EXHIBIT 1.2
EL PASO NATURAL GAS COMPANY
(A DELAWARE CORPORATION)
(TITLE OF SECURITIES)
TERMS AGREEMENT
Dated: [ ], 199[ ]
El Paso Natural Gas Company
000 Xxxxx Xxxxxxx Xxxxxx
Xx Xxxx, Xxxxx 00000
Dear Sirs:
We (the "Representative(s)") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or
underwriters being herein called the "Underwriters"), and we understand that
El Paso Natural Gas Company, a Delaware corporation (the "Company"), proposes
to issue and sell the number of shares of its (Common Stock, $3.00 par value
(the "Common Stock")) (Preferred Stock, $.01 par value (the "Preferred
Stock")) (such (Common Stock) (Preferred Stock) (collectively) hereinafter
(also) referred to as the "Underwritten Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective number of shares of
Initial Underwritten Securities (as defined in the Underwriting Agreement--
Basic Provisions referenced below) set forth opposite their respective names,
and a proportionate share of Option Securities (as defined in the Underwriting
Agreement--Basic Provisions referenced below) to the extent any are purchased,
at the purchase price set forth below.
NUMBER OF SHARES OF
UNDERWRITERS INITIAL UNDERWRITTEN SECURITIES
------------ -------------------------------
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The Underwritten Securities shall have the terms set forth in the Prospectus
dated [ ], 199[ ], and the Prospectus Supplement dated [
], 199[ ], including the following:
Title:
Number of Shares:
[Dividend Rate: $[ ] [ %]. Payable: ]
[Stated Value:]
[Ranking:]
Public Offering Price Per Share: $[ ] [, plus accumulated dividends, if any,
from [ ], 19 [ ].
Purchase Price Per Share: $[ ] [, plus accumulated dividends, if any, from
[ ], 19 [ ].]
[Conversion Provisions:]
[Redemption Provisions:]
[Sinking Fund Requirements:]
Number of Option Securities, if any, that may be purchased by the
Underwriters:
Other Terms:
Closing Date and Location:
All provisions contained in the document attached as Annex A hereto entitled
"El Paso Natural Gas Company--Common Stock ($3.00 par value) and Preferred
Stock ($.01 par value)--Underwriting Agreement Standard Provisions," are
hereby incorporated by reference in their entirety and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein. Terms defined in such document are used herein as
therein defined.
Please confirm your agreement by having an authorized officer sign a copy of
this Terms Agreement in the space set forth below.
Very truly yours,
(Name(s) of Representative(s))
Acting severally on behalf of
(itself) (themselves) and the
several Underwriters named herein
By: (Name of Lead-Representative)
By: _________________________________
Name:
Title:
Accepted:
El Paso Natural Gas Company
By: _________________________________
Name:
Title:
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Annex A
EL PASO NATURAL GAS COMPANY
(A DELAWARE CORPORATION)
COMMON STOCK ($3.00 PAR VALUE)
AND
PREFERRED STOCK ($.01 PAR VALUE)
UNDERWRITING AGREEMENT STANDARD PROVISIONS
El Paso Natural Gas Company, a Delaware corporation (the "Company") proposes
to issue and sell shares of Common Stock, $3.00 par value (the "Common
Stock"), or Preferred Stock, $.01 par value (the "Preferred Shares"), or both,
from time to time in one or more offerings on terms determined at the time of
sale. The Common Stock and the Preferred Shares are hereinafter referred to as
the "Securities." Each issue of Preferred Shares may vary as to the specific
number of shares, title, stated value and liquidation preference, issuance
price, ranking, dividend rate or rates (or method of calculation), dividend
payment dates, any redemption or sinking fund requirements, any conversion
provisions and any other variable terms as set forth in the applicable
certificate of designation (each, a "Certificate of Designation") relating to
such Preferred Shares.
This is to confirm the arrangements with respect to the purchase of the
Underwritten Securities (as defined in Section 2 hereof) from the Company by
the Representative(s) and the several Underwriters listed in the applicable
terms agreement entered into between the Representative(s) and the Company of
which this Underwriting Agreement is Annex A thereto (the "Terms Agreement").
Terms defined in the Terms Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-14617) in respect
of the Securities and the Company's debt securities, which registration
statement also constitutes a post-effective amendment to registration
statement No. 33-44327 relating to the Company's debt securities and a post-
effective amendment to Registration Statement No. 33-55153, and has filed such
amendments thereto as may have been required to the date of the Terms
Agreement. Such registration statement and such post-effective amendments, as
amended, have been declared effective by the Commission. Such registration
statement and such post-effective amendments, as amended, including all
documents incorporated therein by reference, as from time to time amended or
supplemented pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Securities Act of 1933, as amended (the "Securities
Act"), or otherwise, and any registration statement filed pursuant to Rule
462(b) under the Securities Act are herein collectively referred to as the
"Registration Statement". Such combined prospectus constituting a part of the
Registration Statement and any prospectus subject to completion taken together
with any term sheet meeting the requirements of Rule 434(b) under the
Securities Act, as applicable, are collectively referred to herein as the
"Prospectus"; provided, however, that a supplement to the Prospectus
contemplated by Section 3(a) hereof (a "Prospectus Supplement") shall be
deemed to have supplemented the Prospectus only with respect to the offering
of Underwritten Securities to which it relates.
1. Representations and Warranties. The Company represents and warrants to
each of the Underwriters named in the Terms Agreement that:
(a) The Registration Statement has become effective under the Securities
Act, no stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose are pending
before or, to the best of the Company's knowledge, contemplated by the
Commission.
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(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder; (ii)
each part of the Registration Statement, when such part became effective,
did not contain, and each such part, as amended or supplemented, if
applicable, will not contain, any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (iii) the Registration
Statement and the Prospectus comply, and, as amended or supplemented, if
applicable, will comply, in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder; and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section
1(b) do not apply to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representative(s) expressly for use in the Registration Statement or
Prospectus.
(c) The Company has been duly incorporated and is validly existing in
good standing under the laws of the State of Delaware, has the corporate
power and authority to own its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or to be in good standing would not have a material adverse
effect on the assets, business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect").
(d) Each significant subsidiary of the Company within the meaning of
Regulation S-K (each hereinafter referred to as a "Subsidiary") has been
duly incorporated and is a corporation duly organized, validly existing in
good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
Material Adverse Effect.
(e) The authorized, issued and outstanding capital stock of the Company
is as set forth under "[ ]" and is accurate as of the date indicated in
such section.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) All the outstanding shares of capital stock of the Company have been
duly authorized and are validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights; the Underwritten
Securities being sold pursuant to a Terms Agreement have, as of the date of
such Terms Agreement, been duly authorized by the Company and such
Underwritten Securities have been duly authorized for issuance and sale
pursuant to this Agreement (or will have been so authorized prior to each
issuance of Underwritten Securities) and such Underwritten Securities, when
issued and delivered by the Company pursuant to this Agreement, against
payment of the consideration set forth in this Agreement, will be validly
issued, fully paid and nonassessable; the Underwritten Securities being
sold pursuant to a Terms Agreement conform in all material respects to all
statements relating thereto contained in the Prospectus; and the issuance
of the Underwritten Securities is not subject to any preemptive or other
similar rights.
(h) Neither the Company nor any of its Subsidiaries are (i) in violation
of their respective charters or by-laws or (ii) in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any other
agreement, indenture or instrument to the conduct of the business of the
Company or any Subsidiaries, taken as a whole, to which the Company or any
Subsidiaries is a party or by which the Company or any of its Subsidiaries
or their respective property is bound, except, in the case of (ii) for such
violations or defaults as would not, individually or in the aggregate, have
a Material Adverse Effect.
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(i) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement will not violate (i)
the Restated Certificate of Incorporation, as amended, or By-laws of the
Company, (ii) any provision of applicable law, (iii) any agreement or other
instrument binding upon the Company or any Subsidiaries or (iv) any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any Subsidiary, except, in the case of
clauses (ii) through (iv), inclusive, for such violations as would not,
individually or in the aggregate, have a Material Adverse Effect. No
consent, approval, authorization or order of or qualification with any U.S.
governmental body or agency is required for the performance by the Company
of its obligations under this Agreement, except (x) such as may be required
by the securities or Blue Sky laws of the various states in connection with
the offer and sale of the Underwritten Securities, or as (y) where the
failure to obtain such consent, approval, authorization, order or
qualification would not, individually or in the aggregate, have a Material
Adverse Effect or materially adversely affect the offering of the
Underwritten Securities as contemplated in the Prospectus Supplement.
(j) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be
stated in or contemplated by the Registration Statement and Prospectus,
there has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the assets, business,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(k) If applicable, the shares of Common Stock issuable upon conversion of
any issue of Preferred Shares have been duly authorized and reserved for
issuance upon the conversion by all necessary corporate action and when
issued upon conversion, will be validly issued, fully paid and
nonassessable, and the issuance of such shares upon such conversion will
not be subject to preemptive rights.
(l) Other than as set forth or incorporated by reference in the
Registration Statement and Prospectus, there are no legal or governmental
proceedings instituted or, to the best of the Company's knowledge,
threatened against the Company or any Subsidiaries which would restrict the
issuance and sale of the Underwritten Securities as contemplated by the
Prospectus or which are required under the Securities Act to be disclosed
therein and which are not disclosed. No contract or document of a character
required under the Securities Act to be described in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement is not described or filed as required.
(m) The financial statements, together with related schedules and notes
forming part of the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly in all material respects
the consolidated financial position, results of operations and changes in
financial position of the Company and its consolidated subsidiaries on the
basis stated in the Registration Statement at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and
statistical information and data of the Company (including any pro forma
financial information) set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) is, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(n) The Company is not, nor is it directly or indirectly controlled by or
acting on behalf of any person which is, (i) an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations promulgated by the Commission thereunder, or (ii) a
"holding company" within the meaning of, or subject to regulation under,
the Public Utility Holding Company Act of 1935, as amended, and the rules
and regulations promulgated by the Commission thereunder.
(o) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
2. Purchase and Sale. The obligations of the Underwriters to purchase, and
the Company to sell, the Underwritten Securities shall be evidenced by the
Terms Agreement. The Terms Agreement shall specify the number of Underwritten
Securities to be initially issued (the "Initial Underwritten Securities"), the
names of the
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Underwriters participating in such offering (subject to substitution as
provided in Section 8 hereof), the number of Initial Underwritten Securities
which each such Underwriter severally agrees to purchase, the price at which
the Initial Underwritten Securities are to be purchased by the Underwriters
from the Company, the initial public offering price, the time and place of
delivery and payment, any delayed delivery arrangements and any other terms of
the Initial Underwritten Securities pursuant to which they are being issued
(including, but not limited to, designations, conversion provisions,
redemption provisions and sinking fund requirements). In addition, each Terms
Agreement shall specify whether the Company has agreed to grant to the
Underwriters an option to purchase additional Underwritten Securities subject
to such option (the "Option Securities"). As used herein, the term
Underwritten Securities shall include the Initial Underwritten Securities and
all or any portion of the Option Securities agreed to be purchased by the
Underwriters as provided herein, if any.
The several commitments of the Underwriters to purchase Underwritten
Securities pursuant to the Terms Agreement shall be deemed to have been made
on the basis of the representations and warranties herein contained and shall
be subject to the terms and conditions herein set forth.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the Terms Agreement relating to any
Initial Underwritten Securities, an option to the Underwriters, named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at the same price per share as is
applicable to the Initial Underwritten Securities. Such option, if granted,
will expire 30 days or such lesser number of days as may be specified in the
Terms Agreement after the Closing Time (as hereinafter defined) relating to
the Initial Underwritten Securities, and may be exercised in whole or in part
from time to time only for the purchase of covering over-allotments which may
be made in connection with the offering and distribution of the Initial
Underwritten Securities upon notice by the Representative(s) to the Company
setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment
and delivery for such Option Securities. Any such time and date of delivery (a
"Date of Delivery") shall be determined by the Representative(s), but shall
not be later than ten full business days and not earlier than two full
business days after the exercise of said option, unless otherwise agreed upon
by the Representative(s) and the Company. If the option is exercised as to all
or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number
of Option Securities then being purchased which the number of Initial
Underwritten Securities each such Underwriter has agreed to purchase as set
forth in the related Terms Agreement bears to the total number of Initial
Underwritten Securities, subject to such adjustments as the Representative(s)
in (your) (their) discretion shall make to eliminate any sales or purchases of
fractional shares.
Payment of the purchase price for, and delivery of, any Initial Underwritten
Securities to be purchased by the Underwriters shall be made at the office of
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or at such other place as shall be agreed upon by the
Representative(s) and the Company, at (9:00) A.M., New York City time, on the
third or fourth business day (unless otherwise permitted by the Commission
pursuant to Rule 15e6-1 of the Exchange Act or postponed in accordance with
the provisions of Section 8) following the date of the Terms Agreement or such
other time as shall be agreed upon by the Representative(s) and the Company
(each such time and date being referred to as a "Closing Time"). In addition,
in the event that any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates
representing, such Option Securities, shall be made at the above-mentioned
office of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, or at such other place as
shall be agreed upon by the Representative(s) to the Company. Payment shall be
made to the Company by wire transfer of immediately available (same-day)
funds, against delivery to the Representative(s) for the respective accounts
of the Underwriters of the Underwritten Securities to be purchased by them.
Certificates for such Underwritten Securities shall be in such denominations
and registered in such names as the Representative(s) may request in writing
at least two business days prior to the applicable Closing Time or Date of
Delivery, as the case may be. Such certificates or receipts will be made
available for examination and packaging by the Representative(s) on or before
the first business day prior to Closing Time or Date of Delivery, as the case
may be.
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The Company hereby agrees and the Company shall, concurrently with the
execution of this Agreement, deliver an agreement executed by (i) each of the
directors and executive officers of the Company, and (ii) each five percent or
greater stockholder identified to the Company by the Representative(s)
pursuant to which each such person agrees, not to offer, sell, contract to
sell, grant any option to purchase, or otherwise dispose of any common stock
of the Company or any securities convertible into or exercisable or
exchangeable for such common stock or in any other manner transfer all or a
portion of the economic consequences associated with the ownership of any such
common stock, except to the Underwriters pursuant to this Agreement, for a
period of [ ] days after the date of the Prospectus without the prior
written consent of the Representative(s). Notwithstanding the foregoing,
during such period (i) the Company may grant stock options pursuant to the
Company's existing stock option plan and (ii) the Company may issue shares of
its common stock upon the exercise of an option or warrant or the conversion
of a security outstanding on the date hereof.
3. Covenants of the Company. In further consideration of the agreements of
the Underwriters contained herein, the Company covenants as follows:
(a) Immediately following the execution of the Terms Agreement, the
Company will prepare a Prospectus Supplement setting forth the number of
Underwritten Securities covered thereby and their terms not otherwise set
forth in the Prospectus, the names of the Underwriters participating in the
offering and the number of Underwritten Securities which each severally has
a agreed to purchase, the price at which the Underwritten Securities are to
be purchased by the Underwriters from the Company, the initial public
offering price, the selling concession and reallowance, if any, any delayed
delivery arrangements, and such other information as the Representative(s)
and the Company deem appropriate in connection with the offering of the
Underwritten Securities. The Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424 of
the Securities Act and will furnish to the Underwriters named therein as
many copies of the Prospectus and such Prospectus Supplement as the
Representative(s) shall reasonably request.
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(b) To furnish to the Representative(s), without charge, one signed copy
of the Registration Statement (including exhibits thereto) and for delivery
to each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto or to the
Registration Statement as the Representative(s) may reasonably request.
(c) At any time when the Prospectus is required by the Securities Act to
be delivered in connection with sales of the Underwritten Securities, the
Company will give the Representative(s) notice of its intention to file any
amendment to the Registration Statement or any amendment or supplement to
the Prospectus (including any term sheet within the meaning of Rule 434
under the Securities Act), whether pursuant to the Securities Act, the
Exchange Act or otherwise, and will furnish the Representative(s) with
copies of each such proposed amendment or supplement or other documents
proposed to be filed a reasonable time in advance of filing.
(d) To advise the Representative(s) promptly and, if requested by the
Representative(s), to confirm such advice in writing, (i) of any request by
the Commission for amendments to the Registration Statement or amendments
or supplements to the Prospectus or for additional information, (ii) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the suspension of qualification of the
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purposes, and (iii) of the happening of any event
during the period referred to in paragraph (c) above which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement in order to make the statements
therein not misleading or the Prospectus in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company
will make every reasonable effort to obtain the withdrawal or lifting of
such order at the earliest possible time.
(e) If, at any time when the Prospectus is required by the Securities Act
to be delivered in connection with sales of any of the Underwritten
Securities, any event shall occur or condition exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or counsel
for the Company, to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances under which they were
made when the Prospectus is delivered to a purchaser, not misleading, or
if, in the opinion of either such counsel, it is necessary to amend or
supplement the Prospectus to comply with the U.S. laws, [and if
appropriate, foreign laws], the Company will promptly prepare and file with
the Commission and furnish, at its own expense, to the Underwriters, and to
the dealers (whose names and addresses the Representative(s) will furnish
to the Company) to which Underwritten Securities may have been sold by the
Representative(s) on behalf of the Underwriters and to any other dealer
upon request, either amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances under which they were made when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as so amended or supplemented, will comply with such U.S. laws
[and if appropriate, foreign laws].
(f) The Company will endeavor in good faith to qualify the Underwritten
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representative(s) shall reasonably request; provided,
however, that the Company shall not be obligated to file any general
consent to service or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will maintain
such qualification in effect for so long as may be required for the
distribution of the Underwritten Securities. The Company will file such
statements and reports as may be required by the laws of each jurisdiction
in which the Underwritten Securities have been qualified as above provided.
(g) With respect to each sale of Underwritten Securities, the Company
will make generally available to its security holders as soon as
practicable an earnings statement, which shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission
thereunder.
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(h) Unless otherwise provided in the Terms Agreement, between the date of
the Terms Agreement and the later of termination of any trading
restrictions and the Closing Time or Date of Delivery, as the case may be,
with respect to the Underwritten Securities covered thereby (it being
understood that the Representative(s) promptly will notify the Company as
to the termination of trading restrictions on such Underwritten
Securities), the Company will not without the Representative(s') prior
consent, offer to sell, or enter into any agreement to sell, any Securities
of the same class or series or ranking on a parity with such Underwritten
Securities or, if such Terms Agreement relates to Underwritten Securities
that are convertible into Common Stock, any Common Stock or any security
convertible into Common Stock (except for Common Stock issued pursuant to
reservations or agreements, pursuant to any employee stock option plan,
stock ownership plan or dividend reinvestment plan).
(i) To use its reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Time and to satisfy all conditions precedent
to the delivery of the Securities.
4. Conditions to Closing. The several obligations of the Underwriters to
purchase Underwritten Securities pursuant to the Terms Agreement are subject
to the following conditions:
(a) All representations and warranties of the Company contained in this
Agreement shall be true and correct at the applicable Closing Time with the
same force and effect as if made on and as of such Closing Time.
(b) As of the applicable Closing Time, there shall not have been, since
the date of the Terms Agreement or since the respective dates as of which
information is given in the Registration Statement and the Prospectus, as
amended and supplemented,
(i) any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change, in
the rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization", as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) any change, or any development involving a prospective change,
in the assets, business, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus, as amended or supplemented as of such time,
that, in the reasonable judgment of the Representative(s), is material
and adverse and that makes it, in the reasonable judgment of the
Representative(s), impracticable to market the Underwritten Securities
on the terms and in the manner contemplated in the Prospectus as so
amended or supplemented.
(c) The Representative(s) shall have received at the Closing Time a
certificate, dated the applicable Closing Time and signed by an executive
officer of the Company, to the effect set forth in clauses (b)(i) and (ii)
above and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct at the applicable
Closing Time and that the Company has complied in all material respects
with all of the agreements and satisfied all of the conditions on its part
to be performed or satisfied on or before the applicable Closing Time. The
officer signing and delivering such certificate may rely upon the best of
his knowledge with respect to Section 1(a) and 1(l) as to proceedings
contemplated or threatened.
(d) The Representative(s) shall have received at the Closing Time (i) an
opinion of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, special counsel to the
Company, addressing the matters set forth in Exhibit A attached hereto and
(ii) an opinion of the (General Counsel)(Associate General Counsel) of the
Company, addressing the matters set forth in Exhibit B attached hereto.
(e) The Representative(s) shall have received at the applicable Closing
Time an opinion of ( ), special counsel for the Underwriters, dated the
applicable Closing Time, with respect to all such matters as the
Representative(s) may reasonably request.
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(f) The Representative(s) shall have received on the date of the Terms
Agreement and as of the applicable Closing Time a letter, dated such date,
in form and substance satisfactory to the Representative(s), from
independent accountants for the Company, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus.
(g) In the event the Underwriters exercise their option provided in a
Terms Agreement as set forth in Section 2 hereof to purchase all or any
portion of the Option Securities, the Representative(s) shall have
received:
(1) A certificate, dated such Date of Delivery, signed by an
executive officer of the Company, confirming that the certificate
delivered at Closing Time pursuant to Section 4(c) hereof remains true
and correct as of such Date of Delivery.
(2) An opinion of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, in form
and substance satisfactory to the Representative(s), dated such Date of
Delivery, relating to the Option Securities and otherwise substantially
to the same effect as the opinion required by Section 4(d)(i) hereof.
(3) An opinion of the (General Counsel)(Associate General Counsel) of
the Company, in form and substance satisfactory to the
Representative(s), dated such Date of Delivery, relating to the Option
Securities and otherwise substantially to the same effect as the
opinion required by Section 4(d)(ii).
(4) An opinion of ( ), counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise
substantially to the same effect as the opinion required by Section
4(e) hereof.
(5) A letter from the Company's independent accountants in form and
substance satisfactory to the Representative(s) and dated the Date of
Delivery, substantially the same in scope and substance as the letter
furnished to the Representative(s) pursuant to Section 4(f) hereof on
the applicable Closing Time.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representative(s) by notice to the Company at any time at or prior to the
applicable Closing Time, and such termination shall be without any liability
of any party to any other party except as provided in Section 5.
5. Payment of Expenses. The Company will pay all expenses, fees and taxes
incident to the performance of its obligations under the Terms Agreement
(which incorporates by reference this Underwriting Agreement), including,
without limitation, (i) the preparation and filing of the Registration
Statement and the Prospectus and all amendments and supplements thereto, and
the reproduction of this Agreement, (ii) the preparation, issuance and
delivery of the Underwritten Securities to the Underwriters, (iii) the fees
and disbursements of the Company's counsel and accountants, (iv) the
qualifications of the Underwritten Securities under securities laws in
accordance with the provisions of Section 3(f), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of any Blue Sky Surveys and Legal
Investment Surveys, (v) the printing and delivery to the Underwriters in
quantities as hereinabove stated of copies of the Registration Statement and
any amendments thereto, and of the Prospectus and any amendment or supplement
thereto, (vi) the reproduction and delivery to the Underwriters of copies of
the Certificate of Designation and any Blue Sky Surveys and Legal Investment
Surveys, (vii) the fees, if any, charged by rating agencies for rating the
Underwritten Securities, (viii) the fees and expenses, if any, incurred in
connection with the listing of the Underwritten Securities and, in the case of
Preferred Shares convertible into Common Stock, Common Stock issuable upon
such conversion, on any national securities exchange, and (ix) the fees and
expenses, if any, relating to clearance with the National Association of
Securities Dealers, Inc.
8
6. Indemnification and Contribution. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Underwriter or any such controlling person
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information furnished to the Company in writing by any Underwriter through the
Representative(s) expressly for use therein. The foregoing indemnity with
respect to any preliminary prospectus or any Prospectus that is supplemented
or amended shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such loss,
claim, damage or liability purchased the Underwritten Securities which are the
subject thereof if such Underwriter in a timely manner received a copy of such
Prospectus (or such Prospectus as so amended or supplemented), and a copy of
the Prospectus (or the Prospectus as amended or supplemented), excluding
documents incorporated therein by reference, was not sent or given by or on
behalf of such Underwriter to such person, at or prior to the confirmation of
the sale of such Underwritten Securities to such person in any case where
delivery of a Prospectus (or an amended or supplemented Prospectus) at or
prior to the written confirmation of the sale of the Underwritten Securities
is required by the Securities Act and the untrue statement or omission or the
alleged untrue statement or omission was corrected in the Prospectus (or the
Prospectus as amended or supplemented).
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably
incurred by the Company, its directors, such officers or any such controlling
person in connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, but only with
reference to information relating to such Underwriter furnished to the Company
by such Underwriter in writing through the Representative(s) expressly for use
in the Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto.
Promptly after receipt by an indemnified party under the first or second
paragraph in this Section 6 of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under this Section. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall
pay the reasonable expenses of legal counsel to the indemnified party as
incurred and shall be entitled to participate therein and, to the extent that
it shall wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation, and the indemnifying party shall not be
9
responsible for the cost of more than one counsel for all indemnified parties
(excluding any necessary local counsel) in connection with any actions arising
from the same facts. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim, and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
If the indemnification provided for in the first or second paragraph in this
Section 6 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Underwritten Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Underwritten
Securities shall be deemed to be in the same respective proportions as the net
proceeds from the offering of such Underwritten Securities (before deducting
expenses) received by the Company and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus Supplement, bear to the aggregate public
offering price of the Underwritten Securities. The relative fault of the
Company on the one hand and of the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this
Section 6 are several in proportion to the respective principal amounts of
Offered Securities purchased by each of such Underwriters and not joint.
The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Underwritten Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 6 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
The indemnity and contribution provisions contained in this Section 6 and
the representations and warranties of the Company contained herein or made
pursuant hereto shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or
on behalf of the Company, its directors or
10
officers or any person controlling the Company and (iii) acceptance of and
payment for any of the Underwritten Securities.
7. Termination. This Agreement may be terminated, upon written notice given
by the Representative(s) to the Company, at any time prior to the applicable
Closing Time, if (a) after the execution and delivery of the Terms Agreement
and prior to the Closing Time (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except
as may otherwise be stated in or contemplated by the Registration Statement
and the Prospectus, any material adverse change, or any development involving
a prospective material adverse change, in the assets, business, financial
condition or results of operations of the Company and its subsidiaries taken
as a whole occurs, (ii) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange or the NASDAQ National Market (iii)
trading of any securities of the Company shall have been suspended on any
national securities exchange or on the NASDAQ National Market, (iv) a general
moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (v) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the reasonable judgment
of the Representative(s), is material and adverse, and (b) in the case of any
of the events specified in clauses (a)(i) through (v), such event, singly or
together with any other such event, makes it, in the reasonable judgment of
the Representative(s), impracticable to market the Underwritten Securities on
the terms and in the manner contemplated by the Prospectus and the Prospectus
Supplement, as such may be amended or supplemented.
8. Defaulting Underwriters. If one or more of the Underwriters participating
in an offering of Underwritten Securities shall fail or refuse at the
applicable Closing Time to purchase the Initial Underwritten Securities which
it or they are obligated to purchase under the applicable Terms Agreement (the
"Defaulted Securities"), and the number of Defaulted Securities is not more
than one-tenth of the number of Initial Underwritten Securities to be
purchased pursuant to the Terms Agreement, the non-defaulting Underwriters
named in such Terms Agreement shall be obligated severally in the proportions
that the amount of Initial Underwritten Securities set forth opposite their
respective names above bears to the number of Initial Underwritten Securities
set forth opposite the names of all such non-defaulting Underwriters, or in
such other proportions as the Representative(s) may specify, to purchase the
Initial Underwritten Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Initial Underwritten Securities that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 8 by an amount in excess of (one-ninth) of such
amount of Initial Underwritten Securities without the written consent of such
Underwriter. If, at the applicable Closing Time any Underwriter or
Underwriters shall fail or refuse to purchase Initial Underwritten Securities
and the number of Initial Underwritten Securities with respect to which such
default occurs is more than one-tenth of the number of Initial Underwritten
Securities to be purchased pursuant to such Terms Agreement, and arrangements
satisfactory to the Representative(s) and the Company for the purchase of such
Initial Underwritten Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either the
Representative(s) or the Company shall have the right to postpone the Closing
Time but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering of the Underwritten Securities.
11
9. Parties. This Agreement shall inure to the benefit of and be binding upon
the Company and any Underwriter who becomes a party hereto, and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto or thereto and their respective successors and the
controlling persons and officers and directors referred to in Section 6 and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties and their respective successors
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
10. Counterparts. The Underwriting Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
13. Notices. All references herein and in the Underwriting Agreement to the
Representative(s) when made in connection with any notice to or communication
by or with such Representative(s) shall, if there is more than one
representative, be deemed to be to the Lead Representative, as designated in
the Terms Agreement, and all notices shall be given to such Lead
Representative at the address set forth therein.
12
Exhibit A
Opinion of [ ] Counsel for the Company
The opinion of counsel for the Company to be delivered pursuant to Section
4(d) of the Underwriting Agreement shall be to the effect that:
(i) the Registration Statement has become effective under the Securities
Act and, to the best knowledge of such counsel, no stop order suspending
its effectiveness of the Registration Statement is in effect and no
proceedings for that purpose are pending before or, to such counsel's
knowledge, contemplated by the Commission;
(ii) the Underwriting Agreement and the Delayed Delivery Contracts, if
any, have been duly authorized, executed and delivered by the Company;
(iii) the Underwritten Securities have been duly authorized, executed,
issued and delivered and are fully paid and nonassessable, and the issuance
of the Underwritten Securities is not subject to any preemptive or similar
rights;
(iv) if any of the Underwritten Securities are convertible into shares of
Common Stock, the shares of Common Stock issuable upon conversion thereof
have been duly authorized and reserved for issuance upon such conversion
and, when issued upon such conversion, will be validly issued, fully paid
and nonassessable, and the issuance of such shares upon such conversion
will not be subject to any preemptive or similar rights;
(v) the execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Underwriting Agreement will not
violate any provision of applicable law or the Restated Certificate of
Incorporation, as amended, or By-laws of the Company;
(vi) no consent, approval, authorization or order of or qualification
with any United States federal, New York or (with respect to matters
arising under the Delaware General Corporation Law) Delaware body or agency
is required for the performance by the Company of its obligations under the
Underwriting Agreement, the Indenture or the Underwritten Securities,
except such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Underwritten
Securities or except where failure to obtain such consent, approval,
authorization, order or qualification would not, individually or in the
aggregate, have a Material Adverse Effect;
(vii) the statements (A) in the Prospectus Supplement under the caption
"( )" and in the Basic Prospectus under the caption "Description of
Capital Stock" and (B) in the Registration Statement under Item 15, insofar
as such statements constitute a summary of the legal matters referred to
therein, fairly present the information disclosed therein in all material
respects;
(viii) the Company is not (A) an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, and the rules and
regulations promulgated by the Commission thereunder, or (B) a "holding
company" within the meaning of, or subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended, and the rules and
regulations promulgated by the Commission thereunder;
(ix) such counsel is of the opinion that (A) each document, if any, filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus (except for financial statements and schedules and other
financial or statistical data included therein as to which such counsel
need not express any opinion) complied when so filed as to form in all
material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, and (B) the Registration
Statement and Prospectus (except for financial statements and schedules and
other financial or statistical data included therein as to which such
counsel need not express any opinion) comply as to form in all material
respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder.
A-1
In addition, such counsel shall state that in the course of the preparation
by the Company of the Registration Statement, the Prospectus and the
Prospectus Supplement, such counsel participated in conferences with certain
of the officers and representatives of the Company and the Company's
independent accountants, at which the Registration Statement, the Prospectus
and the Prospectus Supplement were discussed. Given the limitations inherent
in the independent verification of factual matters and the character of
determinations involved in the registration process, such counsel does not
pass upon and need not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Prospectus or the Prospectus Supplement, except as specifically
described in the opinion in paragraph (vii) above. Subject to the foregoing
and on the basis of the information such counsel gained in the performance of
the services referred to above, including information obtained from officers
and other representatives of the Company and the Company's independent
accountants, such counsel shall state that no facts have come to such
counsel's attention that have caused it to believe that the Registration
Statement, at the time it became effective [or at the time an Annual Report on
Form 10-K was filed (whichever is later)], contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading or
that the Prospectus and any Prospectus Supplement, as of their respective
dates [and at the date hereof], included or includes, as the case may be, any
untrue statement of a material fact or omitted or omits, as the case may be,
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Such
counsel need express no view or belief, however, with respect to (i) financial
statements, schedules or notes thereto or other financial and statistical data
included in or omitted from the Registration Statement or Prospectuses or any
Prospectus Supplement or (ii) any part of the Registration Statement.
With respect to the preceding paragraph, Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx may state that (A) their opinion and belief is based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification, except as
specified, (B) no opinion or belief is being expressed with respect to Tenneco
Inc. and its businesses other than Tenneco Energy, [and (C) no opinion or
belief is being expressed with respect to documents incorporated by reference
in the Registration Statement and Prospectus].
A-2
Exhibit B
Opinion of ( ), (General Counsel) (Associate General
Counsel) of the Company
The opinion of ( ), general counsel of the
Company, to be delivered pursuant to Section 4(d) of the Underwriting
Agreement shall be to the effect that:
(i) the Company has been duly incorporated and is validly existing in
good standing under the laws of the State of Delaware;
(ii) (A) the Company has the corporate power and authority to own its
properties and to conduct its business as described in the Prospectus, as
amended or supplemented, and (B) the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or to be in good standing would not have a
Material Adverse Effect;
(iii) each Subsidiary of the Company has been duly incorporated and is a
corporation duly organized, validly existing in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its properties and to conduct its business as described in
the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a Material Adverse Effect;
(iv) the execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Underwriting Agreement will not
violate, to the best of such counsel's knowledge, (A) any agreement or
other instrument binding upon the Company or any Subsidiaries, or (B) to
the best of such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any Subsidiary except, in each case, for such violations as would not,
individually or in the aggregate, have a Material Adverse Effect;
(v) after due inquiry, such counsel does not know of any legal or
governmental proceedings instituted or threatened against the Company or
any of its subsidiaries which would restrict the issuance and sale of the
Underwritten Securities as contemplated by the Prospectus, or would be
required to be disclosed therein and which is not disclosed; also, such
counsel does not know of any statutes, regulations, contracts or other
documents which are required to be summarized in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as exhibits
to the Registration Statement which are not summarized, filed or
incorporated as required;
(vi) the statements under the caption (A) "Item 3--Legal Proceedings" of
the Company's most recent annual report on Form 10-K incorporated by
reference into the Prospectus and (B) "Item 1--Legal Proceedings" of Part
II of the Company's quarterly reports on Form 10-Q, if any, filed since
such annual report, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information disclosed therein in all material
respects; and
(vii) such counsel is of the opinion that (A) each document, if any,
filed pursuant to the Exchange Act and incorporated by reference in the
Prospectus (except for financial statements and schedules and other
financial or statistical data included therein as to which such counsel
need not express any opinion) complied when so filed as to form in all
material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, and (B) the Registration
Statement and Prospectus (except for financial statements and schedules and
other financial or statistical data included therein as to which such
counsel need not express any opinion) comply as to form in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder.
Such counsel may rely, to the extent their opinions are based upon matters
governed by the laws of other jurisdictions, upon the opinion of other counsel
admitted to the bar in such jurisdictions.
B-1
With respect to the preceding paragraph, such counsel may state that no
opinion or belief is being expressed with respect to Tenneco Inc. and its
businesses other than Tenneco Energy.
In addition, such counsel shall state that in the course of the preparation
by the Company of the Registration Statement, the Prospectus and the
Prospectus Supplement, such counsel participated in conferences with certain
of the officers and representatives of the Company, counsel to the Company and
the Company's independent accountants, at which the Registration Statement,
the Prospectus and the Prospectus Supplement were discussed. Given the
limitations inherent in the independent verification of factual matters and
the character of determinations involved in the registration process, such
counsel does not pass upon and need not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Prospectus or the Prospectus Supplement, except as
specifically described in paragraph (vii) above. Subject to the foregoing and
on the basis of the information such counsel gained in the performance of the
services referred to above and in the performance of his duties as (General
Counsel) (Associate General Counsel) of the Company as well as information
obtained from officers and other representatives of the Company, such counsel
shall state that no facts have come to such counsel's attention that have
caused him to believe that the Registration Statement, at the time it became
effective [or at the time an Annual Report on Form 10-K was filed (whichever
is later)], contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading or that the Prospectus and any
Prospectus Supplement, as of their respective dates [and at the date hereof],
included or includes, as the case may be, any untrue statement of a material
fact or omitted or omits, as the case may be, to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Such counsel need
express no view or belief, however, with respect to (i) financial statements,
schedules or notes thereto or other financial data included in or omitted from
the Registration Statement or Prospectuses or any Prospectus Supplement or
(ii) any part of the Registration Statement.
B-2
