Document:

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                                                                    EXHIBIT 4(g)

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                          REGISTRATION RIGHTS AGREEMENT

                           Dated as of March 27, 2000

                                       by

                       Panhandle Eastern Pipe Line Company

                                       and

               Donaldson, Lufkin & Jenrette Securities Corporation

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          This Registration Rights Agreement (this "Agreement") is made and
entered into as of March 27, 2000, by Panhandle Eastern Pipe Line Company, a
Delaware corporation ("Panhandle"), and Donaldson, Lufkin & Jenrette Securities
Corporation, (the "Initial Purchaser"), which has agreed to purchase Panhandle's
$100,000,000 8.25% Senior Notes due 2010, Series A (the "Series A Notes")
pursuant to the Purchase Agreement (as defined below).

          This Agreement is made pursuant to the Purchase Agreement, dated March
22, 2000 (the "Purchase Agreement"), by Panhandle and the Initial Purchaser. In
order to induce the Initial Purchaser to purchase the Series A Notes, Panhandle
has agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchaser set forth in Section 10(f) of the Purchase Agreement.

          The parties hereby agree as follows:

SECTION 1.   DEFINITIONS

          As used in this Agreement, the following capitalized terms shall have
the following meanings:

          Act: The Securities Act of 1933, as amended.

          Business Day: Any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the primary corporate trust office of the
Trustee, on which banks are authorized to close.

          Broker-Dealer: Any broker or dealer registered under the Exchange Act.

          Broker-Dealer Transfer Restricted Securities: Exchange Notes that are
acquired by a Broker/Dealer in the Exchange Offer in exchange for Series A Notes
that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Series A Notes
acquired directly from the Company or any of its affiliates).

          Certificated Securities: As defined in the Indenture.

          Closing Date: The date hereof.

          Commission: The Securities and Exchange Commission.

          Company: Company shall mean Panhandle.

          Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of such Registration Statement continuously effective and the
keeping of the

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Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) hereof and (c) the delivery by the Company to the
Registrar under the Indenture of the Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of the Series A Notes
tendered by Holders thereof pursuant to the Exchange Offer.

          Damages Payment Date: With respect to the Series A Notes, each
Interest Payment Date.

          Exchange Act: The Securities Exchange Act of 1934, as amended.

          Exchange Notes: The Company's 8.25% Senior Notes due 2010, Series B,
to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon
the request of any Holder of Series A Notes covered by a Shelf Registration
Statement, in exchange for such Series A Notes.

          Exchange Offer: The registration by the Company under the Act of the
Exchange Notes pursuant to the Exchange Offer Registration Statement pursuant to
which the Company shall offer the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer Restricted
Securities for Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.

          Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.

          Exempt Resales: The transactions in which the Initial Purchaser
proposes to sell the Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act.

          Global Noteholder: As defined in the Indenture.

          Holders: As defined in Section 2 hereof.

          Indemnified Holder: As defined in Section 8(a) hereof.

          Interest Payment Date: As defined in the Indenture and the Notes.

          NASD: National Association of Securities Dealers, Inc.

          Notes: The Series A Notes and the Exchange Notes.

          Person: An individual, partnership, corporation, trust, limited
liability company, unincorporated organization, or a government or agency or
political subdivision thereof.

          Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.

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          Record Holder: With respect to any Damages Payment Date, each Person
who is a Holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.

          Registration Default: As defined in Section 5 hereof.

          Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case, (i) which is filed pursuant to
the provisions of this Agreement and (ii) including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.

          Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.

          Shelf Registration Statement: As defined in Section 4 hereof.

          TIA: The Trust Indenture Act of 1939 (15 U.S. C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.

          Transfer Restricted Securities: Each Note, until the earliest to occur
of (a) the date on which such Series A Note is exchanged in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without complying
with the prospectus delivery requirements of the Act, (b) the date on which such
Series A Note has been disposed of in accordance with a Shelf Registration
Statement, (c) the date on which such Series A Note is disposed of by a Broker-
Dealer pursuant to the "Plan of Distribution" contemplated by the Exchange Offer
Registration Statement (including delivery of the Prospectus contained therein)
or (d) the date on which such Series A Note is distributed to the public
pursuant to Rule 144 under the Act.

          Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.

SECTION 2.   HOLDERS

          A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities.

SECTION 3.   REGISTERED EXCHANGE OFFER

          (a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company shall (i) cause to be filed with the Commission as
soon as practicable after the Closing Date, but in no

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event later than 90 days after the Closing Date, the Exchange Offer Registration
Statement, (ii) use its best efforts to cause such Exchange Offer Registration
Statement to become effective at the earliest possible time, but in no event
later than 180 days after the Closing Date, (iii) in connection with the
foregoing, (A) file all preeffective amendments to such Exchange Offer
Registration Statement as may be necessary in order to cause such Exchange Offer
Registration Statement to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the Exchange Notes to be
made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of such
Exchange Offer Registration Statement, commence and Consummate the Exchange
Offer. The Exchange Offer shall be on the appropriate form permitting
registration of the Exchange Notes to be offered in exchange for the Series A
Notes that are Transfer Restricted Securities and to permit sales of
Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers as
contemplated by Section 3(c) below.

          (b) The Company shall use its best efforts to cause the Exchange Offer
Registration Statement to be effective continuously, and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 20 Business
Days. The Company shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. No securities other than the Notes shall be
included in the Exchange Offer Registration Statement. The Company shall use its
best efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 30 Business Days thereafter.

          (c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Restricted Broker-Dealer who holds Series A Notes that are
Transfer Restricted Securities and that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities, may exchange such Series A Notes (other than Transfer Restricted
Securities acquired directly from the Company or any Affiliate of the Company)
pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be
an "underwriter" within the meaning of the Act and must, therefore, deliver a
prospectus meeting the requirements of the Act in connection with its initial
sale of each Exchange Note received by such Broker-Dealer in the Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers that the Commission may require in order
to permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer, except to the extent required by the Commission as a result of a
change in policy after the date of this Agreement.

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          The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers, and to ensure that such Registration
Statement conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of one year from the date on which the Exchange Offer is
Consummated.

          The Company shall promptly provide sufficient copies of the latest
version of such Prospectus to such Restricted Broker-Dealers promptly upon
request, and in no event later than one day after such request, at any time
during such one-year period in order to facilitate such sales.

SECTION 4.   SHELF REGISTRATION

          (a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement with respect to the Exchange Notes because
the Exchange Offer is not permitted by applicable law or Commission policy
(after the procedures set forth in Section 6(a)(i) below have been complied
with) or (ii) if any Holder of Transfer Restricted Securities shall notify the
Company within 20 Business Days following the Consummation of the Exchange Offer
that (A) such Holder was prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the
Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder or (C) such Holder is a Broker-Dealer and holds Series A Notes acquired
directly from the Company or one of its affiliates, then the Company shall (x)
cause to be filed on or prior to 60 days after the date on which the Company
determines that it is not required to file the Exchange Offer Registration
Statement pursuant to clause (i) above or 60 days after the date on which the
Company receives the notice specified in clause (ii) above a shelf registration
statement pursuant to Rule 415 under the Act (which may be an amendment to the
Exchange Offer Registration Statement (in either event, the "Shelf Registration
Statement")), relating to all Transfer Restricted Securities the Holders of
which shall have provided the information required pursuant to Section 4(b)
hereof, and shall (y) use its best efforts to cause such Shelf Registration
Statement to become effective on or prior to 120 days after the date on which
the Company becomes obligated to file such Shelf Registration Statement. If,
after the Company has filed an Exchange Offer Registration Statement which
satisfies the requirements of Section 3(a) above, the Company is required to
file and make effective a Shelf Registration Statement solely because the
Exchange Offer shall not be permitted under applicable federal law, then the
filing of the Exchange Offer Registration Statement shall be deemed to satisfy
the requirements of clause (x) above. Such an event shall have no effect on the
requirements of clause (y) above. The Company shall use its best efforts to keep
the Shelf Registration Statement discussed in this Section 4(a) continuously
effective, supplemented and amended as required by and subject to the provisions
of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a), and to ensure that it conforms
with the requirements of this

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Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years (as extended
pursuant to Section 6(c)(i)) following the date on which such Shelf Registration
Statement first becomes effective under the Act.

          (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information specified in item 507 of Regulation S-K under the Act for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such information.
Each Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.

SECTION 5.   LIQUIDATED DAMAGES

          If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement, (iii) the Exchange Offer has not been
Consummated within 30 Business Days after the Exchange Offer Registration
Statement is first declared effective by the Commission or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded within fifteen business days by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself declared effective within five business days (each such event referred to
in clauses (i) through (iv), a "Registration Default"), then the Company agrees
to pay liquidated damages to each Holder of Transfer Restricted Securities with
respect to the first 90-day period immediately following the occurrence of such
Registration Default, in an amount equal to $.05 per week per $1,000 principal
amount of Transfer Restricted Securities held by such Holder for each week or
portion thereof that the Registration Default continues. The amount of the
liquidated damages shall increase by an additional $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of $.25 per week per $1,000 principal
amount of Transfer Restricted Securities. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii)
above, or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made

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usable in the case of (iv) above, the liquidated damages payable with respect to
the Transfer Restricted Securities as a result of such clause (i), (ii), (iii)
or (iv), as applicable, shall cease.

          All accrued liquidated damages shall be paid to the Global Note Holder
by wire transfer of immediately available funds or by federal funds check and to
Holders of Certificated Securities by mailing checks to their registered
addresses on each Damages Payment Date. All obligations of the Company set forth
in the preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to
such security shall have been satisfied in full.

SECTION 6.   REGISTRATION PROCEDURES

          (a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all applicable provisions of
Section 6(c) below, shall use its best efforts to effect such exchange and to
permit the sale of Broker-Dealer Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:

               (i) If, following the date hereof, there has been published a
          change in Commission policy with respect to exchange offers such as
          the Exchange Offer, such that in the reasonable opinion of counsel to
          the Company there is a substantial question as to whether the Exchange
          Offer is permitted by applicable federal law, the Company hereby
          agrees to seek a no-action letter or other favorable decision from the
          Commission allowing the Company to Consummate an Exchange Offer for
          such Series A Notes. The Company hereby agrees to pursue the issuance
          of such a decision to the Commission staff level. In connection with
          the foregoing, the Company hereby agrees to take all such other
          actions as are reasonably requested by the Commission or otherwise
          required in connection with the issuance of such decision, including
          without limitation (A) participating in telephonic conferences with
          the Commission, (B) delivering to the Commission staff an analysis
          prepared by counsel to the Company setting forth the legal bases, if
          any, upon which such counsel has concluded that such an Exchange Offer
          should be permitted and (C) diligently pursuing a resolution (which
          need not be favorable) by the Commission staff of such submission.

               (ii) As a condition to its participation in the Exchange Offer
          pursuant to the terms of this Agreement, each Holder of Transfer
          Restricted Securities shall furnish upon the request of the Company,
          prior to the Consummation of the Exchange Offer, a written
          representation to the Company (which may be contained in the letter of
          transmittal contemplated by the Exchange Offer Registration Statement)
          to the effect that (A) it is not an affiliate of the Company, (B) it
          is not engaged in, and does not intend to engage in, and has no
          arrangement or understanding with any person to participate in, a
          distribution of the Exchange Notes to be issued in the Exchange Offer
          and (C) it is acquiring the Exchange Notes in its ordinary course of
          business. Each Holder hereby acknowledges and agrees that any
          Broker-Dealer and any such Holder using the Exchange Offer to

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          participate in a distribution of the securities to be acquired in the
          Exchange Offer (1) could not under Commission policy as in effect on
          the date of this Agreement rely on the position of the Commission
          enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991)
          and Exxon Capital Holdings Corporation (available May 13, 1988), as
          interpreted in the Commission's letter to Shearman & Sterling dated
          July 2, 1993, and similar no- action letters (including, if
          applicable, any no-action letter obtained pursuant to clause (i)
          above), and (2) must comply with the registration and prospectus
          delivery requirements of the Act in connection with a secondary resale
          transaction and that such a secondary resale transaction must be
          covered by an effective registration statement containing the selling
          security holder information required by Item 507 or 508, as
          applicable, of Regulation S-K if the resales are of Exchange Notes
          obtained by such Holder in exchange for Series A Notes acquired by
          such Holder directly from the Company or an affiliate thereof.

               (iii) Prior to effectiveness of the Exchange Offer Registration
          Statement, the Company shall provide a supplemental letter to the
          Commission (A) stating that the Company is registering the Exchange
          Offer in reliance on the position of the Commission enunciated in
          Exxon Capital Holding Corporation (available May 13, 1988), Morgan
          Stanley and Co., Inc. (available June 5, 1991) and, if applicable, any
          no-action letter obtained pursuant to clause (i) above, (B) including
          a representation that the Company has not entered into any arrangement
          or understanding with any Person to distribute the Exchange Notes to
          be received in the Exchange Offer and that, to the best of the
          Company's information and belief, each Holder participating in the
          Exchange Offer is acquiring the Exchange Notes in its ordinary course
          of business and has no arrangement or understanding with any Person to
          participate in the distribution of the Exchange Notes received in the
          Exchange Offer and (C) any other undertaking or representation
          required by the Commission as set forth in any no-action letter
          obtained pursuant to clause (i) above.

          (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance with
the provisions hereof.

          (c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Exchange Offer Registration Statement and the related Prospectus, to the extent
that the same are required to be available to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers), the Company shall:

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               (i) use its best efforts to keep such Registration Statement
          continuously effective and provide all requisite financial statements
          for the period specified in Section 3 or 4 of this Agreement, as
          applicable. Upon the occurrence of any event that would cause any such
          Registration Statement or the Prospectus contained therein (A) to
          contain a material misstatement or omission or (B) not to be effective
          and usable for resale of Transfer Restricted Securities during the
          period required by this Agreement, the Company shall file promptly an
          appropriate amendment to such Registration Statement, (1) in the case
          of clause (A), correcting any such misstatement or omission, and (2)
          in the case of clauses (A) and (B), use its best efforts to cause such
          amendment to be declared effective and such Registration statement and
          the related Prospectus to become usable for their intended purpose(s)
          as soon as practicable thereafter.

               (ii) prepare and file with the Commission such amendments and
          post-effective amendments to the Registration Statement as may be
          necessary to keep the Registration Statement effective for the
          applicable period set forth in Section 3 or 4 hereof, or such shorter
          period as will terminate when all Transfer Restricted Securities
          covered by such Registration Statement have been sold; cause the
          Prospectus to be supplemented by any required Prospectus supplement,
          and as so supplemented to be filed pursuant to Rule 424 under the Act,
          and to comply fully with Rules 424, 430A and 462, as applicable, under
          the Act in a timely manner; and comply with the provisions of the Act
          with respect to the disposition of all securities covered by such
          Registration Statement during the applicable period in accordance with
          the intended method or methods of distribution by the sellers thereof
          set forth in such Registration Statement or supplement to the
          Prospectus;

               (iii) advise the underwriter(s) if any, and selling Holders
          promptly and, if requested by such Persons, confirm such advice in
          writing, (A) when the Prospectus or any Prospectus supplement or
          post-effective amendment has been filed, and, with respect to any
          Registration Statement or any post-effective amendment thereto, when
          the same has become effective, (B) of any request by the Commission
          for amendments to the Registration Statement or amendments or
          supplements to the Prospectus or for additional information relating
          thereto, (C) of the issuance by the Commission of any stop order
          suspending the effectiveness of the Registration Statement under the
          Act or of the suspension by any state securities commission of the
          qualification of the Transfer Restricted Securities for offering or
          sale in any jurisdiction, or the initiation of any proceeding for any
          of the preceding purposes, (D) of the existence of any fact or the
          happening of any event that makes any statement of a material fact
          made in the Registration Statement, the Prospectus, any amendment or
          supplement thereto or any document incorporated by reference therein
          untrue, or that requires the making of any additions to or changes in
          the Registration Statement in order to make the statements therein not
          misleading, or that requires the making of any additions to or changes
          in 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, or any state
          securities commission or other regulatory authority shall issue an
          order suspending the

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          qualification or exemption from qualification of the Transfer
          Restricted Securities under state securities or Blue Sky laws, the
          Company shall use its best efforts to obtain the withdrawal or lifting
          of such order at the earliest possible time;

               (iv) furnish to the Initial Purchaser(s) each selling Holder
          named in any Registration Statement or Prospectus and each of the
          underwriter(s) in connection with such sale, if any, before filing
          with the Commission, copies of any Registration Statement or any
          Prospectus included therein or any amendments or supplements to any
          such Registration Statement or Prospectus (including all documents
          incorporated by reference after the initial filing of such
          Registration Statement), which documents will be subject to the review
          and comment of such Holders and underwriter(s) in connection with such
          sale, if any, for a period of at least five Business Days, and the
          Company will not file any such Registration Statement or Prospectus or
          any amendment or supplement to any such Registration Statement or
          Prospectus (including all such documents incorporated by reference) to
          which the selling Holders of the Transfer Restricted Securities
          covered by such Registration Statement or the underwriter(s) in
          connection with such sale, if any, shall reasonably object within five
          Business Days after the receipt thereof;

               (v) promptly prior to the filing of any document that is to be
          incorporated by reference into a Registration Statement or Prospectus,
          provide copies of such document to the selling Holders and to the
          underwriter(s) in connection with such sale, if any, make the
          Company's representatives available for discussion of such document
          and other customary due diligence matters, and include such
          information in such document prior to the filing thereof as such
          selling Holders or underwriter(s) if any, reasonably may request;

               (vi) make available at reasonable times for inspection by the
          selling Holders, any managing underwriter participating in any
          disposition pursuant to such Registration Statement and any attorney
          or accountant retained by such selling Holders or any of such
          underwriter(s), all financial and other records, material corporate
          documents and properties of the Company and cause the Company's
          officers, directors and employees to supply all information reasonably
          requested by any such Holder, underwriter, attorney or accountant in
          connection with such Registration Statement or any posteffective
          amendment thereto subsequent to the filing thereof and prior to its
          effectiveness;

               (vii) if requested by any selling Holders or the underwriter(s)
          in connection with such sale, if any, promptly include in any
          Registration Statement or Prospectus, pursuant to a supplement or
          post-effective amendment if necessary, such information as such
          selling Holders and underwriter(s) if any, may reasonably request to
          have included therein, including, without limitation, information
          relating to the "Plan of Distribution" of the Transfer Restricted
          Securities, information with respect to the principal amount of
          Transfer Restricted Securities being sold to such underwriter(s) the
          purchase price being paid therefor and any other terms of the offering
          of the Transfer Restricted Securities to be sold in such offering; and
          make all required filings of such Prospectus supplement or
          post-effective amendment as soon as practicable after the Company is
          notified of the matters to be included in such Prospectus supplement
          or post-effective amendment;

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               (viii) furnish to each selling Holder and each of the
          underwriter(s) in connection with such sale, if any, without charge,
          at least one copy of the Registration Statement, as first filed with
          the Commission, and of each amendment thereto, including all documents
          incorporated by reference therein and all exhibits (including exhibits
          incorporated therein by reference);

               (ix) deliver to each selling Holder and each of the
          underwriter(s) if any, without charge, as many copies of the
          Prospectus (including each preliminary prospectus) and any amendment
          or supplement thereto as such Persons reasonably may request; the
          Company hereby consents to the use (in accordance with law) of the
          Prospectus and any amendment or supplement thereto by each of the
          selling Holders and each of the underwriter(s), if any, in connection
          with the offering and the sale of the Transfer Restricted Securities
          covered by the Prospectus or any amendment or supplement thereto;

               (x) enter into such agreements (including an underwriting
          agreement) and make such representations and warranties and take all
          such other actions in connection therewith in order to expedite or
          facilitate the disposition of the Transfer Restricted Securities
          pursuant to any Registration Statement contemplated by this Agreement
          as may be reasonably requested by any Holder of Transfer Restricted
          Securities or underwriter in connection with any sale or resale
          pursuant to any Registration Statement contemplated by this Agreement,
          and in such connection, whether or not an underwriting agreement is
          entered into and whether or not the registration is an Underwritten
          Registration, the Company shall:

                    (A) furnish (or in the case of paragraphs (2) and (3), use
               its best efforts to furnish) to each selling Holder and each
               underwriter, if any, upon the effectiveness of the Shelf
               Registration Statement and to each Restricted Broker- Dealer upon
               Consummation of the Exchange Offer:

                         (1) a certificate, dated the date of Consummation of
                    the Exchange Offer or the date of effectiveness of the Shelf
                    Registration Statement, as the case may be, signed on behalf
                    of the Company by (x) the President or any Vice President
                    and (y) a principal financial or accounting officer of the
                    Company, confirming, as of the date thereof, the matters set
                    forth in paragraphs (a) through (d) of Section 10 of the
                    Purchase Agreement and such other similar matters as the
                    Holders, underwriter(s) and/or Restricted Broker Dealers may
                    reasonably request;

                         (2) an opinion, dated the date of Consummation of the
                    Exchange Offer or the date of effectiveness of the Shelf
                    Registration Statement, as the case may be, of counsel for
                    the Company covering matters similar to those set forth in
                    paragraph (f) of Section 10 of the Purchase Agreement and
                    such other matters as the Holders, underwriters and/or
                    Restricted Broker Dealers may reasonably request, and in any
                    event

                                       12
<PAGE>   13

                    including a statement to the effect that such counsel has
                    participated in conferences with officers and other
                    representatives of the Company, representatives of the
                    independent public accountants for the Company and have
                    considered the matters required to be stated therein and the
                    statements contained therein, although such counsel has not
                    independently verified the accuracy, completeness or
                    fairness of such statements; and that such counsel advises
                    that, on the basis of the foregoing (relying as to
                    materiality to a large extent upon facts provided to such
                    counsel by officers and other representatives of the Company
                    and without independent check or verification), no facts
                    came to such counsel's attention that caused such counsel to
                    believe that the applicable Registration Statement, at the
                    time such Registration Statement or any post-effective
                    amendment thereto became effective and, in the case of the
                    Exchange Offer Registration Statement, as of the date of
                    Consummation of the Exchange Offer, contained an untrue
                    statement of a material fact or omitted to state a material
                    fact required to be stated therein or necessary to make the
                    statements therein not misleading, or that the Prospectus
                    contained in such Registration Statement as of its date and,
                    in the case of the opinion dated the date of Consummation of
                    the Exchange Offer, as of the date of Consummation,
                    contained an untrue statement of a material fact or omitted
                    to state a material fact necessary in order to make the
                    statements therein, in the light of the circumstances under
                    which they were made, not misleading. Without limiting the
                    foregoing, such counsel may state further that such counsel
                    assumes no responsibility for, and has not independently
                    verified, the accuracy, completeness or fairness of the
                    financial statements, notes and schedules and other
                    financial data included in any Registration Statement
                    contemplated by this Agreement or the related Prospectus;
                    and

                         (3) a customary comfort letter, dated as of the date of
                    effectiveness of the Shelf Registration Statement or the
                    date of Consummation of the Exchange Offer, as the case may
                    be, from the Company's independent accountants, in the
                    customary form and covering matters of the type customarily
                    covered in comfort letters to underwriters in connection
                    with primary underwritten offerings, and affirming the
                    matters set forth in the comfort letters delivered pursuant
                    to Section 10 of the Purchase Agreement, without exception.

                    (B) set forth in full or incorporate by reference in the
               underwriting agreement, if any, in connection with any sale or
               resale pursuant to any Shelf Registration Statement, the
               indemnification provisions and procedures of Section 8 hereof
               with respect to all parties to be indemnified pursuant to said
               Section; and

                    (C) deliver such other documents and certificates as may be
               reasonably requested by the selling Holders, the underwriter(s)
               if any, and Restricted Broker

                                       13
<PAGE>   14

               Dealers, if any, to evidence compliance with clause (A) above and
               with any customary conditions contained in the underwriting
               agreement or other agreement entered into by the Company pursuant
               to this clause (C).

          The above shall be done at each closing under such underwriting or
similar agreement, as and to the extent required thereunder, and if at any time
the representations and warranties of the Company contemplated in (A)(1) above
cease to be true and correct, the Company shall so advise the underwriter(s), if
any, the selling Holders and each Restricted Broker-Dealer promptly and, if
requested by such Persons, shall confirm such advice in writing;

               (xi) prior to any public offering of Transfer Restricted
          Securities, cooperate with the selling Holders, the underwriter(s) if
          any, and their respective counsel in connection with the registration
          and qualification of the Transfer Restricted Securities under the
          securities or Blue Sky laws of such jurisdictions as the selling
          Holders or underwriter(s), if any, may request and do any and all
          other acts or things necessary or advisable to enable the disposition
          in such jurisdictions of the Transfer Restricted Securities covered by
          the applicable Registration Statement; provided, however, that the
          Company shall not be required to register or qualify as a foreign
          corporation where it is not now so qualified or to take any action
          that would subject it to the service of process in suits or to
          taxation, other than as to matters and transactions relating to the
          Registration Statement, in any jurisdiction where it is not now so
          subject;

               (xii) issue, upon the request of any Holder of Series A Notes
          covered by any Shelf Registration Statement contemplated by this
          Agreement, Exchange Notes having an aggregate principal amount equal
          to the aggregate principal amount of Series A Notes surrendered to the
          Company by such Holder in exchange therefor or being sold by such
          Holder; such Exchange Notes to be registered in the name of such
          Holder or in the name of the purchaser(s) of such Notes, as the case
          may be; in return, the Series A Notes held by such Holder shall be
          surrendered to the Company for cancellation;

               (xiii) in connection with any sale of Transfer Restricted
          Securities that will result in such securities no longer being
          Transfer Restricted Securities, cooperate with the selling Holders and
          the underwriter(s), if any, to facilitate the timely preparation and
          delivery of certificates representing Transfer Restricted Securities
          to be sold and not bearing any restrictive legends; and to register
          such Transfer Restricted Securities in such denominations and such
          names as the Holders or the underwriter(s), if any, may request at
          least two Business Days prior to such sale of Transfer Restricted
          Securities;

               (xiv) use its best efforts to cause the disposition of the
          Transfer Restricted Securities covered by the Registration Statement
          to be registered with or approved by such other governmental agencies
          or authorities as may be necessary to enable the seller or sellers
          thereof or the underwriter(s), if any, to consummate the disposition
          of such Transfer Restricted Securities, subject to the proviso
          contained in clause (xi) above;

               (xv) subject to Section 6(c)(i), if any fact or event
          contemplated by Section

                                       14
<PAGE>   15

          6(c)(iii)(D) above shall exist or have occurred, prepare a supplement
          or post-effective amendment to the Registration Statement or related
          Prospectus or any document incorporated therein by reference or file
          any other required document so that, as thereafter delivered to the
          purchasers of Transfer Restricted Securities, the Prospectus will not
          contain an untrue statement of a material fact or omit to state any
          material fact necessary to make the statements therein, in the light
          of the circumstances under which they were made, not misleading;

               (xvi) provide a CUSIP number for all Transfer Restricted
          Securities not later than the effective date of a Registration
          Statement covering such Transfer Restricted Securities and provide the
          Trustee under the Indenture with printed certificates for the Transfer
          Restricted Securities which are in a form eligible for deposit with
          the Depository Trust Company;

               (xvii) cooperate and assist in any filings required to be made
          with the NASD and in the performance of any due diligence
          investigation by any underwriter (including any "qualified independent
          underwriter") that is required to be retained in accordance with the
          rules and regulations of the NASD, and use its best efforts to cause
          such Registration Statement to become effective and approved by such
          governmental agencies or authorities as may be necessary to enable the
          Holders selling Transfer Restricted Securities to consummate the
          disposition of such Transfer Restricted Securities;

               (xviii) otherwise use its best efforts to comply with all
          applicable rules and regulations of the Commission, and make generally
          available to its security holders with regard to any applicable
          Registration Statement, as soon as practicable, a consolidated
          earnings statement meeting the requirements of Rule 158 (which need
          not be audited) covering a twelve-month period beginning after the
          effective date of the Registration Statement (as such term is defined
          in paragraph (c) of Rule 158 under the Act);

               (xix) cause the Indenture to be qualified under the TIA not later
          than the effective date of the first Registration Statement required
          by this Agreement and, in connection therewith, cooperate with the
          Trustee and the Holders of Notes to effect such changes to the
          Indenture as may be required for such Indenture to be so qualified in
          accordance with the terms of the TIA; and execute and use its best
          efforts to cause the Trustee to execute, all documents that may be
          required to effect such changes and all other forms and documents
          required to be filed with the Commission to enable such Indenture to
          be so qualified in a timely manner; and

               (xx) provide promptly to each Holder upon request each document
          filed with the Commission pursuant to the requirements of Section 13
          or Section 15(d) of the Exchange Act.

          (d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(i) or any notice from the Company of the existence of any fact of
the kind described in Section 6(c)(iii)(D) hereof, such

                                       15
<PAGE>   16

Holder will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xv) hereof, or until it is advised in writing by the Company that the use
of the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (the
"Advice"). If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of either such
notice. In the event the Company shall give any such notice, the time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(c)(i) or Section 6(c)(iii)(D) hereof to and including the date when
each selling Holder covered by such Registration Statement shall have received
the copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xv) hereof or shall have received the Advice.

SECTION 7.   REGISTRATION EXPENSES

          (a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees; (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing certificates for the Exchange Notes
to be issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of counsel for
the Company and (other than in connection with the Exchange Offer) the Holders
of Transfer Restricted Securities; (v) all application and filing fees, if any,
in connection with listing the Notes on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).

          The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.

          (b) In connection with the Shelf Registration Statement, the Company
will reimburse the Holders of Transfer Restricted Securities registered pursuant
to the Shelf Registration Statement, for the reasonable fees and disbursements
of not more than one counsel, who shall be chosen by the Holders of a majority
in principal amount of the Transfer Restricted Securities for whose benefit the
Shelf Registration Statement is being prepared in consultation with the Company.

SECTION 8.   INDEMNIFICATION AND CONTRIBUTION

          Indemnification. (a) The Company agrees, to the extent permitted by
law, to indemnify

                                       16
<PAGE>   17

and hold harmless each Holder and each person, if any, who controls any Holder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act or otherwise
("Indemnified Holder"), and to reimburse the Holders and such controlling person
or persons, if any, for any legal or other expenses incurred by them in
connection with defending any action, suit or proceeding (including governmental
investigations) as provided in Section 8(c) hereof, insofar as such losses,
claims, damages, liabilities or actions, suits or proceedings (including
governmental investigations) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement, or, if any Registration Statement shall be amended or supplemented,
in the Registration Statement as so amended or supplemented, or arise out of or
are based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any such untrue statement or alleged
untrue statement or omission or alleged omission which was made in the
Registration Statement or in the Registration Statement as so amended or
supplemented, in reliance upon and in conformity with information furnished in
writing to the Company by, any Holder expressly for use therein.

          The Company's indemnity agreement contained in this Section 8(a), and
the covenants, representations and warranties of the Company contained in this
Agreement, shall remain in full force and effect regardless of any investigation
made by or on behalf of any person, and the indemnity agreement contained in
this Section 8 shall survive any termination of this Agreement. The liabilities
of the Company in this Section 8(a) are in addition to any other liabilities of
the Company under this Agreement or otherwise.

          (b) Each Holder agrees, severally and not jointly, to the extent
permitted by law, to indemnify, hold harmless and reimburse the Company and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, to the same extent and upon the same
terms as the indemnity agreement of the Company set forth in Section 8(a)
hereof, but only with respect to alleged untrue statements or omissions made in
the Registration Statement or in the Registration Statement, as amended or
supplemented, (if applicable) in reliance upon and in conformity with
information furnished in writing to the Company by such Holder expressly for use
therein.

          The indemnity agreement on the part of each Holder contained in this
Section 8(b) shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any other person, and the
indemnity agreement contained in this Section 8(b) shall survive any termination
of this Agreement.

          (c) If a claim is made or an action, suit or proceeding (including
governmental investigations) is commenced or threatened against any person as to
which indemnity may be sought under Section 8(a) or 8(b), such person (the
"Indemnified Person") shall notify the person against whom such indemnity may be
sought (the "Indemnifying Person ") promptly after any assertion of such claim
threatening to institute an action, suit or proceeding or if such an action,

                                       17
<PAGE>   18

suit or proceeding is commenced against such Indemnified Person, promptly after
such Indemnified Person shall have been served with a summons or other first
legal process, giving information as to the nature and basis of the claim.
Failure to so notify the Indemnifying Person shall not, however, relieve the
Indemnifying Person from any liability which it may have on account of the
indemnity under Section 8(a) or 8(b) if the Indemnifying Person has not been
prejudiced in any material respect by such failure. Subject to the immediately
succeeding sentence, the Indemnifying Person shall assume the defense of any
such litigation or proceeding, including the employment of counsel and the
payment of all expenses, with such counsel being designated, subject to the
immediately succeeding sentence, in writing by a majority in principal amount of
the Holders in the case of parties indemnified pursuant to Section 8(b) and by
the Company in the case of parties indemnified pursuant to Section 8(a). Any
Indemnified Person shall have the right to participate in such litigation or
proceeding and to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include (x) the Indemnifying Person and (y)
the Indemnified Person and, in the written opinion of counsel to such
Indemnified Person, representation of both parties by the same counsel would be
inappropriate due to actual or likely conflicts of interest between them, in
either of which cases the reasonable fees and expenses of counsel (including
disbursements) for such Indemnified Person shall be reimbursed by the
Indemnifying Person to the Indemnified Person. If there is a conflict as
described in clause (ii) above, and the Indemnified Persons have participated in
the litigation or proceeding utilizing separate counsel whose fees and expenses
have been reimbursed by the Indemnifying Person and the Indemnified Persons, or
any of them, are found to be such fees and expenses of such separate counsel as
the Indemnifying Person shall have reimbursed. It is understood that the
Indemnifying Person shall not, in connection with any litigation or proceeding
or related litigation or proceedings in the same jurisdiction as to which the
Indemnified Persons are entitled to such separate representation, be liable
under this Agreement for the reasonable fees and out-of-pocket expenses of more
than one separate firm (together with not more than one appropriate local
counsel) for all such Indemnified Persons. Subject to the next paragraph, all
such fees and expenses shall be reimbursed by payment to the Indemnified Persons
of such reasonable fees and expenses of counsel promptly after payment thereof
by the Indemnified Persons.

          In furtherance of the requirement above that fees and expenses of any
separate counsel for the Indemnified Persons shall be reasonable, the Holders
and the Company agree that the Indemnifying Person's obligations to pay such
fees and expenses shall be conditioned upon the following:

               (1) in case separate counsel is proposed to be retained by the
          Indemnified Persons pursuant to clause (ii) of the preceding
          paragraph, the Indemnified Persons shall in good faith fully consult
          with the Indemnifying Person in advance as to the selection of such
          counsel;

               (2) reimbursable fees and expenses of such separate counsel shall
          be detailed and supported in a manner reasonably acceptable to the
          Indemnifying Person (but nothing

                                       18
<PAGE>   19

          herein shall be deemed to require the furnishing to the Indemnifying
          Person of any information, including without limitation, computer
          print-outs of lawyers' daily time entries, to the extent that, in the
          judgment of such counsel, furnishing such information might reasonably
          be expected to result in a waiver of any attorney-client privilege);
          and

               (3) the Company and the Holders shall cooperate in monitoring and
          controlling the fees and expenses of separate counsel for Indemnified
          Persons for which the Indemnifying Person is liable hereunder, and the
          Indemnified Person shall use every reasonable effort to cause such
          separate counsel to minimize the duplication of activities as between
          themselves and counsel to the Indemnifying Person.

          The Indemnifying Person shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees, subject to the
provisions of this Section 8, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.

          Contribution. If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an Indemnified Person under this
Section 8 in respect of any losses, claims, damages or liabilities (or actions,
suits or proceedings (including governmental investigations) in respect thereof)
referred to therein, then each Indemnifying Person under this Section 8 shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Indemnifying Person on the one hand and the Indemnified Person on the
other from the sale of the Transfer Restricted Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each Indemnifying Person shall contribute to such amount
paid or payable by such Indemnified Person in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
the Holders on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Holders were treated as one entity for such

                                       19
<PAGE>   20

purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages or
liabilities (or actions, suits or proceedings (including governmental
proceedings) in respect thereof) referred to above in this Section 8 shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or defending any such
action, suits or proceedings (including governmental proceedings) or claim,
provided that the provisions of Section 8 have been complied with (in all
material respects) in respect of any separate counsel for such Indemnified
Person. Notwithstanding the provisions of this Section 8, no Holder shall be
required to contribute any amount greater than the excess of the amount by which
the total received by such Holder with respect to the sale of its Transfer
Restricted Securities pursuant to a Registration Statement exceeds the sum of
(A) the amount paid by such Holder for such Transfer Restricted Securities plus
(B) the amount of any damages which such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations in this Section 8 to contribute are several in proportion to their
respective underwriting obligations and not joint.

          The agreement with respect to contribution contained in this Section 8
hereof shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any Holder, and shall survive any
termination of this Agreement.

SECTION 9.   RULE 144A

          The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in which
the Company is not subject to Section 13 or 15(d) of the Securities Exchange
Act, to make available, upon request of any Holder of Transfer Restricted
Securities, to any Holder or beneficial owner of Transfer Restricted Securities
in connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities designated by such Holder or beneficial owner,
the information required by Rule 144A(d)(4) under the Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A.

SECTION 10.   UNDERWRITTEN REGISTRATIONS

          No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, and other documents required under the terms
of such underwriting arrangements.

SECTION 11.   SELECTION OF UNDERWRITERS

          For any Underwritten Offering, the investment banker or investment
bankers and

                                       20
<PAGE>   21

manager or managers for any Underwritten Offering that will administer such
offering will be selected by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities included in such offering;
provided, that such investment bankers and managers must be reasonably
satisfactory to the Company. The Holders of Transfer Restricted Securities
included in any such Underwritten Offering shall be responsible for paying all
underwriting or placement fees charged, or costs or expenses incurred, by such
investment bankers and managers in connection with such Underwritten Offering.
Such investment bankers and managers are referred to herein as the
"underwriters."

SECTION 12.   MISCELLANEOUS

          (a) Remedies. Each Holder, in addition to being entitled to exercise
all rights provided herein, in the Indenture, the Purchase Agreement or granted
by law, including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by them of the provisions of this Agreement and hereby agree
to waive the defense in any action for specific performance that a remedy at law
would be adequate.

          (b) No Inconsistent Agreements. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement granting any registration rights with respect to its
securities to any Person. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the date
hereof.

          (c) Adjustments Affecting the Notes. The Company will not take any
action, or voluntarily permit any change to occur, with respect to the Notes
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.

          (d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 12(d)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the Exchange Offer and
that does not affect directly or indirectly the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.

          (e) Notices. All notices and other communications provided for or
permitted hereunder

                                       21
<PAGE>   22

shall be made in writing by hand-delivery, first-class mail (registered or
certified, return receipt requested), telex, telecopier, or air courier
guaranteeing overnight delivery:

               (i) if to a Holder, at the address set forth on the records of
          the Registrar under the Indenture, with a copy to the Registrar under
          the Indenture; and

               (ii) if to Panhandle:

                       c/o CMS Energy Corporation
                       Fairlane Plaza South, Suite 1100
                       330 Town Center Drive
                       Dearborn, Michigan 48126

                       Telecopier No.: (313) 436-9258, Attention: Alan M. Wright

                  With a copy to:

                       Robert C. Shrosbree, Esq.
                       Telecopier No.: (313) 436-9225

          All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.

          Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

          (f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities directly from such Holder.

          (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

          (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

                                       22
<PAGE>   23

          (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

          (k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

                                       23
<PAGE>   24

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                    PANHANDLE EASTERN PIPE LINE COMPANY

                                    By:    /s/ Alan M. Wright
                                        ----------------------------------------
                                    Name:      Alan M. Wright
                                    Title.     Senior Vice President, Chief
                                               Financial Officer and Treasurer

DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION

By: /s/ Gavin H. Wolfe
   ----------------------------------
   Name: Gavin H. Wolfe
   Title: Senior Vice President<PAGE>   1

                                                                   EXHIBIT 10(f)

                                  $100,000,000

                       PANHANDLE EASTERN PIPE LINE COMPANY

               $100,000,000 8.25% Senior Notes due 2010, Series A

                         -------------------------------

                               Purchase Agreement

                                           March 22, 2000

Donaldson, Lufkin & Jenrette
  Securities Corporation
277 Park Avenue
New York, New York 10172

Dear Sirs:

          Panhandle Eastern Pipe Line Company, a Delaware corporation (the
"Company") confirms its agreement with Donaldson, Lufkin & Jenrette Securities
Corporation (the "Initial Purchaser") with respect to the issue and sale by the
Company and the purchase by the Initial Purchaser of the principal amount of
$100,000,000 of its 8.25% Senior Notes due 2010, Series A (the "Series A
Notes"), subject to the terms and conditions set forth herein. The Series A
Notes are to be issued pursuant to the provisions of the Indenture, dated as of
March 29, 1999, by and among the Company, CMS Panhandle Holding Company, a
Michigan company (which has merged into the Company), and NBD Bank, as trustee
(predecessor to Bank One Trust Company, National Association), relating to the
Notes (the "Base Indenture"), as supplemented by the Second Supplemental
Indenture, to be dated March 27, 2000 (the "Supplemental Indenture" and together
with the Base Indenture, the "Indenture"), between the Company and Bank One
Trust Company, National Association, as trustee (the "Trustee"). Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Indenture.

          Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date (as defined
below), for so long as such Series A Notes constitute "Transfer Restricted
Securities" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "Commission"), under the circumstances
set forth therein, (i) a registration statement (the "Registration Statement")
under the Securities Act of 1933, as amended (the "Act") relating to
$100,000,000 in aggregate principal amount of the Company's 8.25% Senior Notes
due 2010, Series B (the "Exchange Notes") to be offered in exchange for the
Series A Notes (such offer to exchange being referred to as the "Exchange

<PAGE>   2

Offer") and (ii) a shelf registration statement pursuant to Rule 415 under the
Act (the "Shelf Registration Statement" and, together with the Exchange Offer
Registration Statement, the "Registration Statements") relating to the resale by
certain holders of the Series A Notes and to use its best efforts to cause such
Registration Statements to be declared and remain effective and usable for the
periods specified in the Registration Rights Agreement and to consummate the
Exchange Offer. The Series A Notes and the Exchange Notes issuable in exchange
therefor are collectively referred to herein as the "Notes." This Agreement, the
Indenture, the Notes and the Registration Rights Agreement are hereinafter
sometimes referred to collectively as the "Operative Documents."

          1. Offering Memorandum: The Series A Notes will be offered and sold to
the Initial Purchaser pursuant to one or more exemptions from the registration
requirements under the Act. The Company has prepared a preliminary offering
memorandum dated March 20, 2000 (the "Preliminary Offering Memorandum") and an
offering memorandum, dated March 22, 2000 (the "Offering Memorandum") relating
to the Series A Notes, which incorporate by reference documents filed by the
Company pursuant to Sections 13, 14 or 15 of the Securities and Exchange Act of
1934, as amended (the "Exchange Act"). As used herein, the term "Preliminary
Offering Memorandum" and "Offering Memorandum" shall include respectively the
documents incorporated by reference therein. Any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Preliminary Offering
Memorandum and Offering Memorandum shall be deemed to include amendments or
supplements to the Preliminary Offering Memorandum and Offering Memorandum, and
documents incorporated by reference after the date of this Agreement and prior
to the termination of the offering of the Series A Notes by the Initial
Purchaser.

          Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes shall bear the
following legend:

          THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
     SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
     OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON
     WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
     WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS
     OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
     TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
     TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
     SECURITIES ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
     TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
     OR (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
     PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH
     ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.

                                       -2-

<PAGE>   3

          2. Agreement to Sell and Purchase: On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company, the principal amount of Series A Notes at a purchase
price equal to     % of the principal amount thereof (the "Purchase Price").

          The Company hereby agrees that, without the prior written consent of
the Initial Purchaser, it will not offer, sell, contract to sell or otherwise
issue debt securities substantially similar to the Series A Notes for a period
from the date of the execution of this Agreement until the date 30 days after
the Closing Date.

          3. Terms of Offering: The Initial Purchaser had advised the Company
that the Initial Purchaser will take offers (the "Exempt Resales") of the Series
A Notes purchased hereunder on the terms set forth in the Offering Memorandum
solely to (i) persons whom the Initial Purchaser reasonably believes to be
"qualified institutional buyers" as defined in Rule 144A under the Act
("QIBs")(such persons being referred to herein as the "Eligible Purchasers").
The Initial Purchaser will offer the Series A Notes to Eligible Purchasers
initially at a price equal to 100% of the principal amount thereof. Such price
may be changed at any time without notice.

          4. Delivery and Payment:

          (a)  Delivery of and payment of the Purchase Price for the Series A
Notes shall be made at the offices of Skadden, Arps, Slate, Meagher & Flom LLP,
4 Times Square, New York, NY 10036, or such other location as may be mutually
acceptable. Payment for the Series A Notes shall be made to the Company in
federal or other funds immediately available in New York City against delivery
of such Series A Notes for the account of the Initial Purchaser at 10:00 a.m.,
New York City time, on March 27, 2000, or at such other time as shall be agreed
upon by the Initial Purchaser and the Company. The time and date of such
delivery and the payment are herein called the "Closing Date."

          (b)  Certificates for the Series A Notes shall be in definitive form
or global form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Series A Notes
shall be delivered to you on the Closing Date for the account of the Initial
Purchaser, with any transfer taxes payable in connection with the transfer of
the Series A Notes to the Initial Purchaser duly paid, against payment of the
Purchase Price therefor plus accrued interest, if any, to the date of payment
and delivery. Certificates for the Series A Notes shall be made available to the
Initial Purchaser for inspection not later than 9:30 a.m., New York City time,
on the business day immediately preceding the Closing Date.

          5. Agreements of the Company: In further consideration of the
agreements of the Initial Purchaser herein contained, the Company covenants as
follows:

                                       -3-

<PAGE>   4

          (a)  To prepare the Preliminary Offering Memorandum and Offering
Memorandum in a form approved by you; to make no amendment or any supplement to
the Preliminary Offering Memorandum and Offering Memorandum which shall be
disapproved by your counsel upon legal grounds in writing, after consultation
with you, promptly after reasonable notice thereof; and to furnish you with
copies thereof.

          (b)  To advise the Initial Purchaser promptly and, if requested by the
Initial Purchaser, confirm such advice in writing, (i) of the issuance by any
state securities commission of any stop order suspending the qualification or
exemption from qualification of any Series A Notes for offering or sale in any
jurisdiction designated by the Initial Purchaser pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose. The Company
shall use its best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Series A Notes under any state
securities or Blue Sky laws and, if at any time any state securities commission
or other federal or state regulatory authority shall issue an order suspending
the qualification or exemption of any Series A Notes under any state securities
or Blue Sky laws, the Company shall use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.

          (c)  Prior to 10:00 a.m., New York City time, on the Business Day next
succeeding the date of this Agreement, or as soon as otherwise mutually agreed,
and from time to time thereafter, to furnish the Initial Purchaser and those
persons identified by the Initial Purchaser to the Company as many copies of the
Offering Memorandum, and any amendments or supplements thereto, in such
quantities as the Initial Purchaser may reasonably request. Subject to the
Initial Purchaser's compliance with its representations and warranties and
agreements set forth in Section 7 hereof, the Company consents to the use of the
Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchaser in connection with Exempt Resales.

          (d)  Until such time as either of the Registration Statements shall be
declared effective by the Commission, but in no event later than nine months
after the date of the Offering Memorandum, any event shall have occurred as a
result of which the Offering Memorandum as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Offering Memorandum is
delivered, not misleading, or, if for any other reason it shall be necessary or
desirable during such same period to amend or supplement the Offering
Memorandum, to notify you and upon your request to prepare and, subject to
Section 5(a) and 5(j) hereof, furnish without charge to each Initial Purchaser
and to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Offering Memorandum or a supplement to the
Offering Memorandum which will correct such statement or omission or effect such
compliance.

          (e)  To use its best efforts to qualify the Series A Notes for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchaser may designate

                                       -4-

<PAGE>   5

and to pay (or cause to be paid), or reimburse (or cause to be reimbursed) the
Initial Purchaser and their counsel for, reasonable filing fees and expenses in
connection therewith (including the reasonable fees and disbursements of counsel
to the Initial Purchaser and filing fees and expenses paid and incurred prior to
the date hereof), provided, however, that the Company shall not be required to
qualify to do business as a foreign corporation or as a securities dealer or to
file a general consent to service of process or to file annual reports or to
comply with any other requirements deemed by the Company to be unduly
burdensome.

          (f)  So long as the Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company on a
consolidated basis, all such financial reports to include a consolidated balance
sheet, a consolidated statement of operations, a consolidated statement of cash
flows and a consolidated statement of shareholders' equity as of the end of and
for such fiscal year, together with comparable information as of the end of and
for the preceding year, certified by the Company's independent public
accountants and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly period of
each fiscal year,) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows as of the end
of and for such period, and for the period from the beginning of such year to
the close of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.

          (g)  So long as any of the Series A Notes remain outstanding and
during any period in which either the Company is not subject to Section 13 or
15(d) of the Exchange Act, to make available to any holder of Series A Notes in
connection with any sale thereof and any prospective purchaser of such Series A
Notes from such holder, the information required by Rule 144A(d)(4) under the
Act.

          (h)  To pay all expenses, fees and taxes (other than transfer taxes on
sales by the Initial Purchaser) in connection with the issuance and delivery of
the Series A Notes, except that the Company shall be required to pay the fees
and disbursements (other than fees and disbursements referred to in paragraph
(e) of this Section 5) of Skadden, Arps, Slate, Meagher & Flom LLP, New York,
New York, counsel to the Initial Purchaser, only in the events provided in
paragraph (i) of this Section 5, the Initial Purchaser hereby agreeing to pay
such fees and disbursements in any other event, and that except as provided in
such paragraph (i), the Company shall not be responsible for any out-of-pocket
expenses of the Initial Purchaser in connection with their services hereunder.

          (i)  If the Initial Purchaser shall not take up and pay for the Series
A Notes due to the failure of the Company to comply with any of the conditions
specified in Section 10 hereof, or, if this Agreement shall be terminated in
accordance with the provisions of Section 11(b) hereof prior to the Closing
Date, to pay the reasonable fees and disbursements of Skadden, Arps, Slate,
Meagher & Flom LLP, counsel to the Initial Purchaser, and, if the Initial
Purchaser shall not take up and pay for the Series A Notes due to the failure of
the Company to comply with any of the conditions specified in Section 10 hereof,
to reimburse the Initial

                                       -5-

<PAGE>   6

Purchaser for their reasonable out-of-pocket expenses, in an aggregate amount
not exceeding a total of $3,000, incurred in connection with the financing
contemplated by this Agreement.

          (j)  During the period referred to in paragraph (d) of this Section 5,
to not amend or supplement the Offering Memorandum unless the Company has
furnished the Initial Purchaser and counsel to the Initial Purchaser with a copy
for their review and comment a reasonable time prior to filing and has
reasonably considered any comments of the Initial Purchaser, or any such
amendment or supplement to which such counsel shall reasonably object on legal
grounds in writing, after consultation with the Initial Purchaser.

          (k)  During the period referred to in paragraph (d) of this Section 5,
to furnish the Initial Purchaser with copies of all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act.

          (l)  During the period referred to in paragraph (d) of this Section 5,
to comply with all requirements under the Exchange Act relating to the filing
with the Commission of its reports pursuant to Section 13 of the Exchange Act
and of its proxy statements pursuant to Section 14 of the Exchange Act.

          (m)  To comply in all material respects with all of its agreements set
forth in the Registration Rights Agreement.

          (n)  To obtain the approval of The Depository Trust Company ("DTC")
for "book-entry" transfer of the Notes, and to comply in all material respects
with all of its agreements set forth in the representation letters of the
Company to DTC relating to the approval of the Notes by DTC for "book-entry"
transfer.

          (o)  Not to (or permit any affiliate to) sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Act) that would be integrated with the sale of the Series A Notes
to the Initial Purchaser or pursuant to Exempt Resales in a manner that would
require the registration of any such sale of the Series A Notes under the Act.

          (p)  Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes.

          (q)  To cause the Exchange Offer to be made in the appropriate form to
permit Exchange Notes registered pursuant to the Act to be offered in exchange
for the Series A Notes and to comply in all material respects with all
applicable federal and state securities laws in connection with the Exchange
Offer.

          (r)  During the period of two years after the Closing Date, not to,
and not permit any of its affiliates (as defined in Rule 144 under the Act) to,
resell any of the Notes which constitute "restricted securities" under Rule 144
that have been reacquired by any of them.

                                       -6-

<PAGE>   7

          (s)  To apply the net proceeds of the offering and sale of the Series
A Notes in the manner set forth in the Offering Memorandum under the caption
"Use of Proceeds".

          6. Representations and Warranties of the Company: The Company
represents and warrants to, and agrees with, the Initial Purchaser that:

          (a)  Each of the Preliminary Offering Memorandum and the Offering
Memorandum does not, and any supplement or amendment to it will not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph shall not apply to
statements in or omissions from the Preliminary Offering Memorandum and the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use therein. No stop order
preventing the use of the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act, has been
issued.

          (b)  The documents incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum, when they were filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed) with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and any further documents so filed and incorporated by
reference will, when they are filed with the Commission, conform in all material
respects to the requirements of the Exchange Act and the rules and regulations
of the Commission promulgated thereunder; none of such documents, when it was
filed (or, if an amendment with respect to any such document was filed, when
such amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and no such further document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading.

          (c)  The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has all requisite authority to own or lease its properties and
conduct its business as described in the Preliminary Offering Memorandum and the
Offering Memorandum and to consummate the transactions contemplated hereby, and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business as described in the
Preliminary Offering Memorandum and the Offering Memorandum or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its Subsidiaries (as defined in Rule 405 under
the Act, and hereinafter called a "Subsidiary"), taken as a whole; each

                                       -7-

<PAGE>   8

Significant Subsidiary (as defined in Rule 405 under the Act, and hereinafter
called a "Significant Subsidiary") of the Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has all requisite authority to own or lease
its properties and conduct its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business as described in the Preliminary Offering Memorandum and the
Offering Memorandum or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.

          (d)  This Agreement has been duly authorized, executed and delivered
by the Company.

          (e)  The Notes are in the form contemplated by the Indenture and have
been duly authorized by the Company. At the Closing Date, the Series A Notes
will have been duly executed and delivered by the Company and, the Series A
Notes, when authenticated by the Trustee in the manner provided for in the
Indenture and delivered against payment therefor as provided in this Agreement,
will constitute valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding at law or in equity), and will be entitled to the security afforded
by the Indenture equally and ratably with all securities outstanding thereunder.
The Notes conform in all material respects to the descriptions thereof in the
Preliminary Offering Memorandum and the Offering Memorandum.

          (f)  The Registration Rights Agreement has been duly authorized by the
Company. At the Closing Date, the Registration Rights Agreement will have been
duly executed and delivered by the Company and will constitute a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms except to the extent that the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or in
equity) by, equitable principles of general applicability. The Registration
Rights Agreement conforms in all material respects to the description thereof in
the Preliminary Offering Memorandum and the Offering Memorandum.

          (g)  The Indenture has been duly authorized by the Company. At the
Closing Date, the Indenture will have been duly executed and delivered by the
Company and will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or by general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity); the Indenture conforms in
all material respects to

                                       -8-

<PAGE>   9

the description thereof in the Preliminary Offering Memorandum and the Offering
Memorandum; and the Indenture conforms to the requirements of the Trust
Indenture Act of 1939, as amended (the "TIA").

          (h)  On and after the Closing Date, of the outstanding capital stock
of each of Trunkline Gas Company, Pan Gas Storage Company and Trunkline LNG
Company and each subsidiary of the Company organized in the United States
(collectively, the "U.S. Subsidiaries") will be owned directly or indirectly by
the Company, free and clear of any security interest, claim, lien, or other
encumbrance or preemptive rights), and there are no outstanding rights
(including, without limitation, preemptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in any of the U.S. Subsidiaries or any
contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any such capital stock, any such convertible or
exchangeable securities or any such rights, warrants or options.

          (i)  The Company and the Significant Subsidiaries have all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and have made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use their properties and
assets and to conduct their businesses in the manner described in the
Preliminary Offering Memorandum and the Offering Memorandum, except to the
extent that the failure to obtain or file would not have a material adverse
effect on either the Company or the Significant Subsidiaries.

          (j)  No order, license, consent, authorization or approval of, or
exemption by, or the giving of notice to, or the registration with any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, and no filing, recording, publication or registration
in any public office or any other place, was or is now required to be obtained
by the Company to authorize its execution or delivery of, or the performance of
its obligations under, this Agreement or any of the Operative Documents, except
such as have been obtained or may be required under state securities or Blue Sky
laws or as referred to in the Preliminary Offering Memorandum and the Offering
Memorandum.

          (k)  None of the issuance and sale of the Notes, or the execution or
delivery by the Company of, or the performance by the Company of its obligations
under, this Agreement or the Operative Documents, did or will conflict with,
result in a breach of any of the terms or provisions of, or constitute a default
or require the consent of any party under the Company's Articles of
Incorporation or by-laws, any material agreement or instrument to which the
Company is a party, any existing applicable law, rule or regulation or any
judgment, order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its
properties or assets, or, except as described in the Preliminary Offering
Memorandum and the Offering Memorandum, did or will result in the creation or
imposition of any lien on the Company's properties or assets.

                                       -9-

<PAGE>   10

          (l)  Except as disclosed in the Offering Memorandum, there is no
action, suit, proceeding, inquiry or investigation (at law or in equity or
otherwise) pending or, to the knowledge of the Company, threatened against
either the Company or a Significant Subsidiary by any governmental authority
that (i) questions the validity, enforceability or performance of this Agreement
or any of the Operative Documents or (ii) if determined adversely, is likely to
have a material adverse effect on the business or financial condition of the
Company, or have a material adverse effect on the ability of the Company to
perform its obligations hereunder or the ability of the Company to consummate
the transactions contemplated by this Agreement.

          (m)  There has not been any material and adverse change in the
business, properties or financial condition of the Company from that set forth
or incorporated by reference in the Offering Memorandum (other than changes
referred to in or contemplated by the Offering Memorandum).

          (n)  Except as set forth in the Offering Memorandum, no event or
condition exists that constitutes, or with the giving of notice or lapse of time
or both would constitute, a default or any breach or failure to perform by the
Company or any of its Significant Subsidiaries in any material respect under any
indenture, mortgage, loan agreement, lease or other material agreement or
instrument to which the Company or any of its Significant Subsidiaries is a
party or by which it or any of its Significant Subsidiaries or any of their
properties may be bound.

          (o)  The Offering Memorandum, as of its date, contained all the
information specified in, and meeting the requirements of, Rule 144A(d)(4) under
the Act.

          (p)  When the Series A Notes are issued and delivered pursuant to this
Agreement, the Series A Notes will not be of the same class (within the meaning
of Rule 144A under the Act) as any security of the Company that is listed on a
national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated inter-dealer quotation system.

          (q)  Neither the Company nor any Affiliate of the Company has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the Act)
which is or will be integrated with the sale of the Series A Notes in a manner
that would require the registration under the Act of the Series A Notes or (ii)
engaged in any form of general solicitation or general advertising in connection
with the offering of the Series A Notes, (as those terms are used in Regulation
D under the Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act, including, but not limited to, publication or
release of articles, notices or other communications published in any newspaper,
magazine, or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general solicitation
or general advertising. No securities of the same class as the Series A Notes
have been issued and sold by the Company within the six-month period immediately
prior to the date hereof.

          (r)  Prior to the effectiveness of any Registration Statement, the
Indenture is not required to be qualified under the TIA.

                                      -10-

<PAGE>   11

          (s)  None of the Company nor any of its affiliates or any person
acting on its or its behalf (other than the Initial Purchaser, as to whom the
Company makes no representation) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S under the Act ("Regulation
S") with respect to the Series A Notes.

          (t)  No registration under the Act of the Series A Notes is required
for the sale of the Series A Notes to the Initial Purchaser as contemplated
hereby or for the Exempt Resales assuming the accuracy of the Initial Purchaser'
representations and warranties and agreements set forth in Section 7 hereof.

          (u)  Neither the Company nor any of its Subsidiaries, after giving
effect to the offering and sale of the Series A Notes, will be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

          The Company acknowledges that the Initial Purchaser and, for purposes
of the opinions to be delivered to the Initial Purchaser pursuant to Section 10
hereof, counsel to the Company and counsel to the Initial Purchaser will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.

          7. Initial Purchaser's Representations and Warranties: Upon the
authorization by you of the release of the Series A Notes, the Initial Purchaser
proposes to offer the Series A Notes for sale upon the terms and conditions set
forth in this Agreement and the Offering Memorandum and the Initial Purchaser
hereby represents and warrants to, and agrees with the Company that:

          (a)  It will offer and sell the Series A Notes only to Eligible
Purchasers;

          (b)  It is an Institutional Accredited Investor; and

          (c)  It will not offer or sell the Series A Notes by any form of
general solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Act.

          8. Indemnification:

          (a)  The Company agrees, to the extent permitted by law, to indemnify
and hold harmless the Initial Purchaser and each person, if any, who controls
any such Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act or otherwise, and to reimburse the Initial Purchaser and such
controlling person or persons, if any, for any legal or other expenses incurred
by them in connection with defending any action, suit or proceeding (including
governmental investigations) as provided in Section 8(c) hereof, insofar as such
losses, claims, damages, liabilities or actions, suits or proceedings (including
governmental investigations) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Offering

                                      -11-

<PAGE>   12

Memorandum, or, if the Offering Memorandum shall be amended or supplemented, in
the Offering Memorandum as so amended or supplemented or arise out of or are
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any such untrue statement or alleged
untrue statement or omission or alleged omission which was made in the Offering
Memorandum or in the Offering Memorandum as so amended or supplemented, in
reliance upon and in conformity with information furnished in writing to the
Company by, or on behalf of, the Initial Purchaser expressly for use therein and
except that this indemnity shall not inure to the benefit of the Initial
Purchaser (or any person controlling such Initial Purchaser) on account of any
losses, claims, damages, liabilities or actions, suits or proceedings arising
from the sale of the Series A Notes to any person if a copy of the Offering
Memorandum, as the same may then be supplemented or amended (excluding, however,
any document then incorporated or deemed incorporated therein by reference), was
not sent or given by or on behalf of the Initial Purchaser to such person (i)
with or prior to the written confirmation of sale involved or (ii) as soon as
available after such written confirmation, relating to an event occurring prior
to the payment for and delivery to such person of the Series A Notes involved in
such sale, and the omission or alleged omission or untrue statement or alleged
untrue statement was corrected in the Offering Memorandum as supplemented or
amended at such time.

          The Company's indemnity agreement contained in this Section 8(a), and
the covenants, representations and warranties of the Company contained in this
Agreement, shall remain in full force and effect regardless of any investigation
made by or on behalf of any person, and shall survive the delivery of and
payment for the Series A Notes hereunder, and the indemnity agreement contained
in this Section 8 shall survive any termination of this Agreement. The
liabilities of the Company in this Section 8(a) are in addition to any other
liabilities of the Company under this Agreement or otherwise.

          (b)  The Initial Purchaser agrees, to the extent permitted by law, to
indemnify, hold harmless and reimburse the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, to the same extent and upon the same terms as the indemnity
agreement of the Company set forth in Section 8(a) hereof, but only with respect
to alleged untrue statements or omissions made in the Offering Memorandum or in
the Offering Memorandum, as amended or supplemented, (if applicable) in reliance
upon and in conformity with information furnished in writing to the Company by
the Initial Purchaser expressly for use therein.

          The indemnity agreement on the part of the Initial Purchaser contained
in this Section 8(b) and the representations and warranties of the Initial
Purchaser contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any other
person, and shall survive the delivery of and payment for the Series A Notes
hereunder, and the indemnity agreement contained in this Section 8(b) shall
survive any termination of this Agreement. The liabilities of the Initial
Purchaser in this Section 8(b) are in addition to any other liabilities of the
Initial Purchaser under this Agreement or otherwise.

                                      -12-

<PAGE>   13

          (c)  If a claim is made or an action, suit or proceeding (including
governmental investigations) is commenced or threatened against any person as to
which indemnity may be sought under Section 8(a) or 8(b), such person (the
"Indemnified Person") shall notify the person against whom such indemnity may be
sought (the "Indemnifying Person") promptly after any assertion of such claim
threatening to institute an action, suit or proceeding or if such an action,
suit or proceeding is commenced against such Indemnified Person, promptly after
such Indemnified Person shall have been served with a summons or other first
legal process, giving information as to the nature and basis of the claim.
Failure to so notify the Indemnifying Person shall not, however, relieve the
Indemnifying Person from any liability which it may have on account of the
indemnity under Section 8(a) or 8(b) if the Indemnifying Person has not been
prejudiced in any material respect by such failure. Subject to the immediately
succeeding sentence, the Indemnifying Person shall assume the defense of any
such litigation or proceeding, including the employment of counsel and the
payment of all expenses, with such counsel being designated, subject to the
immediately succeeding sentence, in writing by the Initial Purchaser in the case
of parties indemnified pursuant to Section 8(b) and by the Company in the case
of parties indemnified pursuant to Section 8(a). Any Indemnified Person shall
have the right to participate in such litigation or proceeding and to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include (x) the Indemnifying Person and (y) the Indemnified Person and,
in the written opinion of counsel to such Indemnified Person, representation of
both parties by the same counsel would be inappropriate due to actual or likely
conflicts of interest between them, in either of which cases the reasonable fees
and expenses of counsel (including disbursements) for such Indemnified Person
shall be reimbursed by the Indemnifying Person to the Indemnified Person. If
there is a conflict as described in clause (ii) above, and the Indemnified
Persons have participated in the litigation or proceeding utilizing separate
counsel whose fees and expenses have been reimbursed by the Indemnifying Person
and the Indemnified Persons, or any of them, are found to be solely liable, such
Indemnified Person shall repay to the Indemnifying Person such fees and expenses
of such separate counsel as the Indemnifying Person shall have reimbursed. It is
understood that the Indemnifying Person shall not, in connection with any
litigation or proceeding or related litigation or proceedings in the same
jurisdiction as to which the Indemnified Persons are entitled to such separate
representation, be liable under this Agreement for the reasonable fees and
out-of-pocket expenses of more than one separate firm (together with not more
than one appropriate local counsel) for all such Indemnified Persons. Subject to
the next paragraph, all such fees and expenses shall be reimbursed by payment to
the Indemnified Persons of such reasonable fees and expenses of counsel promptly
after payment thereof by the Indemnified Persons.

          In furtherance of the requirement above that fees and expenses of any
separate counsel for the Indemnified Persons shall be reasonable, the Initial
Purchaser and the Company agree that the Indemnifying Person's obligations to
pay such fees and expenses shall be conditioned upon the following:

                                      -13-

<PAGE>   14

                    (i)   in case separate counsel is proposed to be retained by
          the Indemnified Persons pursuant to clause (ii) of the preceding
          paragraph, the Indemnified Persons shall in good faith fully consult
          with the Indemnifying Person in advance as to the selection of such
          counsel;

                    (ii)  reimbursable fees and expenses of such separate
          counsel shall be detailed and supported in a manner reasonably
          acceptable to the Indemnifying Person (but nothing herein shall be
          deemed to require the furnishing to the Indemnifying Person of any
          information, including without limitation, computer print-outs of
          lawyers' daily time entries, to the extent that, in the judgment of
          such counsel, furnishing such information might reasonably be expected
          to result in a waiver of any attorney-client privilege); and

                    (iii) The Company and the Initial Purchaser shall cooperate
          in monitoring and controlling the fees and expenses of separate
          counsel for Indemnified Persons for which the Indemnifying Person is
          liable hereunder, and the Indemnified Person shall use every
          reasonable effort to cause such separate counsel to minimize the
          duplication of activities as between themselves and counsel to the
          Indemnifying Person.

          The Indemnifying Person shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees, subject to the
provisions of this Section 8, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.

          (d)  If the indemnification provided for in this Section 8 above is
unavailable to or insufficient to hold harmless an Indemnified Person under this
Section 8 in respect of any losses, claims, damages or liabilities (or actions,
suits or proceedings (including governmental investigations) in respect thereof)
referred to therein, then each Indemnifying Person under this Section 8 above
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Indemnifying Person on the one hand and the Indemnified Person
on the other from the offering of the Series A Notes. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each Indemnifying Person shall contribute to such amount
paid or payable by such Indemnified Person in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in

                                      -14-

<PAGE>   15

such losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Initial Purchaser on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the total discounts or
commissions received by the Initial Purchaser, in each case as set forth in the
Offering Memorandum, bear to the aggregate offering price of the Series A Notes.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Initial Purchaser on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Initial Purchaser agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Initial Purchaser were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8(d). The amount paid
or payable by an Indemnified Person as a result of the losses, claims, damages
or liabilities (or actions, suits or proceedings (including governmental
proceedings) in respect thereof) referred to above in this Section 8(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or defending any such
action, suits or proceedings (including governmental proceedings) or claim,
provided that the provisions of this Section 8 above have been complied with (in
all material respects) in respect of any separate counsel for such Indemnified
Person. Notwithstanding the provisions of this Section 8(d), no Initial
Purchaser shall be required to contribute any amount greater than the excess of
(i) the total price at which the Series A Notes sold and distributed by it to
the public were offered to the public over (ii) the amount of any damages which
such Initial Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.

          The agreement with respect to contribution contained in this Section
8(d) shall remain in full force and effect regardless of any investigation made
by or on behalf of the Company or the Initial Purchaser, and shall survive
delivery of and payment for the Series A Notes hereunder and any termination of
this Agreement.

          9.  The respective indemnities, agreements, representations,
warranties and other statements of the Company and the Initial Purchaser, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Initial Purchaser or any controlling person of the Initial Purchaser, the
Company, or any officer, director or controlling person of the Company, and
shall survive delivery of and payment for the Notes.

          10. Conditions of Initial Purchaser's Obligations: The several
obligations of the Initial Purchaser shall be subject to the condition that all
representations and warranties and

                                      -15-

<PAGE>   16

other statements of the Company herein are, at and as of the Closing Date, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:

          (a)  That all legal proceedings to be taken in connection with the
issue and sale of the Series A Notes shall be reasonably satisfactory in form
and substance to Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York,
counsel to the Initial Purchaser.

          (b)  That, at the Closing Date, the Initial Purchaser shall be
furnished with the following opinions, dated the Closing Date:

               (i)  Opinion of Michael D. VanHemert, Esq., as special counsel to
          the Company, substantially to the effect set forth in Exhibit A to
          this Agreement; and

               (ii) Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, of New
          York, New York, counsel to the Initial Purchaser, substantially to the
          effect set forth in Exhibit B to this Agreement.

          (c)  That on the date of the Preliminary Offering Memorandum and on
the Closing Date the Initial Purchaser shall have received a letter from each of
Arthur Andersen LLP and Deloitte & Touche LLP in form and substance satisfactory
to the Initial Purchaser, dated as of such respective dates, (i) confirming that
they are independent public accountants within the meaning of the Act and the
applicable rules and regulations adopted by the Commission thereunder, (ii)
stating that in their opinion the financial statements examined by them and
included or incorporated by reference in the Offering Memorandum complied as to
form in all material respects with the applicable accounting requirements of the
Commission, including the applicable rules and regulations adopted by the
Commission, and (iii) covering, as of a date not more than three business days
prior to the date of such letter, such other matters as the Initial Purchaser
reasonably request.

          (d)  That, between the date of the execution of this Agreement and the
Closing Date, no material and adverse change shall have occurred in the
business, properties or financial condition of each of the Company and its
Subsidiaries, taken as a whole, which, in the judgment of the Initial Purchaser,
impairs the marketability of the Series A Notes (other than changes referred to
in or contemplated by the Offering Memorandum).

          (e)  That, at the Closing Date, each of the Company and Panhandle
shall have delivered to the Initial Purchaser a certificate of an executive
officer of the Company to the effect that, to the best of his or her knowledge,
information and belief, (i) there shall have been no material adverse change in
the business, properties or financial condition of the Company from that set
forth in the Offering Memorandum (other than changes referred to in or
contemplated by the Offering Memorandum); (ii) the representations and
warranties of the Company herein at and as of the Closing Date are true and
correct; and (iii) the Company has complied with all

                                      -16-

<PAGE>   17

agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Date.

          (f)  That the Company shall have executed and delivered the
Registration Rights Agreement.

          (g)  That the Company shall have performed such of its obligations
under this Agreement as are to be performed at or before the Closing Date by the
terms hereof.

          (h)  That the Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of Offering Memorandum on the
Business Day next succeeding the date of this Agreement;

          (i)  That any additional documents or agreements reasonably requested
by the Initial Purchaser or its counsel to permit the Initial Purchaser to
perform its obligations or permit its counsel to deliver opinions hereunder
shall have been provided to it.

          (j)  That between the date of the execution of this Agreement and the
Closing Date there has been no downgrading of the investment ratings of any of
the Company's securities by Standard & Poor's Ratings Group, Moody's Investors
Service, Inc. or Duff & Phelps Credit Rating Co., and the Company shall not have
been placed on "credit watch" or "credit review" with negative implications by
any of such statistical rating organizations if any of such occurrences shall,
in the judgment of the Initial Purchaser, after reasonable inquiries on the part
of the Initial Purchaser, impair the marketability of the Series A Notes.

          11. Effectiveness and Termination of Agreement; Initial Purchaser
Default:

          (a)  This Agreement shall become effective upon the execution and
delivery of this Agreement by the parties hereto.

          (b)  This Agreement may be terminated at any time prior to the Closing
Date by the Initial Purchaser if, prior to such time, any of the following
events shall have occurred: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Ex change; (ii) a suspension or
material limitation in trading in Panhandle's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the judgment of the Initial Purchaser makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Series A Notes on the terms and in the manner contemplated in the
Offering Memorandum.

          If the Initial Purchaser elects to terminate this Agreement, as
provided in this Section 11, it will promptly notify the Company by telephone or
telecopy, confirmed by letter. If this Agreement shall not be carried out by the
Initial Purchaser for any reason permitted

                                      -17-

<PAGE>   18

hereunder, or if the sale of the Securities to the Initial Purchaser as herein
contemplated shall not be carried out because either the Company is not able to
comply with the terms hereof, the Company shall not be under any obligation
under this Agreement and shall not be liable to the Initial Purchaser for the
loss of anticipated profits from the transactions contemplated by this Agreement
and the Initial Purchaser shall be under no liability to the Company.

          (d)  Notwithstanding the foregoing, the provisions of Sections 5(e),
5(i), 8 and 9 shall survive any termination of this Agreement.

          12. Miscellaneous: Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to c/o Panhandle
Eastern Pipe Line Company, 5444 Westheimer Court, Houston, Texas 77056,
Attention: Corporate Secretary, and (ii) if to the Initial Purchaser, to
Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York,
New York 10172, Attn: Mike Ranger (212) 892-7272, or in any case to such other
address as the person to be notified may have requested in writing.

          Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Initial
Purchaser, the Initial Purchaser's directors and officers, any controlling
persons referred to herein, and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Series A Notes from an
Initial Purchaser merely because of such purchase.

          This Agreement shall be governed and construed in accordance with the
laws of the State of New York.

          This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.

                                      -18-

<PAGE>   19

          Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Initial Purchaser.

                                        Very truly yours,

                                        PANHANDLE EASTERN PIPE LINE
                                        COMPANY

                                        By: /s/ Alan M. Wright
                                           ------------------------------------
                                             Name:  Alan M. Wright
                                             Title: Senior Vice President,
                                                    Chief Financial Officer, and
                                                    Treasurer

Accepted:  March 22,  2000

DONALDSON, LUFKIN & JENRETTE
    SECURITIES CORPORATION

 By: /s/ Gavin H. Wolfe
    ------------------------------------
    Name: Gavin H. Wolfe
    Title: Senior Vice President

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