UNDERWRITING AGREEMENT
November 12, 1996
TENNECO INC.
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Dear Sirs and Mesdames:
We (the "Manager") 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 TENNECO INC., a
Delaware corporation (the "Company"), proposes to issue and sell shares of its
8 1/4% Cumulative Junior Preferred Stock, Series A, without par value (the
"Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell to the several Underwriters, and
each Underwriter agrees, severally and not jointly, to purchase from the
Company the respective number of Firm Securities set forth below opposite
their names at a purchase price of $49.25 per share, plus accrued dividends,
if any, to the Closing Date (as defined herein):
NUMBER OF
NAME SECURITIES
---- ----------
Xxxxxx Xxxxxxx & Co.
Incorporated................................................... 900,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ............. 850,000
Xxxx Xxxxxx Xxxxxxxx Inc........................................ 850,000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation........................................ 850,000
Xxxxxxx, Sachs & Co............................................. 850,000
PaineWebber Incorporated........................................ 850,000
Xxxxx Xxxxxx Inc................................................ 850,000
---------
Total......................................................... 6,000,000
=========
The Underwriters will pay for the Securities in federal or other funds
immediately available upon delivery thereof at the office of Xxxxxx Xxxxxx &
Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 9:00 a.m. (New York time)
on November 18, 1996, or at such other time and place as the Company and the
Manager may agree. The time and date of such payment and delivery are
hereinafter referred to as the "Closing Date."
The Securities shall have the terms set forth in the Prospectus dated
November 12, 1996, and the Prospectus Supplement dated November 12, 1996
("Prospectus Supplement"), including the following:
Terms of Securities
Maturity Date: None
Dividend Rate: 8 1/4% per annum
Redemption Provisions: As set forth in the Prospectus Supplement
Dividend Payment Dates: March 31, June 30,
September 30, and
December 31, commencing December 31, 1996
Liquidation Preference: $50 per share
Form and Denomination: As requested by the Manager in writing two
business days prior to the Closing Date
All provisions contained in the document entitled Tenneco Inc. Underwriting
Agreement Standard Provisions (Junior Preferred Stock) dated November 12, 1996
(the "Standard Agreement"), a copy of which is attached hereto, are herein
incorporated by reference in their entirety and shall be deemed to be a part
of this Agreement to the same extent as if such provisions had been set forth
in full herein, except that (i) if any term defined in such document is
otherwise defined herein, the definition set forth herein shall control, (ii)
all references in such document to a type of security that is not a Security
shall not be deemed to be a part of this Agreement and (iii) all references in
such document to a type of agreement that has not been entered into in
connection with the transactions contemplated hereby shall not be deemed to be
a part of this Agreement.
In addition to the conditions to the several obligations of the Underwriters
set forth in Article V of the Standard Agreement, the several obligations of
the Underwriters are subject to the following further conditions:
(a) The Underwriters shall have received an opinion of the General Counsel
of the Company, dated the Closing Date, to the effect that the statements in
the Prospectus Supplement under the captions "Description of Series A
Preferred Stock," "Consent to Distributions and Charter Amendment," "Appraisal
Rights," and "Recent Tax Proposals" in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings referred
to therein, fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize the matters
referred to therein.
(b) The Underwriters shall have received an opinion of Jenner & Block,
counsel for the Company, dated the Closing Date, to the effect that such
counsel is of the opinion ascribed to it in the Prospectus Supplement under
the caption "Certain United States Federal Tax Considerations For Non-U.S.
Holders of Series A Preferred Stock."
(c) El Paso Natural Gas Company shall have executed and delivered to the
Underwriters the letter agreement of even date herewith (the "El Paso
Agreement"); the El Paso Agreement shall not have been terminated; and each of
the conditions to the several obligations of the Underwriters set forth in the
El Paso Agreement shall have been satisfied or waived by the Underwriters.
If, on the Closing Date, any one or more of the Underwriters shall fail or
refuse to purchase Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate number of Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of the Securities
to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Securities set forth opposite
their respective names above bears to the aggregate number of Securities set
forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as you may specify, to purchase the 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
Securities that any Underwriter has agreed to purchase be increased by an
amount in excess of one-ninth of such number of Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Securities and the aggregate
number of Securities with respect to which such default occurs is more than
one-tenth of the aggregate number of Securities to be purchased on such date,
and arrangements satisfactory to you and the Company for the purchase of such
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 you or the Company shall
have the right to postpone the Closing Date, 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.
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Please confirm your agreement by having an authorized officer sign a copy of
this Agreement in the space set forth below.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
Acting severally on
behalf of itself and
the several
Underwriters named
herein
By: /s/ Xxxxx Xxxxxx
_________________________________
Name:
Title:
Accepted as of the above date:
TENNECO INC.
By: /s/ Xxxxxx X. Xxxxxxx
_____________________________
Name:
Title:
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