EXHIBIT 2.C
AGREEMENT
Agreement (this "Agreement") dated June 19, 1996, between Tenneco Inc., a
Delaware corporation ("Tenneco"), and El Paso Natural Gas Company, a Delaware
corporation ("Consultant").
1. Consulting Services. During the term of this paragraph, Consultant will
consult and provide assistance and services to Tenneco with respect to (a)
discussions and negotiations with customers of the Energy Business (as defined
in the Agreement and Plan of Merger dated as of June 19, 1996 among Tenneco,
Consultant and El Paso Merger Company (the "Merger Agreement"), plaintiffs in
material litigation involving the Energy Business and regulatory authorities
having jurisdiction over the operations of the Energy Business, including
assisting the Energy Business in enhancing its relationships with customers,
plaintiffs and regulatory authorities and in making progress towards, or
achieving settlement of, litigation, rate or regulatory proceedings and (b)
capital spending by the Energy Business.
2. Compensation.
(a) Tenneco recognizes that the foregoing consultation, assistance and
services (collectively, the "Consulting Services") involve a substantial
contribution of time, effort and expertise on the part of Consultant and
will result in incremental value accruing to the Energy Business after the
date of this Agreement.
(b) As compensation for the foregoing Consulting Services ("Consulting
Compensation"), Tenneco shall pay to Consultant a fixed consulting fee. The
fee is intended to reflect appropriate compensation to Consultant for the
incremental value that it is believed will accrue to the Energy Business
arising out of the Consulting Services. This belief takes into account the
nature and extent of the Consulting Services to be provided by the
Consultant, the expected impact of the Consulting Services on the Energy
Business, expected progress towards settlement achieved by the Energy
Business with respect to rate matters, regulatory proceedings and
litigation, the expected terms of any settlements obtained by the Energy
Business with respect to rate matters, regulatory proceedings and
litigation, the expected contribution of Consultant to achieving progress
towards any such settlement or obtaining any such settlement, and the
expected impact of any capital spending programs on the operations of the
Energy Business including improvements to facilities, property, plant and
equipment. In order to avoid any dispute between Tenneco and Consultant as
to the incremental value attributable to the Consulting Services and the
amount of the Consulting Compensation and to limit the aggregate amount of
the Consulting Compensation, Tenneco and Consultant have agreed that the
Consulting Compensation shall be in the amount of $10,000,000 per month for
the six-month term of this Agreement. The aggregate $60,000,000 amount of
the Compensation shall be payable by Tenneco immediately prior to any
termination of the Merger Agreement dated the date hereof among Tenneco,
Consultant and El Paso Merger Company (the "Merger Agreement"), pursuant to
(x) Section 8.1(iii), (y) Section 8.1(iv)(B) or 8.1(v)(B), if Tenneco's
Board of Directors withdrew, amended or modified in a manner materially
adverse to Consultant its recommendation concerning the Merger or the
Spinoffs prior to the vote of Tenneco's stockholders which is the subject
of Section 8.1(iv)(B) or 8.1(v)(B), or (z) Section 8.1(vi) of the Merger
Agreement, whether such termination occurs prior or subsequent to the
expiration of paragraph 1 of this Agreement.
(c) Consultant shall have no liability arising out of or relating to its
performance of the Consulting Services, except for its gross negligence or
wilful misconduct.
3. Term. The term of the Consulting Services provided in paragraph 1 of this
Agreement shall commence on the date of this Agreement and shall expire on
December 19, 1996. All other provisions of this Agreement shall survive the
expiration of paragraph 1 of this Agreement.
4. Entire Agreement; Severability. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof. If
this Agreement is held to be prohibited or invalid under applicable laws, such
prohibition or invalidity shall have no effect upon any provision of the
Merger Agreement or any other agreement between the parties hereto.
5. Proceedings. Consultant shall indemnify and hold harmless Tenneco, its
directors and officers from and against any liabilities, losses, damages,
claims, costs and expenses (including reasonable attorneys' fees and expenses)
arising out of, resulting from or relating to any action, suit or proceeding
relating to this Agreement.
6. Counterparts. This Agreement may be executed simultaneously in two
counterparts, which taken together will constitute one and the same Agreement.
7. Governing Law. ALL QUESTIONS AND/OR DISPUTES CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE
INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE. EACH OF
THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES TO
BE SUBJECT TO, AND HEREBY CONSENTS AND SUBMITS TO, THE JURISDICTION OF THE
COURTS OF THE STATE OF DELAWARE AND OF THE FEDERAL COURTS SITTING IN THE STATE
OF DELAWARE.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date
first written above.
Tenneco Inc.
/s/ X.X. Xxxxx
By: _________________________________
Title: Vice President and Deputy
General Counsel
El Paso Natural Gas Company
/s/ Xxxxxxx Xxxxx, Xx.
By: _________________________________
Title: Sr. V.P. and General
Counsel
EX2C-2
