Company will endeavor in good faith to qualify the Debt
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representative(s) shall reasonably request; provided,
however, that the Company shall not be obligated to file any general
consent to service or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will maintain
such qualification in effect for so long as may be required for the
distribution of the Debt Securities. The Company will file such statements
and reports as may be required by the laws of each jurisdiction in which
the Debt Securities have been qualified as above provided.
(g) With respect to each sale of Debt Securities, the Company will
make generally available to its security holders as soon as practicable an
earnings statement which shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 of the Commission thereunder.
(h) Unless otherwise provided in the Terms Agreement, during the
period (the "Lock-up Period") commencing on the date of the Terms Agreement
and ending on the later of termination of any trading restrictions and the
Closing Time with respect to the Debt Securities covered thereby (it being
understood that the Representative(s) promptly will notify the Company in
writing as to the termination
5
<PAGE> 8
of trading restrictions on such Debt Securities), the Company will not,
without the Representative(s)' prior consent, offer to sell, enter into any
agreement to sell, or guarantee any new issue of Debt Securities with a
maturity of [ ] year(s) or more, including additional Debt Securities;
provided, however, that the Lock-up Period shall in any event terminate on
the 30th day after the Closing Time. [Insert any other agreed upon
exceptions].
(i) The Company will use its reasonable efforts to do and perform all
things required or necessary to be done and performed under this Agreement
by the Company prior to the Closing Time and to satisfy all conditions
precedent to the delivery of the Debt Securities.
4. Conditions to Closing. The several obligations of the Underwriters to
purchase Debt Securities pursuant to the Terms Agreement are subject to the
following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct at the applicable Closing Time
with the same force and effect as if made on and as of such Closing Time.
(b) As of the applicable Closing Time, there shall not have been,
since the date of the Terms Agreement, any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
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 Securities Act.
(c) As of the applicable Closing Time, there shall not have been,
since the date of the Terms Agreement or since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, in each case, as amended and supplemented, any change, or any
development involving a prospective change, in the assets, business,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus, as
amended or supplemented as of such time, that, in the reasonable judgment
of the Representative(s), is material and adverse and that makes it, in the
reasonable judgment of the Representative(s), impracticable to market the
Debt Securities on the terms and in the manner contemplated in the
Prospectus, as so amended or supplemented.
(d) The Representative(s) shall have received at the applicable
Closing Time a certificate, dated the applicable Closing Time and signed by
an executive officer of the Company, to the effect set forth in clauses (b)
above and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct at the applicable
Closing Time and that the Company has complied in all material respects
with all of the agreements and satisfied all of the conditions on its part
to be performed or satisfied on or before the applicable Closing Time. The
officer signing and delivering such certificate may rely upon the best of
his knowledge after due inquiry.
(e) The Representative(s) shall have received at the applicable
Closing Time (i) an opinion of Fried, Frank, Harris, Shriver & Jacobson,
special counsel to the Company, addressing the matters set forth in Exhibit
A attached hereto, and (ii) an opinion of the General Counsel or the
Associate General Counsel of the Company, addressing the matters set forth
in Exhibit B attached hereto.
(f) The Representative(s) shall have received at the applicable
Closing Time an opinion of [ ], special counsel for the
Underwriters, dated the applicable Closing Time, with respect to all such
matters as the Representative(s) may reasonably request.
(g) The Representative(s) shall have received on the date of the Terms
Agreement and as of the applicable Closing Time a letter, dated such date,
in form and substance satisfactory to the Representative(s), from
independent accountants for the Company, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus.
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<PAGE> 9
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representative(s) by notice to the Company at any time at or prior to the
applicable Closing Time, and such termination shall be without any liability of
any party to any other party except as may be provided in Sections 5, 6 and 8.
5. Payment of Expenses. The Company will pay all expenses, fees and taxes
incident to the performance of its obligations under the Terms Agreement (which
incorporates by reference this Agreement), including, without limitation, (i)
the preparation and filing of the Registration Statement and the Prospectus and
all amendments and supplements thereto, and the reproduction of this Agreement,
(ii) the preparation, issuance and delivery of the Debt Securities to the
Underwriters, (iii) the fees and disbursements of the Company's counsel and
accountants and the Trustee and its counsel, (iv) the qualification of the Debt
Securities under securities laws in accordance with the provisions of Section
3(f), including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
any Blue Sky Surveys and Legal Investment Surveys, (v) the printing and delivery
to the Underwriters in quantities as hereinabove stated of copies of the
Registration Statement and any amendments thereto, and of the Prospectus and any
amendment or supplement thereto, (vi) the reproduction and delivery to the
Underwriters of copies of the Indenture and any Blue Sky Surveys and Legal
Investment Surveys, (vii) the fees, if any, charged by rating agencies for
rating the Debt Securities, (viii) the fees and expenses, if any, incurred in
connection with the listing of the Debt Securities on any national securities
exchange, and (ix) the fees and expenses, if any, relating to clearance with the
National Association of Securities Dealers, Inc.
6. Indemnification and Contribution. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Underwriter 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 Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (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, in the light of the
circumstances under which they were made, 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
furnished to the Company in writing by any Underwriter through the
Representative(s) expressly for use therein or was based on the Form T-1 of the
Trustee. The foregoing indemnity with respect to any preliminary prospectus or
any Prospectus that is supplemented or amended shall not inure to the benefit of
any Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased the Debt
Securities which are the subject thereof if such Underwriter in a timely manner
received a copy of such Prospectus (or such Prospectus as so amended or
supplemented), and a copy of the Prospectus (or the Prospectus as amended or
supplemented), excluding documents incorporated therein by reference, was not
sent or given by or on behalf of such Underwriter to such person, at or prior to
the confirmation of the sale of the Debt Securities to such person in any case
where delivery of a Prospectus (or an amended or supplemented Prospectus) at or
prior to the written confirmation of the sale of the Debt Securities is required
by the Securities Act and the untrue statement or omission or the alleged untrue
statement or omission was corrected in the Prospectus (or the Prospectus as
amended or supplemented).
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement 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
from and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred by the
Company, its directors, such officers 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 Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company shall
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<PAGE> 10
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, in light of the
circumstances under which they were made, not misleading, but only with
reference to information relating to such Underwriter furnished to the Company
by such Underwriter in writing through the Representative(s) expressly for use
in the Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
Promptly after receipt by an indemnified party under the first or second
paragraph in this Section 6 of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party in writing
of the commencement thereof; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall pay
the reasonable expenses of legal counsel to the indemnified party as incurred
and shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably 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 shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation, and the indemnifying party shall not be responsible for the cost
of more than one counsel for all indemnified parties (excluding any necessary
local counsel) in connection with any actions arising from the same facts. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim, 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 any indemnified party.
If the indemnification provided for in the first or second paragraph in
this Section 6 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 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 the Underwriters on the
other hand from the offering of the Debt 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 Underwriters 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 Underwriters on the other hand
in connection with the offering of the Debt Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering of such
Debt Securities (before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus Supplement,
bear to the aggregate public offering price of the Debt Securities. The relative
fault of the Company on the one hand and of the Underwriters 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 omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 6
are several in proportion to the respective principal amounts of Debt Securities
purchased by each of such Underwriters and not joint.
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<PAGE> 11
The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. 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 any such action or claim.
Notwithstanding the provisions of this Section 6, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Debt Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 6 and
the representations and warranties of the Company contained herein or made
pursuant hereto 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 any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its directors or officers or any person controlling the
Company, and (iii) acceptance of and payment for any of the Debt Securities.
7. Termination. This Agreement may be terminated, upon written notice given
by the Representative(s) to the Company, at any time prior to the applicable
Closing Time, if (a) after the execution and delivery of the Terms Agreement and
prior to the Closing Time (i) since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as may
otherwise be stated in or contemplated by the Registration Statement and the
Prospectus, any material adverse change, or any development involving a
prospective material adverse change, in the assets, business, financial
condition or results of operations of the Company and its subsidiaries taken as
a whole occurs, (ii) 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 or the NASDAQ National Market, (iii) trading of any
securities of the Company shall have been suspended on any national securities
exchange or on the NASDAQ National Market, (iv) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities, or (v) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the reasonable judgment of the Representative(s), is
material and adverse, and (b) in the case of any of the events specified in
clauses (a)(i) through (v), such event, singly or together with any other such
event, makes it, in the reasonable judgment of the Representative(s),
impracticable to market the Debt Securities on the terms and in the manner
contemplated by the Prospectus and the Prospectus Supplement, as such may be
amended or supplemented.
8. Defaulting Underwriters. If one or more of the Underwriters
participating in an offering of Debt Securities shall fail or refuse at the
applicable Closing Time to purchase Debt Securities which it or they are
obligated to purchase under the applicable Terms Agreement (the "Defaulted
Securities"), and the principal amount of Defaulted Securities is not more than
one-tenth of the aggregate principal amount of the Debt Securities to be
purchased pursuant to the Terms Agreement, the non-defaulting Underwriters named
in such Terms Agreement shall be obligated severally in the proportions that the
principal amount of Debt Securities set forth opposite their respective names
above bears to the aggregate principal amount of Debt Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as the Representative(s) may specify, to purchase the Debt
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided, however, that in no event shall
the principal amount of Debt Securities that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 8 by
an amount in excess of one-ninth of such principal amount of Debt Securities
without the written consent of such Underwriter. If, at the applicable Closing
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<PAGE> 12
Time, any Underwriter or Underwriters shall fail or refuse to purchase Debt
Securities and the aggregate principal amount of Debt Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Debt Securities to be purchased pursuant to the Terms Agreement, and
arrangements satisfactory to the Representative(s) and the Company for the
purchase of such Debt Securities are not made within 48 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either the
Representative(s) or the Company shall have the right to postpone the Closing
Time but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, 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 Underwriters or such Underwriters 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 Underwriters in connection with this Agreement or
the offering of the Debt Securities.
9. Parties. This Agreement shall inure to the benefit of and be binding
upon the Company and any Underwriter who becomes a party hereto, and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto or thereto and their respective successors and the
controlling persons and officers and directors referred to in Section 6 and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties and their respective successors
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Debt Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
10. Counterparts. The Terms Agreement may be signed with counterpart
signature pages or in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. 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.
13. Notices. All references herein and in the applicable Terms Agreement to
the Representative(s) or the Underwriters when made in connection with any
notice to or communication by or with such Representative(s) or the Underwriters
shall be given to the Representative(s) at the address set forth in the
applicable Terms Agreement.
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<PAGE> 13
EXHIBIT A
OPINION OF FRIED, FRANK, HARRIS, SHRIVER & JACOBSON,
COUNSEL FOR THE COMPANY
The opinion of counsel for the Company to be delivered pursuant to Section
4(e) of the Underwriting Agreement shall be to the effect that:
1. The Registration Statement has become effective under the
Securities Act, and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for that purpose are pending before or, to such
counsel's knowledge, contemplated by the Commission.
2. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
3. The form and terms of the Debt Securities have been duly authorized
and established in conformity with the provisions of the Indenture by all
necessary corporate action by the Company, and when such Debt Securities
have been duly executed, authenticated and delivered against payment
therefor in accordance with the provisions of the Indenture and the
Underwriting Agreement, they will constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms and the terms of the Indenture, except as such enforcement
may be limited by the Bankruptcy Exceptions; and the Indenture has been
duly authorized, executed and delivered by the Company, has been qualified
under the Trust Indenture Act, and constitutes a legal, valid and binding
obligation enforceable against the Company in accordance with its terms,
except as such enforcement may be limited by the Bankruptcy Exceptions.
4. The execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Underwriting Agreement, the
Indenture and the Debt Securities will not violate any provision of
applicable United States federal law, New York law or the Delaware General
Corporation Law, or the Restated Certificate of Incorporation, as amended,
or By-laws, as amended, of the Company.
5. No consent, approval, authorization or order of or qualification
with any United States federal, New York or (with respect to matters
arising under the Delaware General Corporation Law) Delaware governmental
body or agency is required for the performance by the Company of its
obligations under the Underwriting Agreement, the Indenture or the Debt
Securities, except such as may be required under the Securities Act and the
rules and regulations of the Commission thereunder, and the Trust Indenture
Act and the rules and regulations of the Commission thereunder, which have
been obtained, or as may be required under the securities or Blue Sky laws
of the various states in connection with the offer and sale of the Debt
Securities, as to which such counsel need not express any opinion, or
except where the failure to obtain such consent, approval, authorization,
order or qualification would not, individually or in the aggregate, have a
Material Adverse Effect.
6. The Company is not (A) an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder, or (B) 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.
7. The statements (A) in the Prospectus Supplement under the caption
"Description of Offered Securities" and in the Prospectus under the caption
"Description of Debt Securities", and (B) in the Registration Statement
under Item 15, insofar as such statements constitute a summary of the
United States federal or New York or Delaware General Corporation Law legal
matters referred to therein, fairly present the information disclosed
therein in all material respects.
A-1
<PAGE> 14
8. (A) Each document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for financial
statements and schedules and other financial or statistical data included
or incorporated by reference therein or omitted therefrom as to which such
counsel need not express any opinion) appeared on its face to be
appropriately responsive when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder, and (B) the Registration Statement and Prospectus
(except for financial statements and schedules and other financial or
statistical data included or incorporated by reference therein or omitted
therefrom as to which such counsel need not express any opinion) appeared
on their face to be appropriately responsive as to form in all material
respects with the requirements of the Securities Act, the Trust Indenture
Act and the applicable rules and regulations of the Commission thereunder.
In addition, such counsel shall state that in the course of the preparation
by the Company of the Registration Statement, the Prospectus and the Prospectus
Supplement (including the documents incorporated by reference therein), such
counsel participated in conferences with certain of the officers and
representatives of the Company, counsel to the Company and the Company's
independent accountants, at which the Registration Statement, the Prospectus and
the Prospectus Supplement were discussed. Such counsel shall state that, between
the date of effectiveness of the Registration Statement and the time of delivery
of such counsel's opinion letter, such counsel participated in additional
conferences with certain officers and representatives of the Company, at which
portions of the Registration Statement, the Prospectus and any Prospectus
Supplement were discussed. Given the limitations inherent in the independent
verification of factual matters and the character of determinations involved in
the registration process, such counsel does not pass upon and need not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Prospectus or the Prospectus
Supplement, except as specifically described in the opinion in paragraph (7)
above. Subject to the foregoing and on the basis of the information such counsel
gained in the performance of the services referred to above, including
information obtained from officers and other representatives of the Company and
the Company's independent accountants, such counsel shall state that no facts
have come to such counsel's attention that have caused it to believe that the
Registration Statement, at the time it became effective, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus and the Prospectus Supplement, as of their
respective dates, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Also, subject to the foregoing, such counsel shall state
that no facts have come to its attention in the course of the proceedings
described in the second sentence of this paragraph that cause such counsel to
believe that the Prospectus or the Prospectus Supplement as of the date and time
of delivery of such counsel's opinion letter contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
With respect to the preceding paragraph, Fried, Frank, Harris, Shriver &
Jacobson may state that (A) their opinion and belief is based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification, except as
specified, and (B) for purposes of paragraphs (iv) and (v), such counsel may
state (1) that they have reviewed only those statutes, rules and regulations
that in their experience are applicable to transactions of the type contemplated
by the Indenture and the Underwriting Agreement, and (2) that they do not act as
United States regulatory counsel to the Company in connection with, and do not
hold themselves out as experts in, the regulation of the generation,
transportation, distribution or delivery of natural gas, oil, electricity or
other specially regulated commodities or services, including pipelines,
transmission lines, storage facilities and related facilities and equipment, or
the import or export of such commodities or services.
Such counsel need express no opinion, view or belief, however, with respect
to (i) financial statements, schedules or notes thereto or other financial and
statistical data included or incorporated by reference in or omitted from the
Registration Statement, the Prospectus or the Prospectus Supplement, (ii) any
part of the
A-2
<PAGE> 15
Registration Statement which shall constitute a Statement of Eligibility on Form
T-1 under the Trust Indenture Act, or (iii) the Delaware corporation known prior
to December 12, 1996 as Tenneco Inc. and any of its subsidiaries or its
businesses prior to December 12, 1996 other than the operations of Old Tenneco
(as defined in the Prospectus) related to the transmission and marketing of
natural gas.
Such counsel may state (i) that the opinions expressed above are limited to
the federal laws of the United States, the laws of the State of New York, and
the General Corporation Law of the State of Delaware, and (ii) that no opinion,
view or belief is being expressed with respect to the following documents
incorporated by reference in the Registration Statement and the Prospectus: (A)
the Form 10-K (as defined in the Prospectus); and (B) the Form 10-Qs (as defined
in the Prospectus).
A-3
<PAGE> 16
EXHIBIT B
OPINION OF [ ],
[GENERAL COUNSEL] [ASSOCIATE GENERAL COUNSEL] OF THE COMPANY
The opinion of [ ], [General Counsel] [Associate General Counsel] of
the Company, to be delivered pursuant to Section 4(e) of the Underwriting
Agreement shall be to the effect that:
1. The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority to own its
properties and to conduct its business as described in the Prospectus, as
amended or supplemented, and is 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 to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect.
3. Each Subsidiary has been duly incorporated and is validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its properties
and to conduct its business as described in the Prospectus and is 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 to the extent that
the failure to be so qualified or be in good standing would not have a
Material Adverse Effect.
4. To the best of such counsel's knowledge, the execution and delivery
by the Company of, and the performance by the Company of its obligations
under, the Underwriting Agreement, the Indenture and the Debt Securities
will not violate (A) any agreement or other instrument binding upon the
Company or any of its Subsidiaries, or (B) any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the Company
or any of its Subsidiaries except, in each case, for such violations as
would not, individually or in the aggregate, have a Material Adverse
Effect.
5. The statements (A) under the caption "Item 3 -- Legal Proceedings"
of the Company's most recent annual report on Form 10-K incorporated by
reference into the Prospectus, and (B) under the caption "Item 1 -- Legal
Proceedings" of Part II of the Company's quarterly reports on Form 10-Q, if
any, 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.
6. To the best knowledge of such counsel, after due inquiry, (A) there
are no legal or governmental proceedings instituted or threatened against
the Company or any of its subsidiaries that would restrict the issuance and
sale of the Debt Securities as contemplated by the Prospectus, or would be
required to be disclosed therein and that is not disclosed, and (B) there
are no statutes, regulations, contracts or other documents that are
required to be summarized in the Registration Statement or the Prospectus
or to be filed or incorporated by reference as exhibits to the Registration
Statement that are not summarized, filed or incorporated as required.
7. (A) Each document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for financial
statements and schedules and other financial or statistical data included
or incorporated by reference therein or omitted therefrom as to which such
counsel need not express any opinion) appeared on its face to be
appropriately responsive when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder, and (B) the Registration Statement and Prospectus
(except for financial statements and schedules and other financial or
statistical data included or incorporated by reference therein or omitted
therefrom as to which such counsel need not express any opinion) appeared
on their face to be appropriately responsive as to form in all material
respects with the requirements of the Securities Act, the Trust Indenture
Act and the applicable rules and regulations of the Commission thereunder.
B-1
<PAGE> 17
8. The execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Underwriting Agreement, the
Indenture and the Debt Securities 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 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 the Underwriting Agreement, the Indenture
or the Debt Securities, except in each of the foregoing cases for such
violations, or failures to obtain such consent, approval, authorization,
order or qualification, as would not, individually or in the aggregate,
have a Material Adverse Effect.
In addition, such counsel shall state that in the course of the preparation
by the Company of the Registration Statement, the Prospectus and the Prospectus
Supplement (including the documents incorporated by reference therein), such
counsel participated in conferences with certain of the officers and
representatives of the Company, counsel to the Company and the Company's
independent accountants, at which the Registration Statement, the Prospectus and
the Prospectus Supplement were discussed. Such counsel shall state that, between
the date of effectiveness of the Registration Statement and the time of delivery
of such counsel's opinion letter, such counsel participated in additional
conferences with certain officers and representatives of the Company, at which
portions of the Registration Statement, the Prospectus and the Prospectus
Supplement were discussed. Given the limitations inherent in the independent
verification of factual matters and the character of determinations involved in
the registration process, such counsel does not pass upon and need not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Prospectus or the Prospectus
Supplement, except as specifically described in paragraph (5) above. Subject to
the foregoing and on the basis of the information such counsel gained in the
performance of the services referred to above and in the performance of his
duties as [General Counsel] [Associate General Counsel] of the Company,
including information obtained from officers and other representatives of the
Company and the Company's independent accountants, such counsel shall state that
no facts have come to such counsel's attention that have caused him to believe
that the Registration Statement, at the time it became effective, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus and the Prospectus Supplement, as of their
respective dates, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Also, subject to the foregoing, such counsel shall state
that no facts have come to his attention in the course of the proceedings
described in the second sentence of this paragraph that cause such counsel to
believe that the Prospectus or the Prospectus Supplement as of the date and time
of delivery of such counsel's opinion letter contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Such counsel need express no opinion, view or belief, however, with respect
to (i) financial statements, schedules or notes thereto or other financial or
statistical data included or incorporated by reference in or omitted from the
Registration Statement or Prospectus or the Prospectus Supplement, (ii) any part
of the Registration Statement which shall constitute a Statement of Eligibility
on Form T-1 under the Trust Indenture Act, or (iii) the Delaware corporation
known prior to December 12, 1996 as Tenneco Inc. and any of its subsidiaries or
its businesses prior to December 12, 1996 other than the operations of Old
Tenneco (as defined in the Prospectus) related to the transmission and marketing
of natural gas.
Such counsel may state that the opinions expressed above are limited to the
federal laws of the United States and the laws of [Insert State].
B-2
<PAGE> 1
EXHIBIT 4
================================================================================
TENNESSEE GAS PIPELINE COMPANY
TO
THE CHASE MANHATTAN BANK
TRUSTEE
------------------
INDENTURE
DATED AS OF MARCH , 1997
------------------
================================================================================
<PAGE> 2
TENNESSEE GAS PIPELINE COMPANY
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318, INCLUSIVE, OF THE
TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
--------------- -----------------
<S> <C>
Section 310(a)(1)........................................ 609
(a)(2).............................................. 609
(a)(3).............................................. Not Applicable
(a)(4).............................................. Not Applicable
(b)................................................. 608
610
Section 311(a)........................................... 613
(b)................................................. 613
Section 312(a)........................................... 701
702
(b)................................................. 702
(c)................................................. 702
Section 313(a)........................................... 703
(b)................................................. 703
(c)................................................. 703
(d)................................................. 703
Section 314(a)........................................... 704
(a)(4).............................................. 101
1004
(b)................................................. Not Applicable
(c)(1).............................................. 101
102
(c)(2).............................................. 101
102
(c)(3).............................................. Not Applicable
(d)................................................. Not Applicable
(e)................................................. 102
Section 315(a)........................................... 601
(b)................................................. 602
(c)................................................. 601
(d)................................................. 601
(e)................................................. 514
Section 316(a)........................................... 101
(a)(1)(A)........................................... 502
512
(a)(1)(B)........................................... 513
(a)(2).............................................. Not Applicable
(b)................................................. 508
(c)................................................. 104
Section 317(a)(1)........................................ 503
(a)(2).............................................. 504
(b)................................................. 1003
Section 318(a)........................................... 107
</TABLE>
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
PARTIES........................................................... 1
RECITALS OF THE COMPANY........................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions........................................ 1
Act................................................ 2
Affiliate.......................................... 2
Alternate Program.................................. 2
Authenticating Agent............................... 2
Authorized Newspaper............................... 2
Bankruptcy Law..................................... 2
Board of Directors................................. 3
Board Resolution................................... 3
Business Day....................................... 3
Commission......................................... 3
Company............................................ 3
Company Request or Company Order................... 3
Consolidated Net Tangible Assets................... 3
Corporate Trust Office............................. 4
corporation........................................ 4
covenant defeasance................................ 4
Custodian.......................................... 4
Debt............................................... 4
Default............................................ 4
Defaulted Interest................................. 4
defeasance......................................... 4
Definitive Security................................ 4
Depositary......................................... 4
Dollar or $........................................ 4
Event of Default................................... 5
Exchange Act....................................... 5
Funded Debt........................................ 5
Global Security.................................... 5
Holder............................................. 5
Indenture.......................................... 5
interest........................................... 5
Interest Payment Date.............................. 5
Lien............................................... 5
Margin Stock....................................... 6
Maturity........................................... 6
</TABLE>
<PAGE> 4
ii
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Notice of Default.................................. 6
Officer's Certificate.............................. 6
Opinion of Counsel................................. 6
Original Issue Discount Security................... 6
Outstanding........................................ 6
Paying Agent....................................... 7
Periodic Offering.................................. 7
Permitted Liens.................................... 8
Person............................................. 8
Place of Payment................................... 9
Predecessor Security............................... 9
Principal Property................................. 9
Redemption Date.................................... 9
Redemption Price................................... 9
Regular Record Date................................ 9
Restricted Affiliate............................... 9
Restricted Subsidiary.............................. 10
Sale-Leaseback Transaction......................... 10
Securities......................................... 10
Security Register and Security Registrar........... 10
Special Record Date................................ 10
Stated Maturity.................................... 10
Subsidiary......................................... 10
Trust Indenture Act................................ 10
Trustee............................................ 11
U.S. Government Obligations........................ 11
Vice President..................................... 11
SECTION 102. Compliance Certificates and Opinions............... 11
SECTION 103. Form of Documents Delivered to Trustee............. 12
SECTION 104. Acts of Holders; Record Dates...................... 12
SECTION 105. Notices, Etc., to Trustee and Company.............. 14
SECTION 106. Notice to Holders; Waiver.......................... 14
SECTION 107. Conflict with Trust Indenture Act.................. 15
SECTION 108. Effect of Headings and Table of Contents........... 15
SECTION 109. Successors and Assigns............................. 15
SECTION 110. Separability Clause................................ 15
SECTION 111. Benefits of Indenture.............................. 15
SECTION 112. Governing Law...................................... 16
SECTION 113. Legal Holidays..................................... 16
SECTION 114. Language of Notices, Etc........................... 16
SECTION 115. Incorporators, Stockholders, Officers and Directors
of the Company Exempt from Individual
Liability........................................ 16
</TABLE>
<PAGE> 5
iii
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.................................... 17
SECTION 202. Form of Face of Security........................... 17
SECTION 203. Form of Reverse of Security........................ 21
SECTION 204. Global Securities.................................. 27
SECTION 205. Form of Trustee's Certificate of Authentication
................................................. 28
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series............... 29
SECTION 302. Denominations...................................... 32
SECTION 303. Execution, Authentication, Delivery and Dating..... 32
SECTION 304. Temporary Securities............................... 34
SECTION 305. Registration, Registration of Transfer and
Exchange......................................... 35
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities... 37
SECTION 307. Payment of Interest; Interest Rights Preserved..... 38
SECTION 308. Persons Deemed Owners.............................. 39
SECTION 309. Cancellation....................................... 40
SECTION 310. Computation of Interest............................ 40
SECTION 311. CUSIP Numbers...................................... 40
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture............ 41
SECTION 402. Application of Trust Money......................... 42
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.................................. 42
SECTION 502. Acceleration of Maturity; Rescission and
Annulment........................................ 43
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee........................... 45
SECTION 504. Trustee May File Proofs of Claim................... 46
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities....................................... 46
SECTION 506. Application of Money Collected..................... 47
SECTION 507. Limitation on Suits................................ 47
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.................. 48
</TABLE>
<PAGE> 6
iv
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 509. Restoration of Rights and Remedies................. 48
SECTION 510. Rights and Remedies Cumulative..................... 48
SECTION 511. Delay or Omission Not Waiver....................... 49
SECTION 512. Control by Holders................................. 49
SECTION 513. Waiver of Past Defaults............................ 49
SECTION 514. Undertaking for Costs.............................. 50
SECTION 515. Waiver of Usury, Stay or Extension Laws............ 50
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities................ 50
SECTION 602. Notice of Defaults................................. 51
SECTION 603. Certain Rights of Trustee.......................... 51
SECTION 604. Not Responsible for Recitals or Issuance of
Securities....................................... 52
SECTION 605. May Hold Securities................................ 52
SECTION 606. Money Held in Trust................................ 53
SECTION 607. Compensation and Reimbursement..................... 53
SECTION 608. Disqualification; Conflicting Interests............ 54
SECTION 609. Corporate Trustee Required; Eligibility............ 54
SECTION 610. Resignation and Removal; Appointment of
Successor........................................ 54
SECTION 611. Acceptance of Appointment by Successor............. 56
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business......................................... 57
SECTION 613. Preferential Collection of Claims Against
Company.......................................... 58
SECTION 614. Appointment of Authenticating Agent................ 58
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.......................................... 60
SECTION 702. Preservation of Information; Communications to
Holders.......................................... 60
SECTION 703. Reports by Trustee................................. 61
SECTION 704. Reports by Company................................. 61
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms............................................ 62
SECTION 802. Successor Substituted.............................. 63
</TABLE>
<PAGE> 7
v
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders.......................................... 63
SECTION 902. Supplemental Indentures with Consent of Holders.... 64
SECTION 903. Execution of Supplemental Indentures............... 65
SECTION 904. Effect of Supplemental Indentures.................. 65
SECTION 905. Conformity with Trust Indenture Act................ 66
SECTION 906. Reference in Securities to Supplemental
Indentures....................................... 66
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest......... 66
SECTION 1002. Maintenance of Office or Agency.................... 66
SECTION 1003. Money for Securities Payments to Be Held in
Trust............................................ 67
SECTION 1004. Statement by Officers as to Default................ 68
SECTION 1005. Existence.......................................... 69
SECTION 1006. Limitations on Liens............................... 69
SECTION 1007. Restriction of Sale-Leaseback Transaction.......... 71
SECTION 1008. Waiver of Certain Covenants........................ 72
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article........................... 73
SECTION 1102. Election to Redeem; Notice to Trustee.............. 73
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed......................................... 73
SECTION 1104. Notice of Redemption............................... 74
SECTION 1105. Deposit of Redemption Price........................ 74
SECTION 1106. Securities Payable on Redemption Date.............. 75
SECTION 1107. Securities Redeemed in Part........................ 75
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article........................... 76
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities....................................... 76
SECTION 1203. Redemption of Securities for Sinking Fund.......... 76
</TABLE>
<PAGE> 8
vi
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE THIRTEEN
DEFEASANCE
SECTION 1301. Applicability of Article........................... 77
SECTION 1302. Legal Defeasance................................... 77
SECTION 1303. Covenant Defeasance................................ 79
SECTION 1304. Application by Trustee of Funds Deposited for
Payment of Securities............................ 80
SECTION 1305. Repayment to Company............................... 81
</TABLE>
Note: This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE> 9
INDENTURE dated as of March , 1997, between TENNESSEE GAS PIPELINE COMPANY,
a corporation duly organized and existing under the laws of Delaware (the
"Company"), having its principal office at 1001 Louisiana, Houston, Texas, and
THE CHASE MANHATTAN BANK, a New York banking corporation, as Trustee (the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured debentures, notes
or other evidences of indebtedness (the "Securities"), to be issued in one or
more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Company,
in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act that
are required to be a part of this Indenture and, to the extent applicable, shall
be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by
the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of any series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or
unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally
<PAGE> 10
2
accepted accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted in the United States at the date of such computation;
(4) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(5) the words "Article" and "Section" refer to an Article and Section,
respectively, of this Indenture.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Alternate Program" means any program providing for the financing, sale or
other disposition of trade or other receivables classified as current assets in
accordance with United States generally accepted accounting principles entered
into by the Company or a Subsidiary (or for purposes of Section 1006 only, any
Restricted Affiliate), provided that such program is on terms customary for
similar transactions.
"Authenticating Agent" means any Person authorized by the Trustee pursuant to
Section 614 to act on behalf of the Trustee to authenticate Securities of one or
more series.
"Authorized Newspaper" means a newspaper, in the English language or in an
official language of the country of publication, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.
<PAGE> 11
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"Board of Directors" means the board of directors of the Company, or the
executive or any other committee of that board duly authorized to act in respect
thereof.
"Board Resolution" means a copy of a resolution certified by the Secretary or
an Assistant Secretary of the Company, the principal financial officer of the
Company or any other authorized officer of the Company or a person duly
authorized by any of them, to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment or other
location, means, except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in that
Place of Payment or other location are authorized or obligated by law, executive
order or regulation to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order signed
in the name of the Company by its Chairman of the Board, its Chief Executive
Officer, its President, any of its Vice Presidents or any other authorized
officer of the Company or a person duly authorized by any of them, and delivered
to the Trustee.
"Consolidated Net Tangible Assets" means, at any date of determination, the
total amount of assets after deducting therefrom (i) all current liabilities
(excluding (A) any current liabilities that by their terms are extendable or
renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed, and (B) current
maturities of long-term debt), and (ii) the value (net of any applicable
reserves) of all goodwill, trade names, trademarks, patents and other
<PAGE> 12
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like intangible assets, all as set forth on the consolidated balance sheet of
the Company and its consolidated subsidiaries for the Company's most recently
completed fiscal quarter, prepared in accordance with generally accepted
accounting principles.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which at the date hereof is 450 West 33rd Street, New York, NY 10001.
"corporation" includes corporations, associations, partnerships, limited
liability companies, joint-stock companies and business trusts.
"covenant defeasance" has the meaning specified in Section 1303.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Debt" means any obligation created or assumed by any Person for the repayment
of money borrowed and any purchase money obligation created or assumed by such
Person.
"Default" means, with respect to a series of Securities, any event which is,
or after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
"Defaulted Interest" has the meaning specified in Section 307.
"defeasance" has the meaning specified in Section 1302.
"Definitive Security" means a Security other than a Global Security or a
temporary Security.
"Depositary" means, with respect to Securities of any series issuable in whole
or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301, until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter shall mean or include each Person which is then a Depositary
hereunder, and if at any time there is more than one such Person, shall be a
collective reference to such Persons.
"Dollar" or "$" means the coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts.
<PAGE> 13
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"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, and any statute successor thereto.
"Funded Debt" means all Debt maturing one year or more from the date of the
creation thereof, all Debt directly or indirectly renewable or extendible, at
the option of the debtor, by its terms or by the terms of any instrument or
agreement relating thereto, to a date one year or more from the date of the
creation thereof, and all Debt under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of one year or
more.
"Global Security" means a Security in global form that evidences all or part
of the Securities of any series and is authenticated and delivered to, and
registered in the name of, the Depositary for such Securities or a nominee
thereof.
"Holder" means a Person in whose name a Security is registered in the Security
Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument, and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" also shall include the terms of particular series of Securities
established as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Lien" means any mortgage, pledge, security interest, charge, lien or other
encumbrance of any kind, whether or not filed, recorded or perfected under
applicable law.
<PAGE> 14
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"Margin Stock" means "margin stock" as defined in Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in Section
501(3).
"Officer's Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President or any
other authorized officer of the Company or a person duly authorized by any of
them, and delivered to the Trustee. The officer signing an Officer's Certificate
given pursuant to Section 1004 shall be the principal executive, financial or
accounting officer of the Company.
"Opinion of Counsel" means a written opinion of legal counsel, who may be an
employee of or counsel for the Company and who shall be reasonably acceptable to
the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the stated principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent (other
than the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities; provided, however, that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
(3) Securities which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Securities have been authenticated
<PAGE> 15
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and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company; and
(4) Securities, except to the extent provided in Sections 1302 and 1303,
with respect to which the Company has effected defeasance or covenant
defeasance as provided in Article Thirteen.
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (A) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof on such date pursuant to Section 502, (B) the principal amount of a
Security denominated in one or more currencies or currency units other than U.S.
dollars shall be the U.S. dollar equivalent of such currencies or currency
units, determined in the manner provided as contemplated by Section 301 on the
date of original issuance of such Security, of the principal amount (or, in the
case of an Original Issue Discount Security, the U.S. dollar equivalent (as so
determined) on the date of original issuance of such Security of the amount
determined as provided in Clause (A) above) of such Security, and (C) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned as described in Clause (C)
above which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the principal
of or any premium or interest on any Securities on behalf of the Company.
"Periodic Offering" means an offering of Securities of a series from time to
time, the specific terms of which Securities, including, without limitation, the
<PAGE> 16
8
rate or rates of interest or formula for determining the rate or rates of
interest thereon, if any, the Stated Maturity or Stated Maturities thereof, the
original issue date or dates thereof, the redemption provisions, if any, with
respect thereto, and any other terms specified as contemplated by Section 301
with respect thereto, are to be determined by the Company upon the issuance of
such Securities.
"Permitted Liens" means (i) Liens upon rights-of-way for pipeline purposes;
(ii) any governmental Lien, mechanics', materialmen's, carriers' or similar Lien
incurred in the ordinary course of business which is not yet due or which is
being contested in good faith by appropriate proceedings and any undetermined
Lien which is incidental to construction; (iii) the right reserved to, or vested
in, any municipality or public authority by the terms of any right, power,
franchise, grant, license, permit or by any provision of law, to purchase or
recapture or to designate a purchaser of, any property; (iv) Liens of taxes and
assessments which are (A) for the then current year, (B) not at the time
delinquent, or (C) delinquent but the validity of which is being contested at
the time by the Company or any Subsidiary in good faith; (v) Liens of, or to
secure performance of, leases; (vi) any Lien upon, or deposits of, any assets in
favor of any surety company or clerk of court for the purpose of obtaining
indemnity or stay of judicial proceedings; (vii) any Lien upon property or
assets acquired or sold by the Company or any Restricted Subsidiary resulting
from the exercise of any rights arising out of defaults on receivables; (viii)
any Lien incurred in the ordinary course of business in connection with
workmen's compensation, unemployment insurance, temporary disability, social
security, retiree health or similar laws or regulations or to secure obligations
imposed by statute or governmental regulations; (ix) any Lien upon any property
or assets in accordance with customary banking practice to secure any Debt
incurred by the Company or any Restricted Subsidiary in connection with the
exporting of goods to, or between, or the marketing of goods in, or the
importing of goods from, foreign countries; or (x) any Lien in favor of the
United States of America or any state thereof, or any other country, or any
political subdivision of any of the foregoing, to secure partial, progress,
advance, or other payments pursuant to any contract or statute, or any Lien
securing industrial development, pollution control, or similar revenue bonds.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, other
entity,
<PAGE> 17
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unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment", when used with respect to the Securities of any series,
means, unless otherwise specifically provided for with respect to such series as
contemplated by Section 301, the office or agency of the Company in The City of
New York and such other place or places where, subject to the provisions of
Section 1002, the principal of and any premium and interest on the Securities of
that series are payable as specified as contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means (a) any pipeline assets of the Company or any
Subsidiary, including any related facilities employed in the transportation,
distribution or marketing of natural gas, that is located in the United States
or Canada, and (b) any processing or manufacturing plant owned or leased by the
Company or any Subsidiary and located within the United States or Canada,
except, in the case of either clause (a) or (b), any such assets or plant which,
in the opinion of the Board of Directors, is not material in relation to the
activities of the Company and its Subsidiaries as a whole.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date on
the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Restricted Affiliate" means any Affiliate of the Company (other than a
Subsidiary of the Company) designated by the Company as a "Restricted Affiliate"
by written notice to the Trustee; provided that such Affiliate shall not become
a Restricted Affiliate until such time that (a) such Affiliate executes a
guaranty (in form and substance reasonably satisfactory to the Trustee) in
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favor of the Trustee, for the ratable benefit of the Holders, guaranteeing the
prompt and complete payment by the Trustee when due (whether at the stated
maturity, by acceleration or otherwise) of the Securities; and (b) the Trustee
receives an Opinion of Counsel reasonably acceptable to the Trustee, which shall
be in form and substance satisfactory to the Trustee; provided, further, that
after such time as such Affiliate becomes a Restricted Affiliate, the Company
may terminate the designation of such Affiliate as a Restricted Affiliate by
written notice to the Trustee at which time the aforementioned guaranty of such
Affiliate shall also terminate.
"Restricted Subsidiary" means any Subsidiary of the Company owning or leasing
any Principal Property.
"Sale-Leaseback Transaction" means the sale or transfer by the Company or any
Restricted Subsidiary of any Principal Property to a Person (other than the
Company or a Subsidiary) and the taking back by the Company or any Restricted
Subsidiary, as the case may be, of a lease of such Principal Property.
"Securities" has the meaning stated in the first recital of this Indenture and
more particularly means any Securities authenticated and delivered under this
Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any installment
of principal thereof or interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries, or by the Company and one or more other Subsidiaries. For
the purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the
date as of which this instrument was executed, except as otherwise
<PAGE> 19
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provided in Section 905; provided, however, that if the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean each Trustee with respect to Securities of that series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged, or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, each of which are not callable or redeemable at the option of the
issuer thereof.
"Vice President", when used with respect to the Company or Trustee, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates or opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officer's Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 1004) shall include:
(1) a statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating thereto;
<PAGE> 20
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(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
<PAGE> 21
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substantially similar tenor signed (either physically or by means of a facsimile
or an electronic transmission, provided that such electronic transmission is
transmitted through the facilities of a Depositary) by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered (either physically or by means of a facsimile or an electronic
transmission, provided that such electronic transmission is transmitted through
the facilities of a Depositary) to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 315 of the
Trust Indenture Act) conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership, principal amount and serial numbers of Securities held by any
Person, and the date of commencement of such Person's holding the same, shall be
proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other action of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
Without limiting the foregoing, a Holder entitled hereunder to give or take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
<PAGE> 22
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more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any different part of such principal amount.
The Company may set any day as the record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Securities of such series, but the Company shall have no obligation to do so.
With regard to any record date set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to give or take the
relevant action, whether or not such Holders remain Holders after such record
date.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act
of Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trustee
Administration Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to
it at 1001 Louisiana, Houston, Texas 77002, to the attention of the Secretary,
or at any other address previously furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid (if international mail, by air
mail), to each Holder affected by such event, at his address as it appears in
the Security Register, not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders. Any
notice
<PAGE> 23
15
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of the
Trust Indenture Act that is required under such Act to be a part of and govern
this Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give
to any Person, other than the parties hereto and their successors hereunder and
<PAGE> 24
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the Holders, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
SECTION 114. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent, waiver or Act
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
SECTION 115. Incorporators, Stockholders, Officers and Directors of the
Company Exempt from Individual Liability.
No recourse under or upon any obligation, covenant or agreement of or
contained in this Indenture or of or contained in any Security, or for any claim
based thereon or otherwise in respect thereof, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or any successor Person, either directly or through the
Company or any successor Person, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that all such liability is hereby expressly waived
and released as a condition of, and as a part of the consideration for, the
execution of this Indenture and the issue of the Securities.
<PAGE> 25
17
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth in
this Article, or in such other form as shall be established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by an authorized officer or other authorized person on
behalf of the Company and delivered to the Trustee at or prior to the delivery
of the Company Order contemplated by Section 303 for the authentication and
delivery of such Securities.
SECTION 202. Form of Face of Security.
[Insert any legend required by the United States Internal Revenue Code and the
regulations thereunder.]
<PAGE> 26
18
[If a Global Security, -- insert legend required by Section 204 of the
Indenture] [If applicable, insert -- UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
<PAGE> 27
19
TENNESSEE GAS PIPELINE COMPANY
[TITLE OF SECURITY]
NO.
- ------------------------ U.S.$
[CUSIP NO.
- --------------------]
TENNESSEE GAS PIPELINE COMPANY, a corporation duly incorporated and existing
under the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [ ], or registered assigns, the
principal sum of [ ] United States Dollars on [if the Security is to
bear interest prior to Maturity, insert -- , and to pay interest thereon from
[ ], or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on and in each year,
commencing [ ], at the rate of [ ]% per annum, until the principal
hereof is paid or made available for payment [if applicable, insert -- , and at
the rate of [ ]% per annum on any overdue principal and premium and on any
overdue installment of interest]. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the [ ] or [ ]
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice of which shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in such Indenture].
[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
<PAGE> 28
20
interest at the rate of [ ]% per annum, which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of [ ]% per annum, which shall accrue from the
date of such demand for payment to the date payment of such interest has been
made or duly provided for, and such interest shall also be payable on demand.]
[If a Global Security, insert -- Payment of the principal of [(and premium, if
any)] and [if applicable, insert -- any such] interest on this Security will be
made by transfer of immediately available funds to a bank account in [
] designated by the Holder in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts [state other currency].]
[If a Definitive Security insert -- Payment of the principal of [(and premium,
if any)] and [if applicable, insert -- any such] interest on this Security will
be made at the office or agency of the Company maintained for that purpose in ,
[in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts] [state other
currency] [or subject to any laws or regulations applicable thereto and to the
right of the Company (as provided in the Indenture) to rescind the designation
of any such Paying Agent, at the [main] offices of [ ] in
[ ] and in [ ], or at such other offices or agencies as the
Company may designate, by [United States Dollar] [state other currency] check
drawn on, or transfer to a [United States Dollar] account maintained by the
payee with, a bank in The City of New York [ ] (so long as the applicable
Paying Agent has received proper transfer instructions in writing at least [ ]
days prior to the payment date)] [if applicable, insert -- ; provided, however,
that payment of interest may be made at the option of the Company by [United
States Dollar] [state other currency] check mailed to the addresses of the
Persons entitled thereto as such addresses shall appear in the Security
Register] [or by transfer to a [United States Dollar] [state other currency]
account maintained by the payee with a bank in The City of New York [state other
Place of Payment] (so long as the applicable Paying Agent has received proper
transfer instructions in writing by the Record Date prior to the applicable
Interest Payment Date)].]
<PAGE> 29
21
Reference is hereby made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
TENNESSEE GAS PIPELINE COMPANY
BY:
----------------------------------
[TITLE]
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the Company
(the "Securities"), issued and to be issued in one or more series under an
Indenture dated as of March , 1997 (the "Indenture"), between the Company and
The Chase Manhattan Bank, as Trustee (the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. As
provided in the Indenture, the Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking, purchase or analogous funds, if any, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided or permitted. This Security is one of the series designated on the face
hereof [if applicable, insert -- , limited in aggregate principal amount to
U.S.$ ].
<PAGE> 30
22
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, [if
applicable, insert -- (1) on [ ] in any year commencing with the year
[ ] and ending with the year [ ] through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [if applicable, insert -- on or after [ ], ], as
a whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): If redeemed [if
applicable, insert -- on or before [ ], [ ]%, and if redeemed]
during the 12-month period beginning [ ] of the years indicated,
<TABLE>
<CAPTION>
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
---- ---------- ---- ----------
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to [ ]% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, (1) on
[ ] in any year commencing with the year [ ] and ending with
the year [ ] through operation of the sinking fund for this series at
the Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [if applicable, insert -- on or after [ ], ],
as a whole or in part, at the election of the Company, at the Redemption Prices
for redemption otherwise than through operation of the sinking fund (expressed
as percentages of the principal amount) set forth in the table below: If
<PAGE> 31
23
redeemed during the 12-month period beginning [ ] of the years
indicated,
<TABLE>
<CAPTION>
REDEMPTION PRICE REDEMPTION PRICE FOR
FOR REDEMPTION REDEMPTION OTHERWISE THAN
THROUGH OPERATION THROUGH OPERATION
YEAR OF THE SINKING FUND OF THE SINKING FUND PRICE
---- ------------------- -------------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to [ ]% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- The sinking fund for this series provides for the
redemption on [ ] in each year beginning with the year [ ]
and ending with the year [ ] of [if applicable, -- not less than
$ ("mandatory sinking fund") and not more than] $ aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [if
applicable, -- mandatory] sinking fund payments may be credited against
subsequent [if applicable, -- mandatory] sinking fund payments otherwise
required to be made [if applicable, -- in the inverse order in which they become
due].]
[If the Security is subject to redemption in part of any kind, insert -- In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert -- The Securities of this series are not redeemable
prior to Stated Maturity.]
<PAGE> 32
24
[If the Security is not an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If an Event
of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable,
and (ii) of interest on any overdue principal and overdue interest, all of the
Company's obligations in respect of the payment of the principal of and
interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series to be affected (voting as one class). The
Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Outstanding Securities of all affected series
(voting as one class), on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture. The Indenture permits, with certain exceptions as therein provided,
the Holders of a majority in principal amount of Securities of all affected
series then Outstanding (voting as a single class) to waive past defaults under
the Indenture with respect to such Securities and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of
<PAGE> 33
25
this series, the Holders of not less than 25% in principal amount of the
Securities of all affected series at the time Outstanding (treated as a single
class) shall have made written request to the Trustee to institute proceedings
in respect of such Event of Default as Trustee and offered the Trustee
reasonable indemnity and the Trustee shall not have received from the Holders of
a majority in principal amount of Securities of this series at the time
Outstanding a direction inconsistent with such request, and shall have failed to
institute any such proceeding, for 60 days after receipt of such notice, request
and offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof or [any premium or] interest hereon on or after the respective due dates
expressed herein.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and [any premium and]
interest on this Security at the times, place(s) and rate, and in the coin or
currency, herein prescribed.
[If a Global Security, insert -- This Global Security or portion hereof may
not be exchanged for Definitive Securities of this series except in the limited
circumstances provided in the Indenture.
The holders of beneficial interests in this Global Security will not be
entitled to receive physical delivery of Definitive Securities except as
described in the Indenture and will not be considered the Holders thereof for
any purpose under the Indenture.]
[If a Definitive Security, insert -- As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is
registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company in [if
applicable, insert -- any place where the principal of and any premium and
interest on this Security are payable] [if applicable, insert -- The City of New
York[, or, subject to any laws or regulations applicable thereto and to the
right of the Company (limited as provided in the Indenture) to rescind the
designation of any such transfer agent, at the [main] offices of
in and in or at
such other offices or agencies as the Company may designate]], duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized
<PAGE> 34
26
in writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.]
The Securities of this series are issuable only in registered form without
coupons in denominations of U.S. $ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of or
contained in the Indenture or of or contained in any Security, or for any claim
based thereon or otherwise in respect thereof, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor Person, either directly or through
the Company or any successor Person, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment, penalty or
otherwise; it being expressly understood that all such liability is hereby
expressly waived and released by the acceptance hereof and as a condition of,
and as part of the consideration for, the Securities and the execution of the
Indenture.
The Indenture provides that the Company (a) will be discharged from any and
all obligations in respect of the Securities (except for certain obligations
described in the Indenture), or (b) need not comply with certain restrictive
covenants of the Indenture, in each case if the Company deposits, in trust, with
the Trustee money or U.S. Government Obligations (or a combination thereof)
which through the payment of interest thereon and principal thereof in
accordance with their terms will provide money, in an amount sufficient to
<PAGE> 35
27
pay all the principal of and interest on the Securities, but such money need not
be segregated from other funds except to the extent required by law.
This Security shall be governed by and construed in accordance with the laws
of the State of New York.
All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
[If a Definitive Security, insert as a separate page --
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
------------------------------------------------------------
(Please Print or Typewrite Name and Address of Assignee)
the within instrument of TENNESSEE GAS PIPELINE COMPANY and does hereby
irrevocably constitute and appoint
- -------------------------------Attorney to transfer said instrument on the books
of the within-named Company, with full power of substitution in the premises.
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE:
Dated: -------------------------------------
Signature
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.]
SECTION 204. Global Securities.
Every Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIM-
<PAGE> 36
28
ITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED
AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU
OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT
IN SUCH LIMITED CIRCUMSTANCES.
If Securities of a series are issuable in whole or in part in the form of one
or more Global Securities, as specified in or as contemplated by Section 301,
then, notwithstanding Clause (9) of Section 301 and the provisions of Section
302, any Global Security shall represent such of the Outstanding Securities of
such series as shall be specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced or increased, as the case
may be, to reflect exchanges. Any endorsement of a Global Security to reflect
the amount, or any reduction or increase in the amount, of Outstanding
Securities represented thereby shall be made in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in
a Company Order. Subject to the provisions of Sections 303, 304 and 305, the
Trustee shall deliver and redeliver any Global Security in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. Any instructions by the Company with respect to
endorsement or delivery or redelivery of a Global Security shall be in a Company
Order (which need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel).
The provisions of the last sentence of Section 303 shall apply to any Security
represented by a Global Security if such Security was never issued and sold by
the Company and the Company delivers to the Trustee the Global Security together
with a Company Order (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) with regard to the reduction or increase,
as the case may be, in the principal amount of Securities represented thereby,
together with the written statement contemplated by the last sentence of Section
303.
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
<PAGE> 37
29
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
AS TRUSTEE
By:
----------------------------------
Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established
in or pursuant to a Board Resolution and, subject to Section 303, set forth, or
determined in the manner provided, in an Officer's Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906 or 1107 and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall be
payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the series
is payable or the method of determination thereof;
(5) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method of determination thereof, the date or dates
<PAGE> 38
30
from which such interest shall accrue, or the method of determination thereof,
the Interest Payment Dates on which any such interest shall be payable and the
Regular Record Date for any interest payable on any Interest Payment Date;
(6) the place or places where, subject to the provisions of Section 1002,
the principal of and any premium and interest on Securities of the series
shall be payable, Securities of the series may be surrendered for registration
of transfer, Securities of the series may be surrendered for exchange and
notices, and demands to or upon the Company in respect of the Securities of
the series and this Indenture may be served;
(7) the period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series may be redeemed, in
whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase Securities
of the series pursuant to any sinking fund or analogous provisions or upon the
happening of a specified event or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which Securities of the series shall be issuable;
(10) the currency, currencies or currency units in which payment of the
principal of and any premium and interest on any Securities of the series
shall be payable if other than the currency of the United States of America
and the manner of determining the equivalent thereof in the currency of the
United States of America for purposes of the definition of "Outstanding" in
Section 101;
(11) if the amount of payments of principal of or any premium or interest on
any Securities of the series may be determined with reference to an index, the
manner in which such amounts shall be determined;
(12) if the principal of or any premium or interest on any Securities of the
series is to be payable, at the election of the Company or a Holder thereof,
in one or more currencies or currency units other than that or those in which
the Securities are stated to be payable, the currency, currencies or currency
units in which payment of the principal of and any premium and interest on
Securities of such series as to which such election is made shall be payable,
and the periods within which and the terms and conditions upon which such
election is to be made;
(13) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
<PAGE> 39
31
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the method of determination thereof;
(14) if and as applicable, that the Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities and,
in such case, the Depositary or Depositaries for such Global Security or
Global Securities and any circumstances other than those set forth in Section
305 in which any such Global Security may be transferred to, and registered
and exchanged for Securities registered in the name of, a Person other than
the Depositary for such Global Security or a nominee thereof and in which any
such transfer may be registered;
(15) any deletions from, modifications of or additions to the Events of
Default set forth in Section 501 or the covenants of the Company set forth in
Article Ten pertaining to the Securities of the series;
(16) if other than as provided in Sections 1302 and 1303, the means of
defeasance or covenant defeasance as may be specified for the Securities of
the series;
(17) if other than the Trustee, the identity of the Security Registrar and
any Paying Agent; and
(18) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by Section 901(4)).
All Securities of any one series shall be substantially identical except as to
denomination and except as may otherwise be provided in or pursuant to the Board
Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officer's Certificate referred to
above or in any such indenture supplemental hereto.
All Securities of any one series need not be issued at the same time and,
unless otherwise provided, a series may be reopened, without the consent of the
Holders, for increases in the aggregate principal amount of such series of
Securities and issuances of additional Securities of such series or for the
establishment of additional terms with respect to the Securities of such series.
If any of the terms of the series are established by action taken by or
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by an authorized officer or other authorized person on behalf
of the Company and delivered to the Trustee at or prior to the delivery of the
Officer's Certificate setting forth, or providing the manner for determining,
the terms of the series.
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With respect to Securities of a series subject to a Periodic Offering, such
Board Resolution or Officer's Certificate may provide general terms for
Securities of such series and provide either that the specific terms of
particular Securities of such series shall be specified in a Company Order or
that such terms shall be determined by the Company, or one or more of the
Company's agents designated in an Officer's Certificate, in accordance with a
Company Order.
SECTION 302. Denominations.
The Securities of each series shall be issuable only in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such specified denomination with respect to
the Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of
the Board, its Chief Executive Officer, its Chief Financial Officer, its
President or any Vice President and need not be attested. The signature of any
of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities; provided,
however, that in the case of Securities offered in a Periodic Offering, the
Trustee shall authenticate and deliver such Securities from time to time in
accordance with such other procedures (including, without limitation, the
receipt by the Trustee of oral or electronic instructions from the Company or
its duly authorized agents, thereafter promptly confirmed in writing) acceptable
to the Trustee as may be specified by or pursuant to a Company Order delivered
to the Trustee prior to the time of the first authentication of Securities of
such series. If the form or terms of the
<PAGE> 41
33
Securities of the series have been established in or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(1) if the form or forms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 201, that such form or
forms have been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been, or in the case of Securities
of a series offered in a Periodic Offering, will be, established by or
pursuant to a Board Resolution as permitted by Section 301, that such terms
have been, or in the case of Securities of a series offered in a Periodic
Offering, will be, established in conformity with the provisions of this
Indenture, subject, in the case of Securities of a series offered in a
Periodic Offering, to any conditions specified in such Opinion of Counsel; and
(3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
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.
If such form or forms or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding paragraph,
if all Securities of a series are not to be originally issued at one time, it
shall not be necessary to deliver the Officer's Certificate otherwise required
pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the time of
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
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With respect to Securities of a series offered in a Periodic Offering, the
Trustee may rely, as to the authorization by the Company of any of such
Securities, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and the
other documents delivered pursuant to Sections 201 and 301 and this Section, as
applicable, in connection with the first authentication of Securities of such
series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309 for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of Definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the Definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
Definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of Definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for Definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company maintained pursuant to Section 1002 for the
purpose of exchanges of Securities of such series, without charge to the Holder.
Upon
<PAGE> 43
35
surrender for cancellation of any one or more temporary Securities of any series
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more Definitive Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor.
Until so exchanged the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as Definitive Securities
of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at an office or agency of the Company in
The City of New York a register (the register maintained in such office or in
any other office or agency of the Company in a Place of Payment being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Company will,
prior to the issuance of any Securities hereunder, appoint the Trustee as the
initial "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided and its corporate trust office which,
at the date hereof, is located at 450 West 33rd Street, New York, New York 10001
as the initial office or agency in The City of New York where the Security
Register will be maintained. The Company may at any time replace such Security
Registrar, change such office or agency or act as its own Security Registrar.
The Company will give prompt written notice to the Trustee of any change of the
Security Registrar or of the location of such office or agency.
Upon surrender for registration of transfer of any Security of any series at
the office or agency of the Company maintained pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and tenor.
At the option of the Holder, Securities of any series (except a Global
Security) may be exchanged for other Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
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All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (1) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (2) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Notwithstanding any other provision in this Indenture and except as otherwise
specified as contemplated by Section 301, no Global Security may be transferred
to, or registered or exchanged for Securities registered in the name of, any
Person other than the Depositary for such Global Security or any nominee
thereof, and no such transfer may be registered, except as provided in this
paragraph. Every Security authenticated and delivered upon registration or
transfer of, or in exchange for or in lieu of, a Global Security shall be a
Global Security, except as provided in this paragraph. If (1) (A) the Depositary
for a Global Security notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or ceases to be a clearing
agency registered under the Exchange Act, and (B) a successor Depositary is not
appointed by the Company within 90 days, or (2) the Company determines in its
sole discretion that Securities of a series issued in global form shall no
longer be represented by a Global Security, then such Global Security may be
exchanged by such Depositary for Definitive Securities of the same series, of
any authorized denomination and of a like aggregate principal amount and
<PAGE> 45
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tenor, registered in the names of, and the transfer of such Global Security or
portion thereof may be registered to, such Persons as such Depositary shall
direct.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, together with, in
proper cases, such security or indemnity as may be required by the Company or
the Trustee to save each of them and any agent of either of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in exchange
for any mutilated Security or in lieu of any destroyed, lost or stolen Security
shall constitute an original additional contractual obligation of the Company,
whether or not the mutilated, destroyed, lost or stolen Security shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed
in the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security of such
series and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Securities of such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so
<PAGE> 47
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mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the Securities
of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, prior to due presentment of a Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Security is registered as
the owner of such Security for the purpose of receiving payment of principal of
and any premium and (subject to Sections 305 and 307) any interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
No holder of any beneficial interest in any Global Security held on its behalf
by a Depositary shall have any rights under this Indenture with respect to such
Global Security, and such Depositary may be treated by the Company, the Trustee,
and any agent of the Company or the Trustee as the owner of such Global Security
for all purposes whatsoever. None of the Company, the Trustee nor any agent of
the Company or the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
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SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of transfer
or exchange or for credit against any sinking fund payment shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of in accordance with its customary procedures, and
the Trustee shall thereafter deliver to the Company a certificate with respect
to such disposition.
SECTION 310. Computation of Interest.
Except as otherwise specified in or as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 311. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (in addition to
the other identification numbers printed on the Securities), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such "CUSIP" numbers either as
printed on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such "CUSIP" numbers.
<PAGE> 49
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect with
respect to Securities of any series (except as to any surviving rights of
registration of transfer or exchange of such Securities herein expressly
provided for), and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to such Securities, when
(1) either
(A) all such Securities theretofore authenticated and delivered (other
than (i) such Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306, and (ii) such
Securities for whose payment money or U.S. Government Obligations has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust,
as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount of money in the currency or currency units in which such
Securities are payable or, if such Securities are payable in United States
Dollars, U.S. Government Obligations sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal and any premium and interest to the
date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to such Securities; and
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(3) the Company has delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture with respect
to such Securities have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with respect
to Securities of any series, (x) the obligations of the Company to the Trustee
under Section 607, the obligations of the Trustee to any Authenticating Agent
under Section 614 and the right of the Trustee to resign under Section 610 shall
survive, and (y) if money or U.S. Government Obligations shall have been
deposited with the Trustee pursuant to subclause (B) of clause (1) of this
Section, the obligations of the Company and/or the Trustee under Sections 402,
606, 701 and 1002 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money and
U.S. Government Obligations deposited with the Trustee pursuant to Section 401
shall be held in trust and applied by it, in accordance with the provisions of
the Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money or U.S. Government Obligations
has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that series
when it becomes due and payable, and continuance of such default for a period
of 30 days; or
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(2) default in the payment of the principal of (or premium, if any, on) any
Security of that series at its Maturity; or
(3) default in the performance, or breach, of any term, covenant or warranty
of the Company in this Indenture (other than a term, covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this Indenture
solely for the benefit of series of Securities other than that series), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of all series outstanding (or, if any
such term, covenant or warranty is not applicable to all series of Securities,
by the Holders of at least 25% in principal amount of the Outstanding
Securities of all series to which it is applicable) (in each case treated as a
single class) a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(4) the Company pursuant to or within the meaning of any Bankruptcy Law (A)
commences a voluntary case, (B) consents to the entry of any order for relief
against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, or (D) makes
a general assignment for the benefit of its creditors; or
(5) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all
of its property, or (C) orders the liquidation of the Company; and the order
or decree remains unstayed and in effect for 90 days; or
(6) any other Event of Default provided as contemplated by Section 301 with
respect to Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default of the type described in clauses (1), (2), (3) or (6)
of Section 501 occurs and is continuing, then, and in each and every such case,
except for any series of Securities the principal of which shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities of all affected series then
Outstanding hereunder (voting as a single class) by notice in writing to the
Company (and to the Trustee if given by Holders), may declare the entire
principal (or, if the Securities of any such affected series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
<PAGE> 52
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in the terms of such series) of all Securities of all such affected series, and
the interest accrued thereon, if any, to be due and payable immediately, and
upon any such declaration the same shall become immediately due and payable.
If an Event of Default of the type described in clause (4) or (5) of Section
501 occurs and is continuing, then and in each and every such case, except for
any series of Securities the principal of which shall have already become due
and payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of all the Securities then Outstanding hereunder (voting as a
single class), by notice in writing to the Company (and to the Trustee if given
by Holders), may declare the entire principal (or, if Securities of any series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of such series) of all the Securities then
Outstanding, and interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.
At any time after such a declaration of acceleration with respect to
Securities of all affected series has been made and before a judgment or decree
for payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of all such affected series (voting as a single class) by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue interest on all such affected Securities,
(B) the principal of (and premium, if any, on) any such affected
Securities which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate or rates prescribed therefor in such
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel;
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and
(2) all Events of Default with respect to such affected Securities, other
than the non-payment of the principal of Securities of that series which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when such
interest becomes due and payable and such default continues for a period of 30
days, or
(2) default is made in the payment of the principal of (or premium, if any,
on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities of such series by such
<PAGE> 54
46
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company or any other
obligor upon the Securities, their property or their creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the
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Holders of the Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal or any premium or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607;
SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and any premium and interest, respectively; and
THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of all affected series (treated as a single class) shall have made
written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
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48
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Sections 305 and
307) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series; provided, however, that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture;
(2) the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction; and
(3) subject to the provisions of Section 601, the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith
shall determine that the proceeding so directed would involve the Trustee in
personal liability.
SECTION 513. Waiver of Past Defaults.
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of all series with respect to which an Event of Default shall have
occurred and be continuing (voting as a single class) may on behalf of the
Holders of all such Securities waive any past default hereunder with respect to
such Securities and its consequences, except
(1) a continuing default in the payment of the principal of or any premium
or interest on any such Security, or
(2) a default in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
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purpose of this Indenture, but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken, suffered or omitted by
it as Trustee, a court may require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess costs against any such
party litigant, in the manner and to the extent provided in the Trust Indenture
Act; provided, however, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any usury, stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.
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SECTION 602. Notice of Defaults.
If a Default occurs and is continuing with respect to the Securities of any
series, the Trustee shall, within 90 days after it occurs, transmit, in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
notice of all uncured or unwaived Defaults known to it; provided, however, that,
except in the case of a Default in payment on the Securities of any series, the
Trustee may withhold the notice if and so long as the board of directors, the
executive committee or a trust committee of its directors and/or its duly
authorized officers in good faith determines that withholding such notice is in
the interests of Holders of Securities of such series; provided further,
however, that, in the case of any default or breach of the character specified
in Section 501(3) with respect to the Securities of such series, no such notice
to Holders shall be given until at least 60 days after the occurrence thereof.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely on and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document reasonably believed
by it to be genuine and to have been signed or presented by the proper party
or parties;
(2) any request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order (other
than delivery of any Security to the Trustee for authentication and delivery
pursuant to Section 303, which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors shall be sufficiently
evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely
upon an Officer's Certificate;
(4) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
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52
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such request
or direction;
(6) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document but the
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(7) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder; and
(8) the Trustee may request that the Company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officer's Certificate may be signed by any person authorized to sign an
Officer's Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness Neither the Trustee nor any Authenticating Agent makes any
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee or any Authenticating Agent shall not be accountable for
the use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
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SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and
(3) to indemnify the Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except those
attributable to its negligence or bad faith.
The obligations of the Company under this Section to compensate the Trustee
and to pay or reimburse the Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Securities upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the Holders of particular Securities.
Without limiting any rights available to the Trustee under applicable law,
when the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 501(4) or Section 501(5), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for such services are intended to constitute expenses of
administration under any applicable Bankruptcy Law.
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The provisions of this Section shall survive the satisfaction and discharge of
this Indenture and the defeasance of the Securities.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the meaning
of the Trust Indenture Act, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be one or more Trustees hereunder with respect to the
Securities of each series, at least one of which shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus required by the Trust Indenture Act. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of a supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
The Trustee may be removed at any time with respect to the Securities of any
series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of all series for which such Trustee is acting as
Trustee, delivered to the Trustee and to the Company.
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If at any time:
(1) the Trustee shall fail to comply with Section 608 after written request
therefor by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall fail
to resign after written request therefor by the Company or by any such Holder,
or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (A) the Company may remove the Trustee with respect to
all Securities, or (B) subject to Section 514, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee with respect to all Securities and the appointment of
a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or if a
vacancy shall occur in the office of Trustee for any cause, with respect to the
Securities of one or more series, the Company shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 611. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by
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Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or
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change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees as co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
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SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or any
other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee (upon notice to the Company) may appoint an Authenticating Agent
or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon original issue (in accordance with procedures acceptable to
the Trustee) and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any corporation succeeding to all or substantially all
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of the corporate agency or corporate trust business of such Authenticating
Agent, shall continue to be an Authenticating Agent, provided such corporation
shall be otherwise eligible under this Section, without the execution or filing
of any paper or any further act on the part of the Trustee or such
Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
Except with respect to an Authenticating Agent appointed at the request of the
Company, the Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed by the Company for such payments,
subject to the provisions of Section 607.
If an appointment with respect to one or more series is made pursuant to this
Section, the Securities of such series may have endorsed thereon, in addition to
the Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:
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This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
AS TRUSTEE
By:
----------------------------------
As Authenticating Agent
By:
----------------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(1) semi-annually, not later than May 15 and November 15 in each year, a
list for each series of Securities, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Securities of such
series as of the preceding April 30 or October 31, as the case may be, and
(2) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such
list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar for Securities of a series, no such list need be furnished with
respect to such series of Securities.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
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The rights of the Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to the names and addresses of Holders made pursuant to the Trust
Indenture Act.
SECTION 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee and
its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
Reports so required to be transmitted at stated intervals of not more than 12
months shall be transmitted no later than July 15 in each calendar year with
respect to the 12-month period ending on the previous May 15, commencing May 15,
1997.
A copy of each such report shall, at the time of such transmission to Holders,
be filed by the Trustee with each stock exchange upon which any Securities are
listed, with the Commission and with the Company. The Company will notify the
Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the
Company is not required to file information, documents or reports pursuant to
either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered
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on a national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations; and
(3) transmit by mail to all Holders, as their names and addresses appear in
the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to
be filed by the Company pursuant to paragraphs (1) and (2) of this Section as
may be required by rules and regulations prescribed from time to time by the
Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or sell,
lease or transfer its properties and assets as, or substantially as, an entirety
to, any Person, unless:
(1) (A) in the case of a merger, the Company is the surviving entity, or (B)
the Person formed by such consolidation or into which the Company is merged or
the Person which acquires by sale or transfer, or which leases, the properties
and assets of the Company as, or substantially as, an entirety shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and punctual
payment of the principal of and any premium and interest on all the Securities
and the performance or observance of every covenant and condition of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Default or Event
of Default exists; and
(3) where the Company is not the surviving entity, the Company has delivered
to the Trustee an Officer's Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, sale, transfer or lease and the
supplemental indenture required in connection with such transaction comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
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SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into, any
other Person or any sale, transfer or lease of the properties and assets of the
Company as, or substantially as, an entirety in accordance with Section 801, the
successor Person formed by such consolidation or into which the Company is
merged or to which such sale, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
originally as the Company herein, and thereafter, except in the case of a lease,
the predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to secure the Securities pursuant to the requirements of Section 1006 or
otherwise; or
(2) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and in
the Securities; or
(3) to add to the covenants of the Company or the Events of Default for the
benefit of the Holders of all or any series of Securities (and if such
covenants or Events of Default are to be for the benefit of less than all
series of Securities, stating that such covenants or Events of Default, as the
case may be, are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the Company;
or
(4) to add to, change or eliminate any of the provisions of this Indenture
in respect of one or more series of Securities; provided, however, that any
such addition, change or elimination shall become effective only when there is
no Security Outstanding of any series created prior to the execution of such
supplemental indenture which is entitled to the benefit of such provision; or
(5) to establish the form or terms of Securities of any series as permitted
by Sections 201 and 301; or
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(6) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, to comply with any
applicable mandatory provisions of law or to make any other provisions with
respect to matters or questions arising under this Indenture, provided that
such action pursuant to this clause (6) shall not adversely affect the
interests of the Holders of Securities of any series in any material respect;
or
(7) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by
more than one Trustee, pursuant to the requirements of Section 611; or
(8) to modify, eliminate or add to the provisions of this Indenture to such
extent as shall be necessary to effect the qualification of this Indenture
under the Trust Indenture Act or under any similar federal statute
subsequently enacted, and to add to this Indenture such other provisions as
may be expressly required under the Trust Indenture Act.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series affected by such supplemental indenture
(voting as one class), by Act of said Holders delivered to the Company and the
Trustee, the Company and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest, if any, on, any Security, or reduce the principal
amount thereof or premium, if any, on or the rate of interest thereon, or
(2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
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(3) change any obligation of the Company, with respect to Outstanding
Securities of a series, to maintain an office or agency in the places and for
the purposes specified in Section 1002 for such series, or
(4) modify any of the provisions of this Section, Section 513 or Section
1008, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Sections 611 and 901(7).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
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SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities
that it will duly and punctually pay the principal of and any premium and
interest on the Securities of that series in accordance with the terms of the
Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
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The Company may also from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
Except as otherwise specified with respect to a series of Securities as
contemplated by Section 301, the Company hereby initially designates as the
Place of Payment for each series of Securities The City and State of New York,
and initially appoints the Trustee at its Corporate Trust Office as the
Company's office or agency for each such purpose in such city.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to
any series of Securities, it will, on or before each due date of the principal
of or any premium or interest on any of the Securities of that series, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (1) hold all sums held by it for the
payment of the principal of (and premium, if any) or interest, if any, on
Securities of that series in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided; (2) give the Trustee notice of any default by the Company
(or any
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other obligor upon the Securities of that series) in the making of any payment
of principal (and premium, if any) or interest, if any, on the Securities of
that series; and (3) during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in
trust by such Paying Agent for payment in respect of the Securities of that
series.
The Company may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of or any premium or interest
on any Security of any series and remaining unclaimed for two years after such
principal, premium or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper in each Place of Payment with
respect to such series, notice that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 150 days after the end of each
fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signer thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the
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Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
(charter and statutory) and franchises; provided, however, that the Company
shall not be required to preserve any such right or franchise if it shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company.
SECTION 1006. Limitations on Liens.
The Company will not, nor will it permit any Restricted Subsidiary to, create,
assume, incur or suffer to exist any Lien upon any Principal Property, whether
owned or leased on the date of this Indenture or thereafter acquired, to secure
any Debt of the Company or any other Person (other than the Securities issued
hereunder), without in any such case making effective provision whereby all of
the Securities Outstanding hereunder shall be secured equally and ratably with,
or prior to, such Debt so long as such Debt shall be so secured. This
restriction shall not apply to:
(i) any Lien upon any property or assets of the Company or any Restricted
Subsidiary in existence on the date of this Indenture or created pursuant to
an "after-acquired property" clause or similar term in existence on the date
of this Indenture or any mortgage, pledge agreement, security agreement or
other similar instrument in existence on the date of this Indenture;
(ii) any Lien upon any property or assets created at the time of acquisition
of such property or assets by the Company or any Restricted Subsidiary or
within one year after such time to secure all or a portion of the purchase
price for such property or assets or Debt incurred to finance such purchase
price, whether such Debt was incurred prior to, at the time of or within one
year of such acquisition;
(iii) any Lien upon any property or assets existing thereon at the time of
the acquisition thereof by the Company or any Restricted Subsidiary (whether
or not the obligations secured thereby are assumed by the Company or any
Restricted Subsidiary);
(iv) any Lien upon any property or assets of a Person existing thereon at
the time such Person becomes a Restricted Subsidiary by acquisition, merger or
otherwise;
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(v) the assumption by the Company or any Restricted Subsidiary of
obligations secured by any Lien existing at the time of the acquisition by the
Company or any Restricted Subsidiary of the property or assets subject to such
Lien or at the time of the acquisition of the Person which owns such property
or assets;
(vi) any Lien on property to secure all or part of the cost of construction
or improvements thereon or to secure Debt incurred prior to, at the time of,
or within one year after completion of such construction or making of such
improvements, to provide funds for any such purpose;
(vii) any Lien on any oil, gas, mineral and processing and other plant
properties to secure the payment of costs, expenses or liabilities incurred
under any lease or grant or operating or other similar agreement in connection
with or incident to the exploration, development, maintenance or operation of
such properties;
(viii) any Lien arising from or in connection with a conveyance by the
Company or any Restricted Subsidiary of any production payment with respect to
oil, gas, natural gas, carbon dioxide, sulphur, helium, coal, metals,
minerals, steam, timber or other natural resources;
(ix) any Lien in favor of the Company or any Restricted Subsidiary;
(x) any Lien created or assumed by the Company or any Restricted Subsidiary
in connection with the issuance of Debt the interest on which is excludable
from gross income of the holder of such Debt pursuant to the Internal Revenue
Code of 1986, as amended, or any successor statute, for the purpose of
financing, in whole or in part, the acquisition or construction of property or
assets to be used by the Company or any Subsidiary;
(xi) any Lien upon property or assets of any foreign Restricted Subsidiary
to secure Debt of that foreign Restricted Subsidiary;
(xii) Permitted Liens;
(xiii) any Lien created by any Alternate Program or any document executed by
any Subsidiary in connection therewith provided that such Lien is limited to
the trade or other receivables in respect of which such Alternate Program is
created or exists, and the proceeds thereof;
(xiv) any Lien on Margin Stock;
(xv) any Lien upon any additions, improvements, replacements, repairs,
fixtures, appurtenances or component parts thereof attaching to or required to
be attached to property or assets pursuant to the terms of any mortgage,
pledge agreement, security agreement or other similar instrument, creating a
Lien upon such property or assets permitted by clauses (i) through (xiv),
inclusive, of this Section; or
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(xvi) any extension, renewal, refinancing, refunding or replacement (or
successive extensions, renewals, refinancing, refundings or replacements) of
any Lien, in whole or in part, that is referred to in clauses (i) through
(xv), inclusive, of this Section, or of any Debt secured thereby; provided,
however, that the principal amount of Debt secured thereby shall not exceed
the greater of the principal amount of Debt so secured at the time of such
extension, renewal, refinancing, refunding or replacement and the original
principal amount of Debt so secured (plus in each case the aggregate amount of
premiums, other payments, costs and expenses required to be paid or incurred
in connection with such extension, renewal, refinancing, refunding or
replacement); provided, further, however, that such extension, renewal,
refinancing, refunding or replacement shall be limited to all or a part of the
property (including improvements, alterations and repairs on such property)
subject to the encumbrance so extended, renewed, refinanced, refunded or
replaced (plus improvements, alterations and repairs on such property).
Notwithstanding the foregoing provisions of this Section, the Company may, and
may permit any Restricted Subsidiary to, create, assume, incur or suffer to
exist any Lien upon any Principal Property to secure any Debt of the Company or
any other Person (other than the Securities) that is not excepted by clauses (i)
through (xvi), inclusive, of this Section without securing the Securities issued
hereunder, provided that the aggregate principal amount of all Debt then
outstanding secured by such Lien and all similar Liens, together with all net
sale proceeds from Sale-Leaseback Transactions (excluding Sale-Leaseback
Transactions permitted by clauses (i) through (iv), inclusive, of Section 1007),
does not exceed 15% of Consolidated Net Tangible Assets.
SECTION 1007. Restriction of Sale-Leaseback Transaction.
The Company will not, nor will it permit any Restricted Subsidiary to, engage
in a Sale-Leaseback Transaction unless:
(i) such Sale-Leaseback Transaction occurs within one year from the date of
acquisition of the Principal Property subject thereto or the date of the
completion of construction or commencement of full operations on such
Principal Property, whichever is later;
(ii) the Sale-Leaseback Transaction involves a lease for a period, including
renewals, of not more than three years;
(iii) the Company or such Restricted Subsidiary would be entitled to incur
Debt secured by a Lien on the Principal Property subject thereto in a
principal amount equal to or exceeding the net sale proceeds from such Sale-
Leaseback Transaction without securing the Securities; or
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(iv) the Company or such Restricted Subsidiary, within a one-year period
after such Sale-Leaseback Transaction, applies or causes to be applied an
amount not less than the net sale proceeds from such Sale-Leaseback
Transaction to (A) the repayment, redemption or retirement of Funded Debt of
the Company or any Subsidiary, or (B) investment in another Principal
Property.
Notwithstanding the foregoing provisions of this Section, the Company may, and
may permit any Restricted Subsidiary to, effect any Sale-Leaseback Transaction
that is not excepted by clauses (i) through (iv), inclusive, of this Section,
provided that the net sale proceeds from such Sale-Leaseback Transaction,
together with the aggregate principal amount of then outstanding Debt (other
than the Securities) secured by Liens upon Principal Properties not excepted by
clauses (i) through (xvi), inclusive, of Section 1006, do not exceed 15% of the
Consolidated Net Tangible Assets.
SECTION 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 1005, 1006 or 1007 with respect to
the Securities of any series if before the time for such compliance the Holders
of at least a majority in aggregate principal amount of the Outstanding
Securities of all affected series (voting as one class) shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
A waiver which changes or eliminates any term, provision or condition of this
Indenture which has expressly been included solely for the benefit of one or
more particular series of Securities, or which modifies the rights of the
Holders of Securities of such series with respect to such term, provision or
condition, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a
Board Resolution. In case of any redemption at the election of the Company of
less than all the Securities of any series, the Company shall, at least 45 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities (1) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, or (2) pursuant to an election of the Company which is subject to a
condition specified in the terms of such Securities, the Company shall furnish
the Trustee with an Officer's Certificate evidencing compliance with such
restriction or condition.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless all
the Securities of such series and of a specified tenor are to be redeemed), the
particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
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For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part, to the portion of the
principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail (if international
mail, by air mail), postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series and of a
specified tenor are to be redeemed, the identification (and, in the case of
partial redemption of any Securities, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered for
payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
<PAGE> 83
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SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
<PAGE> 84
76
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the
retirement of Securities of a series except as otherwise specified in or as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than any
previously called for redemption), and (2) may apply as a credit Securities of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series; provided that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any series
of Securities (unless a shorter period shall be satisfactory to the Trustee),
the Company will deliver to the Trustee an Officer's Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, which is to be satisfied by
<PAGE> 85
77
payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 1202 and
stating the basis for such credit and that such Securities have not been
previously so credited, and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE
SECTION 1301. Applicability of Article.
The provisions of this Article shall be applicable to each series of
Securities except as otherwise specified as contemplated by Section 301 for
Securities of such series.
SECTION 1302. Legal Defeasance.
In addition to discharge of the Indenture pursuant to Section 401, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
Securities of such a series on the 91st day after the date of the deposit
referred to in clause (1) below, and the provisions of this Indenture with
respect to the Securities of such series shall no longer be in effect (except as
to (i) rights of registration of transfer and exchange of Securities of such
series and the Company's right of optional redemption, if any, (ii) substitution
of mutilated, destroyed, lost or stolen Securities, (iii) rights of Holders of
Securities to receive payments of principal thereof and interest thereon, upon
the Stated Maturities therefor or on the Redemption Dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) the rights, obligations, duties and immunities of
the Trustee hereunder, (v) the rights of the Holders of Securities of such
series as beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them, and (vi) the obligations of the
Company under Section 1002), and the Trustee, at the expense of the Company,
shall, upon a Company Request, execute proper instruments ac-
<PAGE> 86
78
knowledging the same, if the conditions set forth below are satisfied
(hereinafter, "defeasance"):
(1) The Company has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust, for the purposes of making the following
payments, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of such series (i) cash in an amount,
or (ii) in the case of any series of Securities the payments on which may only
be made in legal coin or currency of the United States, U.S. Government
Obligations, maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash, or (iii) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (A) the principal and interest and premium,
if any, on all Securities of such series on each date that such principal,
interest or premium, if any, is due and payable or on any Redemption Date
established pursuant to clause (3) below, and (B) any mandatory sinking fund
payments on the dates on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such series;
(2) The Company has delivered to the Trustee an Opinion of Counsel based on
the fact that (x) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling, or (y) since the date hereof, there
has been a change in the applicable federal income tax law, in either case to
the effect that, and such opinion shall confirm that, the holders of the
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance and will be
subject to federal income tax on the same amount and in the same manner and at
the same times, as would have been the case if such deposit and defeasance had
not occurred;
(3) If the Securities are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of
such redemption shall have been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee shall have been made;
(4) No Default or Event of Default shall have occurred and be continuing on
the date of such deposit; and
(5) The Company has delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for
relating to the defeasance contemplated by this provision have been complied
with.
For this purpose, such defeasance means that the Company and any other obligor
upon the Securities of such series shall be deemed to have paid and
<PAGE> 87
79
discharged the entire debt represented by the Securities of such series, which
shall thereafter be deemed to be "Outstanding" only for the purposes of Section
1304 and the rights and obligations referred to in clauses (i) through (vi),
inclusive, of the first paragraph of this Section, and to have satisfied all its
other obligations under the Securities of such series and this Indenture insofar
as the Securities of such series are concerned.
SECTION 1303. Covenant Defeasance.
The Company and any other obligor, if any, shall be released on the 91st day
after the date of the deposit referred to in clause (1) below from its
obligations under Sections 704, 801, 1005, 1006 and 1007 with respect to the
Securities of any series on and after the date the conditions set forth below
are satisfied (hereinafter, "covenant defeasance"), and the Securities of such
series shall thereafter be deemed to be not "Outstanding" for the purposes of
any request, demand, authorization, direction, notice, waiver, consent or
declaration or other action or Act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
Outstanding for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Securities of such series, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such Section, whether directly or
indirectly by reason of any reference elsewhere herein to such Section or by
reason of any reference in such Section to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 501, but, except as specified above, the
remainder of this Indenture and the Securities of such series shall be
unaffected thereby. The following shall be the conditions to application of this
Section 1303:
(1) The Company has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of such series, (i) cash in an
amount, or (ii) in the case of any series of Securities the payments on which
may only be made in legal coin or currency of the United States, U.S.
Government Obligations, maturing as to principal and interest at such times
and in such amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal and interest and
premium, if any, on all Securities of such series on each date that such
principal,
<PAGE> 88
80
interest or premium, if any, is due and payable or on any Redemption Date
established pursuant to clause (2) below, and (B) any mandatory sinking fund
payments on the day on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such series;
(2) If the Securities are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of
such redemption shall have been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee shall have been made;
(3) No Default or Event of Default shall have occurred and be continuing on
the date of such deposit;
(4) The Company shall have delivered to the Trustee an Opinion of Counsel
which shall confirm that the holders of the Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and covenant defeasance and will be subject to federal income tax
on the same amount and in the same manner and at the same times, as would have
been the case if such deposit and covenant defeasance had not occurred; and
(5) The Company shall have delivered to the Trustee an Officer's Certificate
stating that all conditions precedent provided for relating to the covenant
defeasance contemplated by this provision have been complied with.
SECTION 1304. Application by Trustee of Funds Deposited for Payment of
Securities.
Subject to the provisions of the last paragraph of Section 1003, all moneys or
U.S. Government Obligations deposited with the Trustee pursuant to Section 1302
or 1303 (and all funds earned on such moneys or U.S. Government Obligations)
shall be held in trust and applied by it to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent),
to the Holders of the particular Securities of such series for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.
Subject to Sections 1302 and 1303, the Trustee promptly shall pay to the Company
upon request any excess moneys held by them at any time.
<PAGE> 89
81
SECTION 1305. Repayment to Company.
The Trustee and any Paying Agent promptly shall pay or return to the Company
upon Company Request any money and U.S. Government Obligations held by them at
any time that are not required for the payment of the principal of and any
interest on the Securities of any series for which money or U.S. Government
Obligations have been deposited pursuant to Section 1302 or 1303.
The provisions of the last paragraph of Section 1003 shall apply to any money
held by the Trustee or any Paying Agent under this Article that remains
unclaimed for two years after the Maturity of any series of Securities for which
money or U.S. Government Obligations have been deposited pursuant to Section
1302 or 1303.
This instrument may be executed with counterpart signature pages or in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, all as of the day and year first above written.
TENNESSEE GAS PIPELINE COMPANY
By:
----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By:
----------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF FRIED, FRANK, HARRIS, SHRIVER & JACOBSON]
212-859-8000
(FAX: 212-859-4000)
February 26, 1997
Tennessee Gas Pipeline Company
1001 Louisiana
Houston, Texas 77002
Ladies and Gentlemen:
We are acting as counsel to Tennessee Gas Pipeline Company, a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the contemplated issuance by the
Company from time to time of up to U.S.$1,000,000,000 aggregate public offering
price or the equivalent thereof in one or more foreign currencies, currency
units or composite currencies of debt securities of the Company (the "Debt
Securities"), which may be issued pursuant to an indenture (the "Indenture") to
be entered into between the Company and The Chase Manhattan Bank, as trustee
(the "Trustee"). Capitalized terms used herein have the meanings set forth in
the Registration Statement, unless otherwise defined herein.
In connection with this opinion, we have (i) investigated such questions of
law, (ii) examined originals or certified, conformed or reproduction copies of
such agreements, instruments, documents and records of the Company, such
certificates of public officials and such other documents, and (iii) received
such information from officers and representatives of the Company and others as
we have deemed necessary or appropriate for the purposes of this opinion. In all
such examinations, we have assumed the genuineness of all signatures, the
authenticity of all original or certified copies and the conformity to original
or certified copies of all copies submitted to us as conformed or reproduction
copies. We also have assumed, with respect to all parties to agreements or
instruments relevant hereto other than the Company, that such parties had the
requisite power and authority (corporate or otherwise) to execute, deliver and
perform such agreements or instruments, that such agreements or instruments have
been duly authorized by all requisite action (corporate or otherwise), executed
and delivered by such parties and that such agreements or instruments are the
valid, binding and enforceable obligations of such parties. As to various
questions of fact relevant to such opinions, we have relied upon, and have
assumed the accuracy of, certificates and oral or written statements and other
information of or from public officials, officers or representatives of the
Company, and others.
Based upon the foregoing and subject to the limitations set forth herein,
we are of the opinion that:
Assuming the Indenture is duly executed and delivered by the Company and
duly authorized, executed and delivered by the Trustee, when the terms of the
Debt Securities and their issue and sale have been duly established in
conformity with the Indenture so as not to violate any applicable law or
agreement or instrument then binding on the Company, and when the Debt
Securities have been duly executed and authenticated in accordance with the
terms of the Indenture and issued and sold as contemplated in the Registration
Statement, the Debt Securities will constitute valid and binding obligations of
the Company, subject to (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other laws now or hereafter in effect affecting
creditors' rights generally, and (ii) general principles of equity (including,
without limitation, standards of materiality, good faith, fair dealing and
reasonableness), whether considered in a proceeding in equity or at law.
We express no opinion as to the legality, validity, binding effect or
enforceability of any provision of the Debt Securities or the Indenture
providing for payments thereunder in a currency other than currency of the
<PAGE> 2
United States of America to the extent that a court of competent jurisdiction
will under applicable law convert any judgment rendered in such other currency
into currency of the United States of America or to the extent that payment in a
currency other than currency of the United States of America is contrary to
applicable law.
This opinion is expressly limited to the laws of the State of New York and,
to the extent required by the foregoing opinion, the General Corporation Law of
the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this firm under the captions
"Legal Matters" in the Prospectus and "Legal Matters" in any Prospectus
Supplement forming a part of the Registration Statement. In giving these
consents, we do not hereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER &
JACOBSON
By: /s/ STUART H. GELFOND
----------------------------------
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 8, 1996
(except with respect to the matters discussed in Notes 1 and 2, as to which the
date is December 12, 1996) included in Tennessee Gas Pipeline Company's Current
Report on Form 8-K dated January 21, 1997 and to all references to our Firm
included in this registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
February 25, 1997
