<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: FEBRUARY 5, 1997
(DATE OF EARLIEST EVENT REPORTED: FEBRUARY 5, 1997)
EL PASO NATURAL GAS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION)
<TABLE>
<S> <C>
1-2700 74-0608280
(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
EL PASO ENERGY BUILDING
1001 LOUISIANA
HOUSTON, TEXAS 77002
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
(713) 757-2131
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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<PAGE> 2
ITEM 5. OTHER EVENTS.
El Paso Natural Gas Company (the "Company") is filing as an exhibit hereto
a form of Underwriting Agreement (the "Underwriting Agreement") with Donaldson,
Lufkin & Jenrette Securities Corporation, Goldman, Sachs & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated (collectively, the "Underwriters"),
in connection with the proposed public offering of 2,750,000 shares of the
Company's common stock, par value $3.00 per share (the "Common Stock"), and an
option for the Underwriters to purchase up to an additional 412,500 shares of
Common Stock to cover over-allotments. The shares of Common Stock covered by the
Underwriting Agreement are part of the securities previously registered by the
Company under registration statement No. 333-14617 for offering on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibit is filed with this Current Report on Form 8-K.
<TABLE>
<S> <C>
1 Form of Terms Agreement between El Paso Natural Gas Company
and Donaldson, Lufkin & Jenrette Securities Corporation,
Goldman, Sachs & Co. and Merrill Lynch & Co., together with
attached Underwriting Agreement Standard Provisions
</TABLE>
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EL PASO NATURAL GAS COMPANY
By /s/ BRITTON WHITE, JR.
------------------------------------
Britton White, Jr.
Executive Vice President
and General Counsel
Date: February 5, 1997
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
1 Form of Terms Agreement between El Paso Natural Gas Company
and Donaldson, Lufkin & Jenrette Securities Corporation,
Goldman, Sachs & Co. and Merrill Lynch & Co., together with
attached Underwriting Agreement Standard Provisions
</TABLE>
<PAGE> 1
EL PASO NATURAL GAS COMPANY
(A DELAWARE CORPORATION)
(COMMON STOCK)
TERMS AGREEMENT
Dated: February , 1997
El Paso Natural Gas Company
El Paso Energy Building
1001 Louisiana
Houston, Texas 77002
Dear Sirs:
The undersigned, Donaldson, Lufkin & Jenrette Securities Corporation (the
"Representative"), is acting on behalf of the underwriter or underwriters
(including itself) named below (such underwriter or underwriters being herein
called the "Underwriters"), and the Representative understands that El Paso
Natural Gas Company, a Delaware corporation (the "Company"), proposes to issue
and sell an aggregate of 2,750,000 shares of its Common Stock, $3.00 par value
per share (the "Common Stock"), described below.
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 Standard
Provisions referenced below) set forth opposite their respective names, and a
proportionate share of Option Securities (as defined in the Underwriting
Agreement Standard Provisions referenced below) to the extent any are purchased,
at the purchase price set forth below.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
UNDERWRITERS INITIAL UNDERWRITTEN SECURITIES
------------ -------------------------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities
Corporation................................
Goldman, Sachs & Co..........................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................
-------------
Total..............................
=============
</TABLE>
<PAGE> 2
The Underwritten Securities shall have the terms set forth in the
Prospectus, dated November 5, 1996, and the Prospectus Supplement, dated
February , 1997, including the following:
Title: Common Stock
Number of Shares: 2,750,000
Initial Public Offering Price Per Share: $[ ].
Purchase Price Per Share: $[ ].
Selling Concession: $[ ] per share.
Dealer Allowance and Reallowance: $[ ] per share.
Number of Option Securities, if any, that may be purchased by the Underwriters:
412,500
Closing Date and Location: 9:00 a.m., February , 1997, at the offices of
Fried, Frank, Harris, Shriver & Jacobson, One New
York Plaza, New York, New York.
Address for Notices to the Representative: Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park
Avenue, New York, New York 10172,
Attention: Syndicate Department.
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.
<PAGE> 3
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,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as
Underwriters,
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
Representative of the above-named
Underwriters,
By:
----------------------------------------
Name:
Title:
Accepted as of the date first above written:
EL PASO NATURAL GAS COMPANY
By:
- ------------------------------------------------
Name:
Title:
<PAGE> 4
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
Dated: February , 1997
El Paso Natural Gas Company, a Delaware corporation (the "Company"),
proposes to issue and sell shares of Common Stock, $3.00 par value per share
(the "Common Stock"), or Preferred Stock, $.01 par value per share (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 the Terms Agreement referred to below)
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 Agreement is Annex A thereto (the "Terms Agreement").
Terms defined in the Terms Agreement are used herein as therein defined. Unless
the context otherwise requires, all references to "this Agreement" or the
"Underwriting Agreement" shall mean, collectively, these Underwriting Agreement
Standard Provisions and the applicable Terms Agreement.
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 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 through
the date of the Terms Agreement, including all documents incorporated or deemed
to be incorporated therein by reference, as from time to time amended or
supplemented pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Securities Act of 1933, as amended (the "Securities Act"),
or otherwise, and any registration statement filed pursuant to Rule 462(b) under
the Securities Act are herein collectively referred to as the "Registration
Statement". The prospectus constituting a part of the Registration Statement and
any amendments or supplements to such prospectus through the date of the Terms
Agreement taken together with any term sheet meeting the requirements of Rule
434(b) under the Securities Act, as applicable, are collectively referred to
herein as the "Prospectus"; provided, however, that a supplement to the
Prospectus contemplated by Section 3(a) hereof (a "Prospectus Supplement") shall
be deemed to have supplemented the Prospectus only with respect to the offering
of Underwritten Securities to which it relates; provided further, however, that
if any revised prospectus or prospectus supplement shall be provided to the
Representative(s) on behalf of the Underwriters by the Company for use in
connection with the offering of the Underwritten Securities that differs from
the Prospectus (whether or not such revised prospectus or prospectus supplement
is required to be filed by the Company pursuant to Rule 424(b) under the
Securities Act), the term "Prospectus" shall refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Representative(s) on behalf of the Underwriters for such use.
Any reference herein or in the Terms Agreement to the Registration Statement or
the Prospectus shall be
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<PAGE> 5
deemed to refer to and include the documents incorporated by reference or deemed
to be incorporated by reference therein pursuant to Item 12 of Form S-3 that
have been filed on or before the date of the Terms Agreement or are to be filed
thereafter under the Exchange Act and are so filed thereafter; and any reference
herein to the terms "amend", "amended", "amendment", "supplement" or
"supplemented" with respect to the Registration Statement or the Prospectus
shall be deemed to refer to and include any such document filed or to be filed
under the Exchange Act.
1. Representations and Warranties. The Company represents and warrants to
each of the Underwriters named in the Terms Agreement that:
(a) The Registration Statement has become effective under the
Securities Act, no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose
are pending before or, to the best of the Company's knowledge, contemplated
by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder; (ii)
each part of the Registration Statement, when such part became effective,
did not contain, and each such part, as amended or supplemented, if
applicable, will not contain, any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (iii) the Registration
Statement and the Prospectus comply, and, as amended or supplemented, if
applicable, will comply, in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder; and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section
1(b) do not apply 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 and
in good standing under the laws of the State of Delaware, has the corporate
power and authority to own its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or to be in good standing would not have a material adverse
effect on the assets, business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect").
(d) Each significant subsidiary of the Company within the meaning of
Regulation S-X (each hereinafter referred to as a "Subsidiary") has been
duly incorporated and is validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its properties and to conduct its business as described in
the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a Material Adverse Effect.
(e) Except as may otherwise may be stated in the Prospectus
Supplement, the authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Description of Capital
Stock" 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
2
<PAGE> 6
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 the description thereof 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 which the Company or any Subsidiary
is a party or by which the Company or any of its Subsidiaries or their
respective property is bound, except in the case of clause (ii) for such
violations or defaults as would not, individually or in the aggregate, have
a Material Adverse Effect.
(i) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement 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 (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 that would restrict the
issuance and sale of the Underwritten Securities as contemplated by the
Prospectus or that are required under the Securities Act to be disclosed
therein and that are not disclosed. No contract or document of a character
required under the Securities Act to be described in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement is not 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
cash flows 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
3
<PAGE> 7
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 that is, (i) an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and
the rules and regulations promulgated by the Commission thereunder, or (ii)
a "holding company" within the meaning of, or subject to regulation under,
the Public Utility Holding Company Act of 1935, as amended, and the rules
and regulations promulgated by the Commission thereunder.
(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 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 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 (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 once in whole or in part only for the purpose
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 that 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
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
offices of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New
York, New York, 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
4
<PAGE> 8
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, if any of or all 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
offices of Fried, Frank, Harris, Shriver & Jacobson, 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 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.
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
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, 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.
(b) The Company will furnish to the Representative(s), without charge,
one signed copy of the Registration Statement (including exhibits thereto)
and for delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and, during the period
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) The Company will advise the Representative(s) promptly and, if
requested by the Representative(s), will 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 Underwritten 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
5
<PAGE> 9
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 United States 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 contain any material misstatement or
omission or so that the Prospectus, as so amended or supplemented, will
comply with such United States 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.
(h) Unless otherwise provided in the Terms Agreement, during the
period commencing on the date of the Terms Agreement and ending on the 90th
day after the date of the Terms Agreement, the Company will not, without
the Representative(s') prior consent on behalf of the Underwriters, offer,
sell or otherwise dispose of any Securities of the same class or series or
ranking on a parity with such Underwritten Securities, or any shares
exercisable for or convertible into such Underwritten Securities, or, if
such Terms Agreement relates to Underwritten Securities that are
convertible into Common Stock, any Common Stock; provided, however, that
the Company may issue Common Stock pursuant to reservations or agreements,
pursuant to any employee stock option plan, stock ownership plan or other
benefit plan of the Company or any of its subsidiaries or pursuant to any
dividend reinvestment and/or stock purchase plan, all as in effect at the
date of the Terms Agreement.
(i) The Company will use its reasonable efforts to do and perform all
things required or necessary to be done and performed under this Agreement
by the Company prior to the Closing Time and to satisfy all conditions
precedent to the delivery of the Underwritten 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 the representations and warranties of the Company contained in
this Agreement shall be true and correct at the applicable Closing Time
with the same force and effect as if made on and as of such Closing Time.
(b) As of the applicable Closing Time, there shall not have been,
since the date of the Terms Agreement or since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, in each case, as amended and supplemented,
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<PAGE> 10
(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 applicable
Closing Time a certificate, dated the applicable Closing Time and signed by
an executive officer of the Company, to the effect set forth in clauses
(b)(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, based on reasonable
investigation, with respect to Section 1(a) and 1(l) as to proceedings
contemplated or threatened.
(d) The Representative(s) shall have received at the applicable
Closing Time (i) an opinion of Fried, Frank, Harris, Shriver & Jacobson,
special counsel to the Company, addressing the matters set forth in Exhibit
A attached hereto, and (ii) an opinion of the General Counsel 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 Andrews & Kurth L.L.P. (or such other counsel
selected by the Representative(s)), special counsel for the Underwriters,
dated the applicable Closing Time, with respect to all such matters as the
Representative(s) may reasonably request.
(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) If 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 the applicable Closing Time pursuant to Section 4(c) hereof
remains true and correct in all material respects as of such Date of
Delivery.
(2) An opinion of Fried, Frank, Harris, Shriver & Jacobson, 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 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) hereof.
(4) An opinion of Andrews & Kurth L.L.P. (or such other counsel
selected by the Representative(s)), 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.
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<PAGE> 11
(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.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representative(s) by notice to the Company at any time at or prior to the
applicable Closing Time, and such termination shall be without any liability of
any party to any other party except as may be provided in Sections 5, 6 and 8
hereof.
5. Payment of Expenses. The Company will pay all expenses, fees and taxes
incident to the performance of its obligations under the Terms Agreement (which
incorporates by reference this Agreement), including, without limitation, (i)
the preparation and filing of the Registration Statement and the Prospectus and
all amendments and supplements thereto, and the reproduction of this Agreement,
(ii) the preparation, issuance and delivery of the 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 any 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.
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
8
<PAGE> 12
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 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
9
<PAGE> 13
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 Underwritten 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 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 or Date of Delivery to purchase the 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 Underwritten Securities to be
purchased as of the applicable Closing Time or Date of Delivery 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
10
<PAGE> 14
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 Underwritten Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase as of the applicable Closing Time or
Date of Delivery; provided, however, that in no event shall the number of
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 number of Underwritten Securities without the written consent
of such Underwriter. If, at the applicable Closing Time or Date of Delivery, any
Underwriter or Underwriters shall fail or refuse to purchase Underwritten
Securities and the number of Underwritten Securities with respect to which such
default occurs is more than one-tenth of the number of 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 Underwritten
Securities are not made within 48 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either the Representative(s) or the Company shall have
the right to postpone the applicable Closing Time or Date of Delivery 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.
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. This 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 in this 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
such notices shall be given to such Lead Representative at the address set forth
in the Terms Agreement.
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<PAGE> 15
EXHIBIT A
OPINION OF FRIED, FRANK, HARRIS, SHRIVER & JACOBSON,
COUNSEL FOR THE COMPANY
The opinion of counsel for the Company to be delivered pursuant to Section
4(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 the effectiveness of the Registration Statement is in effect and
no proceedings for that purpose are pending before or, to such counsel's
knowledge, contemplated by the Commission;
(ii) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(iii) the Initial Underwritten Securities have been duly authorized,
and, when issued, delivered and paid for in accordance with the terms of
the Underwriting Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of the Initial Underwritten Securities
will not be subject to any preemptive rights under the General Corporation
Law of the State of Delaware;
(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 any provision of applicable United States federal law, New York
law or the Delaware General Corporation Law or the Restated Certificate of
Incorporation, as amended, or By-laws, as amended, of the Company;
(v) 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, except such as may be required under the Securities
Act and the rules and regulations of the Commission thereunder, which have
been obtained, or as may be required under the securities or Blue Sky laws
of the various states in connection with the offer and sale of the
Underwritten Securities, as to which such counsel need not express any
opinion, 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;
(vi) 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;
(vii) the statements (A) in the 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 Delaware
General Corporation Law legal matters referred to therein, fairly present
the information disclosed therein in all material respects; and
(viii) (A) each document, if any, filed pursuant to the Exchange Act
and incorporated by reference in the Prospectus (except for financial
statements and schedules and other financial or statistical data included
or incorporated by reference therein or omitted therefrom as to which such
counsel need not express any opinion) appeared on its face to be
appropriately responsive in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission thereunder, and (B)
the Registration Statement and Prospectus (except for financial statements
and schedules and other financial or statistical data included or
incorporated by reference therein or omitted therefrom as to which such
counsel need not express any opinion) appeared on their face to be
appropriately responsive in all material respects with the requirements of
the Securities Act and the applicable rules and regulations of the
Commission thereunder.
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<PAGE> 16
In addition, such counsel shall state that, in the course of the
preparation by the Company of the Registration Statement, the Prospectus and the
Prospectus Supplement (including the documents incorporated by reference
therein), such counsel participated in conferences with certain of the officers
and representatives of the Company and the Company's independent accountants, at
which the Registration Statement, the Prospectus and the Prospectus Supplement
were discussed. Such counsel shall state that, between the date of effectiveness
of the Registration Statement and the time of delivery of such counsel's opinion
letter, such counsel participated in additional conferences with certain
officers and representatives of the Company, at which portions of the
Registration Statement, the Prospectus and the Prospectus Supplement were
discussed. Given the limitations inherent in the independent verification of
factual matters and the character of determinations involved in the registration
process, such counsel does not pass upon and need not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Prospectus or the Prospectus Supplement, except as
specifically described in 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, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or that the
Prospectus and the Prospectus Supplement, as of their respective dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Also, subject to the foregoing, such counsel shall state that no
facts have come to its attention in the course of the proceedings described in
the second sentence of this paragraph that cause such counsel to believe that
the Prospectus or the Prospectus Supplement as of the date and time of delivery
of such counsel's opinion letter contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
With respect to the preceding paragraph, Fried, Frank, Harris, Shriver &
Jacobson may state that (A) their opinion and belief is based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification, except as
specified, and (B) for purposes of paragraphs (iv) and (v), such counsel may
state (1) that it has reviewed only those statutes, rules and regulations that
in its experience are applicable to transactions of the type contemplated by the
Underwriting Agreement, and (2) that it does not act as United States regulatory
counsel to the Company in connection with, and does not hold itself out as
experts in, the regulation of the generation, transportation, distribution or
delivery of natural gas, oil, electricity or other specially regulated
commodities or services, including pipelines, transmission lines, storage
facilities and related facilities and equipment, or the import or export of such
commodities or services.
Such counsel need express no view, opinion or belief, however, with respect
to (i) financial statements, schedules or notes thereto or other financial or
statistical data included or incorporated by reference in or omitted from the
Registration Statement or Prospectus or any Prospectus Supplement, or (ii) the
Delaware corporation known prior to December 12, 1996 as Tenneco Inc. and any of
its businesses prior to December 12, 1996 other than Tenneco Energy (as defined
in the Prospectus Supplement).
Such counsel may state that the opinions expressed above are limited to the
federal laws of the United States, the laws of the State of New York, and the
General Corporation Law of the State of Delaware.
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<PAGE> 17
EXHIBIT B
OPINION OF BRITTON WHITE, JR.,
GENERAL COUNSEL OF THE COMPANY
The opinion of Britton White, Jr., 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 and
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 and in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power
and authority to own its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect;
(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 Subsidiary, or (B) 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) 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 the caption (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 as of the date of the
applicable report the information disclosed therein in all material
respects;
(vi) 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 that would restrict the issuance and sale of the
Underwritten Securities as contemplated by the Prospectus, or would be
required to be disclosed therein and that is not disclosed; also, such
counsel does not know of any statutes, regulations, contracts or other
documents that are required to be summarized in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as exhibits
to the Registration Statement that are not summarized, filed or
incorporated as required;
(vii) (A) each document, if any, filed pursuant to the Exchange Act
and incorporated by reference in the Prospectus (except for financial
statements and schedules and other financial or statistical data included
or incorporated by reference therein or omitted therefrom as to which such
counsel need not express any opinion) appeared on its face to be
appropriately responsive in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission thereunder, and (B)
the Registration Statement and Prospectus (except for financial statements
and schedules and other financial or statistical data included or
incorporated by reference therein or omitted therefrom as to which such
counsel need not express any opinion) appeared on their face to be
appropriately responsive in all
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material respects with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder; and
(viii) (A) 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 provisions of any applicable laws and
regulations specifically governing the generation, transportation,
distribution or delivery of natural gas, oil, electricity or other related
commodities or services, including pipelines, transmission lines, storage
facilities and related facilities and equipment, or the import or export of
such commodities or services (collectively, the "Energy Industry"), and (B)
no consent, approval, authorization or order of or qualification with any
United States federal body or agency specifically regulating the Energy
Industry is required for the performance by the Company of its obligations
under the Underwriting Agreement, except in each of the foregoing cases for
such violations, or failures to obtain such consent, approval,
authorization, order or qualification, as would not, individually or in the
aggregate, have a Material Adverse Effect.
In addition, such counsel shall state that in the course of the preparation
by the Company of the Registration Statement, the Prospectus and the Prospectus
Supplement, such counsel participated in conferences with certain of the
officers and representatives of the Company, counsel to the Company and the
Company's independent accountants, at which the Registration Statement, the
Prospectus and the Prospectus Supplement were discussed. Such counsel shall
state that, between the date of effectiveness of the Registration Statement and
the time of delivery of such counsel's letter, such counsel participated in
additional conferences with certain officers and representatives of the Company,
at which portions of the Registration Statement, the Prospectus and the
Prospectus Supplement were discussed. Given the limitations inherent in the
independent verification of factual matters and the character of determinations
involved in the registration process, such counsel does not pass upon and need
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the Prospectus or the
Prospectus Supplement, except as specifically described in paragraph (v) 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 of the Company, as well as information obtained
from officers and other representatives of the Company and the Company's
independent accountants, such counsel shall state that no facts have come to
such counsel's attention that have caused him to believe that the Registration
Statement, at the time it became effective, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or that the
Prospectus and the Prospectus Supplement, as of their respective dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Also, subject to the foregoing, no facts have come to such counsel's
attention in the course of the proceedings described in the second sentence of
this paragraph that cause him to believe that the Prospectus or the Prospectus
Supplement as of the date and time of delivery of such counsel's letter contains
any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
Such counsel need express no view, opinion or belief, however, with respect
to (i) financial statements, schedules or notes thereto or other financial or
statistical data included or incorporated by reference in or omitted from the
Registration Statement or Prospectus or any Prospectus Supplement, or (ii) the
Delaware corporation known prior to December 12, 1996 as Tenneco Inc. and any of
its businesses prior to December 12, 1996 other than Tenneco Energy (as defined
in the Prospectus Supplement).
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