1
EXHIBIT 10.22
$500,000,000
TENNECO INC.
11 5/8% SENIOR SUBORDINATED NOTES DUE 2009
PURCHASE AGREEMENT
October 8 1999
XXXXXXX XXXXX XXXXXX INC.,
and the Initial
Purchasers listed on
Schedule I hereto
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Tenneco Inc., a Delaware corporation (the "Company"),
proposes, upon the terms and conditions set forth herein, to issue and sell to
Xxxxxxx Xxxxx Xxxxxx Inc. and Banc of America Securities LLC, Bear, Xxxxxxx &
Co. Inc., Chase Securities Inc., Credit Suisse First Boston Corporation, Xxxxxx
Xxxxxxx & Co. Incorporated, Banc One Capital Markets, Inc., BNY Capital Markets,
Inc., Commerzbank Capital Markets Corporation, First Union Securities, Inc., ING
Barings LLC, Xxxxxxx Xxxxx Securities Inc., Scotia Capital Markets (USA) Inc.,
XX Xxxxx Securities Corporation and TD Securities (USA) Inc. (collectively, the
"Initial Purchasers") $500,000,000 aggregate principal amount of its 11 5/8%
Senior Subordinated Notes due 2009 (the "Notes"). Immediately, upon consummation
of the Spin-Off Transactions (as defined in the Offering Memorandum under the
caption "Description of the Notes"), the Company will cause the Notes to be
guaranteed (each, a "Guarantee") on a senior subordinated basis by each of its
material domestic wholly-owned subsidiaries (except as otherwise provided in the
Indenture (as defined below)), as Guarantors (each, a "Guarantor"). The Notes
and the Guarantees are referred to herein as the "Securities." The Securities
will be issued pursuant to an indenture,
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to be dated as of October 14, 1999 (the "Indenture"), by and among the Company,
the Guarantors and The Bank of New York, as trustee (the "Trustee"). Not less
than $486,875,000 (the "Escrow Account") of the net proceeds from the sale of
the Securities will be deposited with the Trustee, as escrow agent under the
Indenture. Immediately upon consummation of the Spin-Off Transactions, the
Company will cause each of the Guarantors to execute an assumption agreement
(the "Assumption Agreement") substantially in the form of Exhibit C hereto
pursuant to which each of the Guarantors shall agree to assume the rights,
duties and obligations of an "Issuer" hereunder and under the Registration
Rights Agreement (as defined herein), as if such Guarantor were a party hereto
and thereto as of the date hereof and at the Closing Date (as defined herein).
The Company and the Guarantors (collectively, the "Issuers")
wish to confirm as follows their agreement with the Initial Purchasers in
connection with the purchase and resale of the Securities. Notwithstanding
anything to the contrary contained herein, with respect to the Guarantors, such
confirmation and agreement shall be confirmed only from and after execution of
the applicable Assumption Agreement.
1. Preliminary Offering Memorandum and Offering Memorandum.
The Securities will be offered and sold to the Initial Purchasers without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance on an exemption pursuant to Section 4(2) under the Securities
Act and the rules and regulations promulgated thereunder. The Issuers have
prepared a preliminary offering memorandum, dated September 22, 1999 (the
"Preliminary Offering Memorandum"), and an offering memorandum, dated October 8,
1999 (as amended or supplemented from time to time, the "Offering Memorandum"),
setting forth information regarding the Issuers and the Securities. All
references herein to the Offering Memorandum shall include any supplement or
amendment subsequent thereto. The Issuers hereby confirm that they have
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchasers on the terms and subject to the conditions set forth herein.
The Issuers understand that the Initial Purchasers propose to
make offers and sales ("Exempt Resales") of the Securities purchased by the
Initial Purchasers hereunder only on the terms and in the manner set forth in
the Offering Memorandum and Section 2 hereof, as soon as the Initial Purchasers
deem advisable after this Agreement has been executed and
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delivered, (i) to persons in the United States whom the Initial Purchasers
reasonably believe to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the Securities Act, as such
rule may be amended from time to time ("Rule 144A"), in transactions under Rule
144A and (ii) outside the United States to persons other than U.S. persons in
reliance upon and in compliance with Regulation S under the Securities Act, as
such regulation may be amended from time to time ("Regulation S"). The persons
specified in clauses (i) and (ii) are referred to herein as the "Eligible
Purchasers." As used herein, the terms "United States" and "U.S. persons" have
the respective meanings given them in Regulation S.
It is understood and acknowledged that upon original issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Securities Act, each of the Notes (and each note
issued in exchange therefor or in substitution thereof) shall bear the following
legend:
THIS NOTE (AND ANY GUARANTEE THEREOF) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND NEITHER
THIS SECURITY (NOR ANY GUARANTEE THEREOF) NOR ANY INTEREST OR
PARTICIPATION HEREIN (OR THEREIN) MAY BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM,
OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OR ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER HEREOF, BY ITS
ACCEPTANCE OF THIS SECURITY, AGREES FOR THE BENEFIT OF THE ISSUER THAT
THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE
THERETO UNDER RULE 144(k) UNDER THE SECURITIES ACT WHICH IS APPLICABLE
TO THIS SECURITY (THE "RESALE RESTRICTION TERMINATION DATE") OTHER THAN
(1) TO THE ISSUER OR ITS SUBSIDIARIES, (2) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER, IN EACH CASE TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON
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THE REVERSE OF THIS SECURITY IF THIS SECURITY IS NOT IN BOOK-ENTRY FORM),
(3) TO A NON-"U.S. PERSON" IN AN "OFFSHORE TRANSACTION" (AS SUCH TERMS ARE
DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY
THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY IF THIS SECURITY IS NOT IN BOOK-ENTRY FORM), (4) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, INCLUDING THE EXEMPTION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IF AVAILABLE, OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES
TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE
PROPERTY OF SUCH INVESTOR ACCOUNT OR ACCOUNTS BE AT ALL TIMES WITHIN ITS OR
THEIR CONTROL, AND SUBJECT TO THE RIGHT OF THE ISSUER OR THE TRUSTEE FOR
THE SECURITIES PRIOR TO ANY SUCH SALE, PLEDGE OR OTHER TRANSFER PURSUANT TO
CLAUSE (4) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS
LEGEND WILL BE REMOVED UPON REQUEST OF THE HOLDER ON OR AFTER THE RESALE
RESTRICTION TERMINATION DATE.
It is also understood and acknowledged that holders (including
subsequent transferees) of the Securities will have the registration rights set
forth in the registration rights agreement (the "Registration Rights Agreement")
substantially in the form attached hereto as Exhibit A to be dated as of the
Closing Date (as defined herein) by and among the Company and the Initial
Purchasers.
2. Agreements to Sell, Purchase and Resell.
(a) Upon the basis of the representations, warranties and
agreements of the Initial Purchasers herein contained and subject to all the
terms and conditions set forth herein, each of the Issuers hereby agrees to
issue and sell its Securities to the Initial Purchasers and, upon the basis of
the representations, warranties and agreements of the Issuers herein contained
and subject to all the terms and conditions set forth herein, each Initial
Purchaser, severally and not jointly, agrees to purchase from the Issuers that
principal amount of Securities set forth opposite the name of such Initial
Purchaser on Schedule I attached hereto at a purchase price of 97.375% of the
principal amount thereof.
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(b) Each Initial Purchaser represents and warrants to the Issuers that
it is a Qualified Institutional Buyer with such knowledge and experience in
financial and business matters as are necessary to evaluate the merits and risks
of an investment in the Securities, it believes it has received all of the
information it considers necessary or appropriate for deciding whether to make
an investment in the Securities, and it has advised the Issuers that it proposes
to offer the Securities for resale upon the terms and conditions set forth in
this Agreement and in the Offering Memorandum in Exempt Resales. Each Initial
Purchaser hereby represents and warrants to, and agrees with, the Issuers that
it (i) will not solicit offers for, or offer to sell, the Securities by means of
any form of general solicitation or general advertising or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act (including, but not limited to, (A) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (B) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising;
provided, however, that such limitation shall not preclude the Initial
Purchasers from placing any "tombstone" announcement with respect to the resale
by the Initial Purchasers of the Securities, provided that such announcement is
not prohibited by (and is in compliance with) Regulation S), and (ii) will
solicit offers for the Securities only from, and will offer, sell or deliver the
Securities as part of its initial resales only to, (A) persons in the United
States whom such Initial Purchaser reasonably believes to be Qualified
Institutional Buyers, or if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to such Initial Purchaser that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A, in each case, in
transactions under Rule 144A and (B) outside the United States to persons other
than U.S. persons in reliance on Regulation S. Each Initial Purchaser has
advised the Company that it will offer the Securities to Eligible Purchasers at
a price initially equal to 97.375% of the principal amount thereof, plus accrued
interest, if any, from October 14, 1999.
(c) Each Initial Purchaser represents and warrants that (i) it has not
offered or sold, and will not offer or sell, directly or indirectly, any of the
Securities in the United Kingdom by means of any document, other than to persons
whose ordinary business it is to buy or sell shares or debentures whether as
principal or agent (except in circumstances
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that do not constitute an offer to the public within the meaning of the
Companies Act 1985), (ii) it has complied with and will comply with all
applicable provisions of the Financial Services Xxx 0000 with respect to
anything done by such Initial Purchaser in relation to the Securities in, from
or otherwise involving the United Kingdom and (iii) it has only issued or passed
on and will only issue or pass on in or from the United Kingdom to any persons
any document received by such Initial Purchaser in connection with the issue of
the Securities if the recipient is of a kind described in Article 9(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1988,
as amended.
(d) Each Initial Purchaser represents and warrants that with respect to
Securities offered and sold or to be offered and sold pursuant to Regulation S
it has offered and sold the Securities and agrees that it will offer and sell
the Securities (i) as part of its initial distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering of
the Securities and the Closing Date, only in accordance with Rule 903 of
Regulation S. Accordingly, each Initial Purchaser represents, warrants and
agrees that with respect to Securities offered and sold or to be offered and
sold pursuant to Regulation S none of it, its affiliates or any person acting on
its behalf or on behalf of its affiliates has engaged or will engage in any
directed selling efforts in the United States with respect to the Securities,
and it and its affiliates have complied and will comply with the offering
restrictions requirements of Regulation S. Each Initial Purchaser agrees that,
at or prior to confirmation of any sale of Securities pursuant to Regulation S,
it will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases such Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
The Securities covered hereby have not been registered under the
Securities Act, and may not be offered and sold within the United
States or to, or for the account or benefit of, U.S. persons (i) as
part of their initial distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering and the
Closing Date, except in either case in accordance with Regulation S or
Rule 144A under the Securities Act. Terms used above have the
respective meanings given to them in Regulation S under the Securities
Act.
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Each Initial Purchaser understands that the Issuers and, for
the purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Section 7(e) and Section 7(f) hereof, counsel to the Company and counsel to
the Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and agreements and each Initial Purchaser hereby consents to
such reliance.
3. Delivery of the Securities and Payment Therefor. Delivery
to the Initial Purchasers of and payment for the Securities shall be made at the
office of Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 9:00
A.M., New York City time, on October 14, 1999 (the "Closing Date"). The place of
closing for the Securities and the Closing Date may be varied by agreement
between the Initial Purchasers and the Company.
The Securities will be delivered to the Initial Purchasers
against payment of the purchase price therefor by federal funds, certified check
or wire transfer, in each case, of immediately available funds payable in
accordance with written instructions from the Company; provided, that not less
than $486,875,000 such funds shall be deposited in the Escrow Account with the
Trustee pursuant to the terms of the Indenture. The Securities will be evidenced
by one or more global securities (each, a "Global Security"), and will be
registered, in the name of Cede & Co. as nominee of The Depository Trust Company
("DTC") or in such names and in such denominations as the Initial Purchasers
shall request prior to 1:00 p.m., New York City time, on the business day
preceding the Closing Date. The Securities to be delivered to the Initial
Purchasers shall be made available to the Initial Purchasers in New York City
for inspection and packaging not later than 9:30 a.m., New York City time, on
the business day next preceding the Closing Date.
4. Agreements of the Issuers. Each of the Issuers agrees with
the Initial Purchasers as follows:
(a) Until the completion of the distribution of the Securities
by the Initial Purchasers to Eligible Purchasers, the Company will
advise the Initial Purchasers promptly and, if requested, will confirm
such advice in writing, of any material adverse change in the condition
(financial or other), business, properties or results of operations of
Automotive (as defined in the Offering Memorandum), or of the happening
of any event or the existence of any condition that requires any
amendment or supplement to the Offering Memorandum (as then amended or
supplemented) so that the Offering Memorandum (x) will not contain
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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, in the light of the circumstances under which they were made,
not misleading, or (y) will comply with applicable law.
(b) The Company will furnish to the Initial Purchasers,
without charge, such number of copies of the Offering Memorandum, as it
may then be amended or supplemented, as the Initial Purchasers may
reasonably request.
(c) The Issuers will not make any amendment or supplement to
the Preliminary Offering Memorandum or to the Offering Memorandum of
which the Initial Purchasers shall not previously have been advised or
to which they shall object in writing after being so advised unless, in
the reasonable opinion of counsel to the Company, such amendment or
supplement is necessary to comply with applicable law.
(d) Prior to the execution and delivery of this Agreement, the
Issuers have delivered or will deliver to the Initial Purchasers,
without charge, in such reasonable quantities as the Initial Purchasers
shall have requested or may hereafter request, copies of the
Preliminary Offering Memorandum. The Issuers consent to the use, in
accordance with the securities or Blue Sky laws of the jurisdictions in
which the Securities are offered by the Initial Purchasers and by
dealers, prior to the date of the Offering Memorandum, of each
Preliminary Offering Memorandum so furnished by the Issuers. The
Issuers consent to the use of the Offering Memorandum (and of any
amendment or supplement thereto prepared in accordance with Section
4(c)) in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Securities are offered by the Initial
Purchasers and by all dealers to whom Securities may be sold, in
connection with the offering and sale of the Securities.
(e) If, at any time prior to completion of the distribution of
the Securities by the Initial Purchasers to Eligible Purchasers, any
event shall occur or condition shall exist that in the judgment of the
Company or in the opinion of the Initial Purchasers based on advice of
counsel requires any amendment or supplement to the Offering Memorandum
(as then amended or supplemented) so that the Offering Memorandum (x)
will not contain any untrue statement of a material fact or omit to
state a material fact
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required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or (y) will comply with applicable law, the Issuers
will, in each such case subject to Section 4(c), promptly prepare an
appropriate supplement or amendment thereto, and will expeditiously
furnish to the Initial Purchasers that number of copies thereof as they
shall reasonably request.
(f) The Issuers will cooperate with the Initial Purchasers and
with their counsel in connection with the qualification of the
Securities for offering and sale by the Initial Purchasers and by
dealers under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchasers may designate and will file such consents to
service of process or other documents necessary or appropriate in order
to effect such qualification; provided that in no event shall an Issuer
be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action that would subject it to
general service of process in any jurisdiction where it is not now so
subject.
(g) So long as any of the Securities are outstanding, the
Company will furnish to the Initial Purchasers (i) as soon as
reasonably practicable, a copy of each report of the Company filed with
the Securities and Exchange Commission (the "Commission") and (ii) from
time to time such other information concerning the Issuers as the
Initial Purchasers may reasonably request.
(h) The Issuers will initially deposit the net proceeds from
the sale of the Securities in the Escrow Account and thereafter will
apply the proceeds from the sale of the Securities in accordance with
the description set forth under "Use of Proceeds" in the Offering
Memorandum.
(i) The Issuers have not taken, nor will they take, directly
or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the
price of the Securities to facilitate the sale or resale of the
Securities. Except as permitted by the Securities Act, the Issuers will
not distribute any offering material in connection with the Exempt
Resales. Except following the effectiveness of the Exchange
Registration Statement or the Shelf Registration (each as defined in
the Registration Rights Agreement), the Issuers will not solicit any
offers to buy and will
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not offer to sell the Securities by means of any form of general
solicitation or general advertising (within the meaning of Regulation D
under the Securities Act) or by means of any directed selling efforts
(as defined under Regulation S and the Commission's releases related
thereto).
(j) The Issuers will assist the Initial Purchasers in causing
the Securities to be eligible for trading on the PORTAL market.
(k) From and after the Closing Date, so long as any of the
Securities are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act or, if earlier,
until two years after the Closing Date, and during any period in which
the Company is not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Company will
furnish to holders of the Securities and prospective purchasers of
Securities designated by such holders, upon request of such holders or
such prospective purchasers, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act to permit
compliance with Rule 144A in connection with resales of the Securities.
(l) The Issuers agree not to sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) that would be integrated with the sale
of the Securities in a manner that would require the registration under
the Securities Act of the sale by the Issuers to the Initial Purchasers
or by the Initial Purchasers to the Eligible Purchasers of the
Securities.
(m) The Issuers agree to comply with all of the terms and
conditions of the Registration Rights Agreement, and the Company agrees
to comply with all agreements set forth in the representation letter of
the Company to DTC relating to the approval of the Notes by DTC for
"book entry" transfer.
(n) The Issuers agree that not later than any registration of
the Securities pursuant to the Registration Rights Agreement, or at
such earlier time as may be so required, the Issuers shall use their
best efforts to cause the Indenture to be qualified under the Trust
Indenture Act of 1939 (the "1939 Act") and will cause to be entered
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into any necessary supplemental indentures in connection therewith.
(o) The Issuers shall not resell any Securities that have been
acquired by them.
(p) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as reasonably practicable after they have
been prepared, a copy of any unaudited interim consolidated financial
statements of the Company for any accounting period of the Company
subsequent to the period covered by the most recent consolidated
financial statements of the Company appearing in the Offering
Memorandum.
5. Representations and Warranties of Issuers. The Issuers, jointly and
severally, represent and warrant to the Initial Purchasers that:
(a) No order or decree preventing the use of the Preliminary
Offering Memorandum or the Offering Memorandum or any amendment or
supplement thereto, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration
requirements of the Securities Act, has been issued and no proceeding,
litigation or investigation for any such purpose has been commenced or
is pending or, to the knowledge of any of the Issuers, is threatened.
(b) The Preliminary Offering Memorandum, the Offering
Memorandum and each of the Exchange Act Reports (as defined herein), as
of their respective dates, and the Offering Memorandum, as of the
Closing Date, did not and will not contain an 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, in the light of
the circumstances under which they were made, not misleading, except
that this representation and warranty does not apply to statements or
omissions in the Preliminary Offering Memorandum and Offering
Memorandum made in reliance upon and in conformity with information
relating to any Initial Purchaser furnished to the Company in writing
by such Initial Purchaser through or on behalf of Xxxxxxx Xxxxx Barney
Inc. expressly for use therein.
(c) As of the Closing Date and as of the date funds are
released from the Escrow Account to the Company (the "Escrow Closing
Date"), the Indenture will have been duly
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and validly authorized by the Company and as of the Escrow Closing
Date, by the Guarantors, upon its execution and delivery by the
Issuers, and assuming due authorization, execution and delivery by the
Trustee, will be a valid and binding agreement of the Issuers,
enforceable in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and subject to
the applicability of general principles of equity; the Indenture
conforms in all material respects to the description thereof in the
Offering Memorandum; and, assuming the accuracy of the representations
of the Initial Purchasers contained herein, and compliance by the
Initial Purchasers with the Agreements contained herein no
qualification of the Indenture under the 1939 Act is required in
connection with the offer and sale of the Securities contemplated
hereby or in connection with the Exempt Resales.
(d) As of the Closing Date the Notes, and as of the Escrow
Closing Date the Guarantees, will have been duly authorized by the
Company and the Guarantors, respectively, and, when executed by the
Company and the Guarantors, respectively, and (in the case of the
Notes) authenticated by the Trustee in accordance with the Indenture
and delivered to the Initial Purchasers against payment therefor in
accordance with the terms hereof, will have been validly issued and
delivered, and will constitute valid and binding obligations of the
Company and the Guarantors, respectively, entitled to the benefits of
the Indenture and enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally
and subject to the applicability of general principles of equity; and
the Notes and the Guarantees conform in all material respects to the
descriptions thereof in the Offering Memorandum.
(e) Schedule II sets forth each of the subsidiaries that are
currently Significant Subsidiaries of the Company which hold assets or
operations related to the conduct of the business of Automotive (each,
a "Subsidiary").
(f) Each of the Issuers is a corporation duly incorporated,
validly existing and in good standing under the laws of its
jurisdiction of incorporation (except where the failure to be in good
standing, either singly or in the aggregate, would not have a material
adverse effect on
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the Issuers) with full power and authority (corporate and other) to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum, and is duly registered and
qualified to conduct its business as presently conducted as described
in the Offering Memorandum and is in good standing in each jurisdiction
where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure
to register or qualify would not have a material adverse effect on the
condition (financial or other), business, properties or results of
operations of Automotive (a "Material Adverse Effect").
(g) There are no legal or governmental proceedings pending
against any of the Issuers or, to the knowledge of any of the Issuers,
threatened against any of them or to which the Issuers or to which any
of the respective properties of the Issuers are subject that are not
disclosed in the Offering Memorandum and that, if adversely decided,
would cause a Material Adverse Effect or materially adversely affect
the issuance of the Securities, the Spin-Off Transactions or the
consummation of any of the transactions contemplated by this Agreement,
the Indenture, the Securities, the Registration Rights Agreement or the
Assumption Agreement (collectively, the "Transaction Documents"). There
are no individual agreements, contracts, indentures, leases or other
instruments of the Issuers that are material to Automotive, taken as a
whole, that are not described in the Offering Memorandum. Except as
disclosed in the Offering Memorandum, none of the Issuers is involved
in any strike, job action or labor dispute with any group of its
employees that would have a Material Adverse Effect, and, to the
knowledge of the Issuers, no such action or dispute is threatened.
(h) None of the Issuers is (x) in violation of its certificate
or articles of incorporation or bylaws or other organizational
documents, or of any law, ordinance, administrative or governmental
rule or regulation applicable to it or of any decree of any court or
governmental agency or body having jurisdiction over it, except where
any such violation or violations in the aggregate would not have a
Material Adverse Effect, or (y) 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 agreement,
indenture, lease or other instrument to which any of the Issuers is a
party or by which any of them or any of their respective
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properties may be bound, except as disclosed in the Offering Memorandum
or where any such default or defaults in the aggregate would not have a
Material Adverse Effect.
(i) None of (w) the issuance, offer, sale or delivery of the
Securities, (x) the execution, delivery or performance of the
Transaction Documents by any of the Issuers to the extent a party
thereto, (y) the consummation by the Issuers of the transactions
contemplated hereby or under any of the other Transaction Documents, or
(z) the Spin-Off Transactions (i) requires any consent, approval,
authorization or other order of, or registration or filing with (each,
a "Consent"), any court, regulatory body, administrative agency or
other governmental body, agency or official (except such Consents as
may have been obtained or may be required in connection with the
registration under the Securities Act of the Securities in accordance
with the Registration Rights Agreement, the filing of the Form S-4
Registration Statement of Packaging (as defined in the Offering
Memorandum) in connection with the Spin-Off Transactions (the "Form
S-4") with the Commission, the filing of the Form 10 Registration
Statement of Packaging in connection with the Spin-off Transactions
(the "Form 10"), the qualification of the Packaging common stock for
listing on the New York Stock Exchange, the qualification of the
Indenture under the 1939 Act and except for compliance with the
securities or Blue Sky laws of various jurisdictions or the failure to
obtain which would not have a Material Adverse Effect or materially
adversely affect the consummation of the transactions contemplated by
the Transaction Documents) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
certificate or articles of incorporation or bylaws or other
organizational documents of any of the Issuers, or (ii) conflicts or
will conflict with or constitutes or will constitute a breach of, or a
default under, any agreement, indenture, lease or other instrument to
which any of the Issuers is a party or by which any of them or any of
their respective properties may be bound, except as disclosed in the
Offering Memorandum including, without limitation, any Consent required
in connection with the debt realignment described therein, or any such
conflicts, breaches or defaults that in the aggregate would not have a
Material Adverse Effect, or (iii) violates or will violate any statute,
law, regulation or judgment, injunction, order or decree applicable to
any of the Issuers or any of their respective properties, except any
such violations that in the aggregate
15
-15-
would not have a Material Adverse Effect, or (iv) will result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of any of the Issuers pursuant to the terms of any
agreement or instrument to which any of them is a party or by which any
of them may be bound or to which any of their property or assets is
subject, other than liens, charges and encumbrances disclosed in the
Offering Memorandum or that would not in the aggregate have a Material
Adverse Effect.
(j) To the Company's knowledge, Xxxxxx Xxxxxxxx LLP, who have
certified the financial statements included as part of the Offering
Memorandum, are independent public accountants under Rule 101 of the
AICPA's Code of Professional Conduct and its interpretations and
rulings.
(k) The financial statements of the Company included in the
Offering Memorandum, together with the related notes thereto, comply in
all material respects with the requirements of the Securities Act, and
present fairly the financial position, results of operations and cash
flows of the Issuers at the dates and for the periods to which they
relate, and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis ("GAAP"). The pro
forma financial statements and other pro forma financial information
(including the notes thereto) included in the Offering Memorandum (A)
present fairly on the basis stated the information shown therein, (B)
comply in all material respects with the requirements of the Securities
Act and the Exchange Act, (C) have been prepared in accordance with
applicable requirements of Rule 11-02 of Regulation S-X promulgated
under the Securities Act and (D) have been properly computed on the
basis described therein. The Company believes that the assumptions used
in the preparation of the pro forma financial statements and other pro
forma financial information included in the Offering Memorandum are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein.
(l) Each of the Issuers has all the requisite corporate power
and authority to execute, deliver and perform its obligations under
each of the Transaction Documents, to the extent a party thereto; the
execution and delivery of, and the performance by each of the Issuers
(to the extent a party thereto) of its obligations under, each of the
Transaction Documents has been duly and validly
16
-16-
authorized by each of the Issuers and this Agreement and each of the
other Transaction Documents will have been duly executed and delivered
by the Company as of the Closing Date and each of the Guarantors as of
the Escrow Closing Date and, assuming the due authorization, execution
and delivery of each such Transaction Document by the other parties
thereto, will constitute at such time the valid and legally binding
agreement of each of the Issuers, enforceable against each Issuer in
accordance with its terms, except as the enforcement hereof and thereof
may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and subject to
the applicability of general principles of equity, and except as rights
to indemnity and contribution hereunder and thereunder may be limited
by Federal or state securities laws or principles of public policy.
(m) Except as disclosed in the Offering Memorandum, subsequent
to the date as of which such information is given in the Offering
Memorandum, none of the Issuers has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not
in the ordinary course of business, that is material or will be
material to Automotive, and there has not been any material change in
the capital stock, or material increase in the short-term or long-term
debt of the Company or any Subsidiary.
(n) Each of the Issuers has good and marketable title to all
property (real and personal) described in the Offering Memorandum as
being owned by it, free and clear of all liens, claims, security
interests or other encumbrances, except such as are described in the
Offering Memorandum or would not, in the aggregate, have a Material
Adverse Effect, and all the property described in the Offering
Memorandum as being held under lease by each of the Issuers is held by
it under, to each Issuer's knowledge, valid and enforceable leases,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors'
rights generally and subject to the applicability of general principles
of equity.
(o) Upon consummation of the Spin-Off Transactions, the
Issuers will have good and marketable title to all property (real and
personal) necessary for the conduct of the business of Automotive as
described in the Offering Memorandum as being owned by it, free and
clear of all
17
-17-
liens, claims, security interests or other encumbrances, except such as
are described in the Offering Memorandum or would not, in the
aggregate, have a Material Adverse Effect, and upon consummation of the
Spin-Off Transactions all property described in the Offering Memorandum
as being held under lease and used in the conduct of the business of
Automotive as described in the Offering Memorandum will be held by the
Issuers under to each Issuer's knowledge valid and enforceable leases,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors'
rights generally and subject to the applicability of general principles
of equity.
(p) Except as permitted by the Securities Act, the Issuers
have not distributed and, prior to the later to occur of the Closing
Date and completion of the distribution of the Securities, will not
distribute any offering material in connection with the offering and
sale of the Securities other than the Preliminary Offering Memorandum
and Offering Memorandum (and any amendment or supplement thereto in
accordance with Section 4(c) hereof).
(q) Each of the Issuers (i) has such permits, licenses,
franchises, certificates of need and other approvals or authorizations
of governmental or regulatory authorities ("Permits") as are necessary
under applicable law to own their respective properties and to conduct
their respective businesses in the manner described in the Offering
Memorandum and (ii) upon consummation of the Spin-Off Transactions,
will have such Permits as are necessary under applicable law to own
properties and conduct the business of Automotive, in each case except
to the extent that the failure to have such Permits would not have a
Material Adverse Effect; each of the Issuers has fulfilled and
performed in all material respects all its obligations with respect to
the Permits, and, to the knowledge of the Issuers, no event has
occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit, subject in
each case to such qualification as may be set forth in the Offering
Memorandum and except to the extent that any such revocation or
termination, individually or in the aggregate, would not have a
Material Adverse Effect.
18
-18-
(r) The Company maintains a system of internal accounting
controls and after consummation of the Spin-Off Transactions, the
Company will maintain a system of internal accounting controls
sufficient to provide reasonable assurances that: (i) transactions of
the Issuers are executed in accordance with management's general or
specific authorization; and (ii) transactions of the Issuers are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets.
(s) None of the Issuers nor, to the knowledge of any of the
Issuers, any employee or agent of the Issuers has made any payment of
funds or received or retained any funds in violation of any law, rule
or regulation, which violation would have a Material Adverse Effect.
(t) Except as disclosed in the Offering Memorandum, the
Issuers have filed all tax returns required to be filed (other than
filings being contested in good faith), which returns are true and
correct in all material respects as of their respective filing dates,
and none of the Issuers is in default in the payment of any taxes that
were payable pursuant to said returns or any assessments with respect
thereto (other than taxes being contested in good faith), except where
the failure to file such returns and make such payments (whether or not
being contested in good faith) would not, individually or in the
aggregate, have a Material Adverse Effect.
(u) Upon redemption of the preferred stock of Tenneco
International Holding Corp., no holder of any security of an Issuer
(other than holders of the Securities) will have any right to request
or demand registration of any security of an Issuer because of the
consummation of the Spin-Off Transactions or the transactions
contemplated by the Transaction Documents.
(v) Each of the Issuers owns or possess adequate rights to
use, and after giving effect to the Spin-Off Transactions will own or
possess adequate rights to use all patents, trademarks, trademark
registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in
the Offering Memorandum as being owned by it or necessary for the
conduct of the business of Automotive, and no Issuer has received
notice of any claim to the contrary (a "Claim") or any challenge (a
"Challenge") by any
19
-19-
other person to the rights of each of the Issuers with respect to the
foregoing, except for such Claims and Challenges that would not have a
Material Adverse Effect.
(w) None of the Issuers is and, upon sale of the Securities to
be issued and sold hereby in accordance herewith and the application of
the net proceeds of such sale as described in the Offering Memorandum
under the caption "Use of Proceeds," will be an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(x) When the Securities are issued and delivered pursuant to
this Agreement, such Securities will not be of the same class (within
the meaning of Rule 144A(d)(3) under the Securities Act) as any
security of an Issuer that is listed on a national securities exchange
registered under Section 6 of the Exchange Act or that is quoted in a
United States automated interdealer quotation system.
(y) None of the Issuers nor any of its affiliates (as defined
in Rule 501(b) of Regulation D under the Securities Act) has directly,
or through any agent (provided that no representation is made as to the
Initial Purchasers or any person acting on their behalf), (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) that is or
will be integrated with the offering and sale of the Securities in a
manner that would require the registration of the Securities under the
Securities Act or (ii) engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D under the
Securities Act) in connection with the offering of the Securities.
(z) Assuming (i) the representations and warranties of the
Initial Purchasers in Section 2 hereof are true and correct in all
material respects, (ii) each Initial Purchaser complies with the
covenants set forth in Section 2 hereof, (iii) compliance by each
Initial Purchaser with the offering and transfer procedures and
restrictions described in the Offering Memorandum, (iv) the accuracy of
the representations and warranties deemed to be made in the Offering
Memorandum by purchasers to whom the Initial Purchasers initially
resell Securities and (v) purchasers to whom the Initial Purchasers
initially resell Securities receive a copy of the Offering Memorandum
prior to such sale, the purchase and sale of the Securities pursuant
20
-20-
hereto (including the Initial Purchasers' proposed offering of the
Securities on the terms and in the manner set forth in the Offering
Memorandum and Section 2 hereof) do not require registration under the
Securities Act.
(aa) The execution and delivery of this Agreement and the
other Transaction Documents and the sale of the Securities to the
Initial Purchasers by the Issuers and by the Initial Purchasers to
Eligible Purchasers in accordance with the terms hereof and the
consummation of the Spin-Off Transactions will not result in any
prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code. The representations made by
the Issuers in the preceding sentence are made in reliance upon and
subject to the accuracy of, and compliance with, the representations
and covenants made or deemed made by the Eligible Purchasers as set
forth in the Offering Memorandum under the section entitled "Notice to
Investors."
(bb) Except as disclosed or contemplated by the Offering
Memorandum, each of the Issuers is in compliance with, and not subject
to any liability under, any applicable federal, state, local and
foreign statute, regulation, rule, codes, ordinances, directives and
orders relating to pollution or to protection of public or employee
health or safety or to the environment, including, without limitation,
those that relate to any Hazardous Material (as defined herein
("Environmental Laws")), except, in each case, where noncompliance or
liability, individually or in the aggregate, would not have a Material
Adverse Effect. The term "Hazardous Material" means any pollutant,
contaminant or waste, or any hazardous, dangerous, or toxic chemical,
material, waste, substance or constituent subject to regulation under
any Environmental Law.
(cc) Immediately after the consummation of each of the
purchase and sale of the Securities and the Spin-Off Transactions, the
fair value and present fair saleable value of the assets of the Company
will exceed the sum of its stated liabilities and identified contingent
liabilities; the Company is not, nor will it be, after giving effect to
the consummation of such transactions, (i) left with unreasonably small
capital with which to carry on its business as it is proposed to be
conducted, (ii) unable to pay its debts (contingent or otherwise) as
they mature or (iii) otherwise insolvent.
21
-21-
(dd) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources that the
Company believes to be reliable and accurate in all material respects.
(ee) In connection with the tender offers and exchange offers
to be consummated in connection with the Spin-Off Transactions, the
Company has complied, and will continue to comply at all times prior to
the expiration of the tender offers and exchange offers, in all
material respects with the applicable requirements of the Exchange Act.
(ff) The historical financial information and statistical data
set forth in the Offering Memorandum under the captions "-- Summary --
Summary Historical and Pro Forma Combined Financial Data",
"Capitalization", "Unaudited Pro Forma Consolidated Financial
Statements", "Supplemental Consolidated Financial Data" and "Selected
Financial Data" in each case including the accompanying notes, are
prepared on a basis consistent with the relevant historical
consolidated financial statements or combined financial statements, as
the case may be, of the Company.
6. Indemnification and Contribution.
(a) The Issuers agree to jointly and severally indemnify and
hold harmless each Initial Purchaser and each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each of their respective employees, from and
against any and all losses, claims, damages, liabilities and out-of-pocket
expenses (including reasonable costs of investigation) incurred by any such
persons arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum or
Offering Memorandum or in any amendment or supplement thereto, or arising out of
or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to an Initial
Purchaser through Xxxxxxx Xxxxx Xxxxxx Inc., furnished in writing to the Company
by an Initial Purchaser, expressly for
22
-22-
use in connection therewith; provided, however, that the indemnification
contained in this paragraph (a), with respect to the Preliminary Offering
Memorandum shall not inure to the benefit of an Initial Purchaser on account of
any such loss, claim, damage, liability or expense arising from the sale of the
Securities by such Initial Purchaser to any person if the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in the Preliminary Offering Memorandum was corrected in the Offering
Memorandum and such Initial Purchaser sold Securities to that person without
sending or giving, at or prior to the written confirmation of such sale, a copy
of the Offering Memorandum (as then amended or supplemented). The foregoing
indemnity agreement shall be in addition to any liability that an Issuer may
otherwise have.
(b) If any action, suit or proceeding shall be brought against an
Initial Purchaser or any person who controls an Initial Purchaser in respect of
which indemnity may be sought against the Issuers in accordance with this
Section 6, such Initial Purchaser or any such person who controls such Initial
Purchaser or is an employee of such Initial Purchaser shall promptly notify in
writing any Issuer, and the Issuers shall assume the defense thereof, including
the employment of counsel reasonably acceptable to such Initial Purchaser or
such person who controls an Initial Purchaser or such employee of such Initial
Purchaser and payment of all fees and expenses relating to the assumption of the
defense by the Issuers. An Initial Purchaser or any person who controls an
Initial Purchaser or an employee of such Initial Purchaser shall have the right
to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Initial Purchaser or any such person who
controls an Initial Purchaser or such employee of such Initial Purchaser unless
(i) any Issuer has agreed in writing to pay such fees and expenses, (ii) the
Issuers have failed to assume the defense and employ counsel on a timely basis
or (iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Initial Purchaser or any such person who
controls an Initial Purchaser or such employee of such Initial Purchaser and an
Issuer and such Initial Purchaser or any such person who controls an Initial
Purchaser or such employee of such Initial Purchaser shall have been advised by
its counsel that representation of such indemnified party and such Issuer by the
same counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
23
-23-
case the Issuers shall not have the right to assume the defense of such action,
suit or proceeding (a "Conflicted Action") on behalf of such Initial Purchaser
or any such person who controls an Initial Purchaser). It is understood,
however, that the Issuers shall, in connection with any such Conflicted Action,
be liable for the reasonable fees and expenses of a single counsel (in addition
to any local counsel) for the Initial Purchasers and each person who controls an
Initial Purchaser and their respective employees, which firm shall be designated
in writing by Xxxxxxx Xxxxx Barney Inc., and that all such reasonable fees and
expenses shall be reimbursed as incurred as provided in paragraph (a) hereof.
The Issuers shall not be liable for any settlement of any such action, suit or
proceeding effected without the written consent of the Issuers, but if settled
with such written consent, or if there be a final judgment for the plaintiff in
any such action, suit or proceeding, the Issuers agree to jointly and severally
indemnify and hold harmless the Initial Purchasers, to the extent provided in
paragraph (a), and any person who controls an Initial Purchaser from and against
any loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless each Issuer, their respective directors, employees
and officers and any person who controls an Issuer within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the indemnity from the Issuers to the Initial Purchasers set forth in paragraph
(a) hereof, but only with respect to information relating to such Initial
Purchaser furnished in writing by such Initial Purchaser through Xxxxxxx Xxxxx
Xxxxxx Inc. expressly for use in the Preliminary Offering Memorandum or Offering
Memorandum or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against an Issuer, any of their respective
directors, employees or officers or any such controlling person based on the
Preliminary Offering Memorandum or Offering Memorandum, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against an
Initial Purchaser pursuant to this paragraph (c), such Initial Purchaser shall
have the rights and duties given to the Issuers by paragraph (b) above (except
that if the Issuers shall have assumed the defense thereof, such Initial
Purchaser shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the reasonable fees and
expenses of such counsel shall be at such Initial Purchaser's expense), and each
Issuer, their respective directors and officers and any such controlling person
shall have the rights and duties given to
24
-24-
the Initial Purchasers by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability that an Initial Purchaser may otherwise
have.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by an
Issuer on the one hand and an Initial Purchaser on the other hand from the
offering of the 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 an Issuer on the one hand and an Initial Purchaser on
the other in connection with the statements or such omissions that resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by an Issuer
on the one hand and an Initial Purchaser on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by an Issuer bear to the total discounts and
commissions received by such Initial Purchaser, in each case as set forth in the
table on the cover page of the Offering Memorandum. The relative fault of an
Issuer on the one hand and an Initial Purchaser 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 the omission or alleged omission to state
a material fact relates to information supplied by such Issuer on the one hand
or by such Initial Purchaser on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Issuers and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 6 were determined by
a pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other
25
-25-
out-of-pocket expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending or appearing as a third
party witness in any such action, suit or proceeding. Notwithstanding the
provisions of this Section 6, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price of the
Securities purchased by it and distributed to the public exceeds the amount of
any damages that such Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 6 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred, provided
that court judgments shall be payable only when final and non-appealable. The
indemnity and contribution agreements contained in this Section 6 and the
representations and warranties of the Issuers set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of an Initial Purchaser or any person who
controls an Initial Purchaser, an Issuer, their respective directors, employees
or officers or any person controlling an Issuer, (ii) acceptance of any
Securities and payment therefor hereunder and (iii) any termination of this
Agreement. A successor to an Initial Purchaser or any person who controls an
Initial Purchaser, an Issuer, their respective directors or officers or any
person controlling an Issuer, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
6.
(g) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
7. Conditions of the Initial Purchasers' Obligations. The obligations
of each Initial Purchaser to purchase
26
-26-
and pay for the Securities to be purchased by it on the Closing Date hereunder
are subject to the fulfillment, in such Initial Purchaser's sole discretion, of
the following conditions:
(a) At the time of execution of this Agreement and on the
Closing Date, no order or decree preventing the use of the Offering
Memorandum or any amendment or supplement thereto, or any order
asserting that the transactions contemplated by this Agreement are
subject to the registration requirements of the Securities Act shall
have been issued and no proceedings for those purposes shall have been
commenced or shall be pending or, to the knowledge of the Issuers,
threatened. No order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceedings for that purpose
shall have been commenced or shall be pending or, to the knowledge of
the Issuers, threatened.
(b) At the time of the execution of this Agreement and on the
Closing Date, the Company shall have entered into a new credit facility
providing for borrowings on the date the Spin-Off Transactions are
consummated of at least $1,550,000,000 and having terms substantially
identical to those set forth in the Offering Memorandum under the
caption "Description of Senior Credit Facility" (the "New Credit
Facility"), and the Company shall have delivered to the Initial
Purchasers a true, correct and complete executed copy of the New Credit
Facility. The Company shall have received the necessary consents under
its Credit Facility by and among the Company, the banks party thereto,
Xxxxxx Guaranty Trust Company, as Administrative Agent, Bank of America
Illinois, as Documentation Agent and X.X. Xxxxxx Securities Inc. as
Arranger, dated November 4, 1996, permitting the Offering of the Notes
and the Spin-Off Transactions and such consents shall be in form and
substance reasonably satisfactory to the Initial Purchasers.
(c) On the Closing Date, Tenneco's board of directors shall
have duly authorized the consummation of the Spin-Off Transactions in
substantially the form set forth in the Offering Memorandum and such
authorization shall not have been rescinded, and the consummation of
the Spin-Off Transactions shall not be subject to any order, decree or
injunction of any court or governmental authority or agency the effect
of which would be to prevent the consummation of such Spin-Off
Transactions.
27
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(d) Subsequent to the date hereof, (i) except as disclosed or
contemplated in the Offering Memorandum, there shall not have occurred
any material adverse change in the condition (financial or other),
business, prospects, properties, assets, net worth, or results of
operations of (x) the Issuers, taken as a whole or (y) Automotive,
which, in the opinion of the Initial Purchasers, would materially
adversely affect the market for the Securities, or (ii) the Offering
Memorandum shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, if amending
or supplementing the Offering Memorandum to correct any such
misstatement or omission could, in the sole judgment of the Initial
Purchasers, materially adversely affect the marketability of the
Securities.
(e) The Initial Purchasers shall have received on the Closing
Date an opinion of Jenner & Block, counsel for the Issuers, dated the
Closing Date and addressed to the Initial Purchasers, substantially in
the form of Exhibit B hereto.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Initial
Purchasers, dated the Closing Date and addressed to the Initial
Purchasers, with respect to such matters as the Initial Purchasers may
request.
(g) The Initial Purchasers shall have received "cold comfort"
letters addressed to the Initial Purchasers, and dated the date hereof
and the Closing Date, from Xxxxxx Xxxxxxxx LLP, substantially in the
forms heretofore approved by the Initial Purchasers.
(h) (i) There shall not have been any change in the capital
stock of the Company or any Subsidiary nor any material increase in the
short-term or long-term debt of the Company or any Subsidiary from that
set forth or contemplated in the Offering Memorandum; there has not
occurred and does not exist, since the respective dates as of which
information is given in the Offering Memorandum, any event or condition
which has had or could reasonably be expected to have a Material
Adverse Effect; (ii) except as disclosed or contemplated by the
Offering Memorandum, the Company and the Subsidiaries shall not have
any liabilities
28
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or obligations, direct or contingent, except for liabilities incurred
in the ordinary course of business, that are material to Automotive;
(iii) all the representations and warranties of the Company contained
in this Agreement shall be true and correct in all material respects on
and as of the date hereof and on and as of the Closing Date as if made
on and as of the Closing Date; and (iv) the Initial Purchasers shall
have received a certificate, dated the Closing Date and signed by the
chief executive officer and the chief accounting officer of each of the
Company (or such other officers as are acceptable to the Initial
Purchasers), to the effect set forth in this Section 7(h) and in
Section 7(j) hereof.
(i) The Issuers shall not have failed at or prior to the
Closing Date to have performed or complied with any of their respective
agreements herein contained and satisfied all the conditions required
to be performed or complied with by them hereunder at or prior to the
Closing Date.
(j) Subsequent to the date hereof, there shall not have been
any announcement by any "nationally recognized statistical rating
organization," as defined for purposes of Rule 436(g) under the
Securities Act, that (i) it is downgrading its rating assigned to any
class of securities of Automotive (including the Securities and such
other securities as the Offering Memorandum contemplates will be issued
in connection with the transactions contemplated herein and the
Spin-Off Transactions), or (ii) it is reviewing its ratings assigned to
any class of securities of Automotive (including the Securities and
such other securities as the Offering Memorandum contemplates will be
issued in connection with the transactions contemplated herein and in
the Spin-Off Transactions) with a view to possible downgrading, with
negative implications or direction not determined.
(k) The Securities shall have been approved for trading on the
PORTAL market.
(l) The Issuers shall have furnished or caused to be furnished
to the Initial Purchasers such further certificates and customary
closing documents as the Initial Purchasers shall have reasonably
requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only
29
-29-
if they are reasonably satisfactory in form and substance to the Initial
Purchasers.
Any certificate or document signed by any officer of an Issuer and
delivered to the Initial Purchasers, or to counsel for the Initial Purchasers,
shall be deemed a representation and warranty by the Issuers to the Initial
Purchasers as to the statements made therein.
8. Expenses.
(a) Whether or not the purchase and sale of the Securities hereunder is
consummated or this Agreement is terminated pursuant to Section 9 hereof, the
Issuers agree to pay the following costs and expenses and all other costs and
expenses incident to the performance by them of their obligations hereunder: (i)
the printing or reproduction of the Preliminary Offering Memorandum and the
Offering Memorandum (including financial statements thereto), and each amendment
or supplement to any of them, the Agreement, Registration Rights Agreement and
the Indenture; (ii) the delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Offering Memorandum,
the Preliminary Offering Memorandum and all amendments or supplements thereto as
may be reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp taxes in connection with
the original issuance and sale of the Securities; (iv) the printing (or
reproduction) and delivery of the preliminary and supplemental Blue Sky
Memoranda and all other agreements and documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (v) the application
for quotation of the Securities on PORTAL; (vi) the qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 4(f) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Initial Purchasers relating
to the preparation, printing or reproduction, and delivery of the preliminary
and supplemental Blue Sky Memoranda and such qualification); and (vii) the
reasonable fees and expenses of the Issuers' accountants and the reasonable fees
and expenses of counsel (including local and special counsel) for the Company.
(b) If the purchase and sale of the Securities hereunder is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated because
30
-30-
of any failure, refusal or inability on the part of the Issuers to perform all
obligations and satisfy all conditions on their part to be performed or
satisfied hereunder other than by reason of a default by an Initial Purchaser in
payment for the Securities on the Closing Date, the Issuers shall reimburse the
Initial Purchasers promptly upon demand for all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities and the other transactions contemplated hereby; provided that the
defaulting Initial Purchaser shall reimburse the Issuers upon demand for all
reasonable out-of-pocket expenses (including reasonable fees and expenses for
law and accounting services and printing costs) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities and the
transactions contemplated hereby.
9. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, without
liability on the part of the Initial Purchasers to the Issuers, by notice to any
Issuer, if prior to the Closing Date, (i) trading in securities generally on the
New York Stock Exchange, American Stock Exchange or the Nasdaq National Market
shall have been suspended or materially limited, (ii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York state authorities or (iii) there shall have occurred any
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions, the
effect of which on the financial markets of the United States or the market for
the Securities is such as to make it, in the sole judgment of the Initial
Purchasers, impracticable or inadvisable to commence or continue the offering of
the Securities on the terms set forth on the cover page of the Offering
Memorandum (or if not yet in existence then the Preliminary Offering Memorandum)
or to enforce contracts for the resale of the Securities by the Initial
Purchasers. Notice of such termination may be given to the Issuers by telegram,
telecopy or telephone and shall be subsequently confirmed by letter.
10. Default by an Initial Purchaser. If any Initial Purchaser shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Initial Purchaser hereunder and such failure to purchase shall constitute a
default in the performance of its obligations under this Agreement, the
remaining Initial Purchaser shall be obligated to take up and pay for the
Securities which the defaulting Initial Purchasers
31
-31-
agreed but failed to purchase; provided, however, that in the event that the
aggregate principal amount of Securities which the defaulting Initial Purchaser
agreed but failed to purchase shall exceed 10% of the aggregate principal amount
of Securities set forth in Schedule I hereto, the remaining Initial Purchasers
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such non-defaulting Initial Purchasers
do not purchase all the Securities, this Agreement will terminate without
liability to the non-defaulting Initial Purchasers or the Issuers. In the event
of a default by any Initial Purchaser as set forth in this Section 10, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the non-defaulting Initial Purchasers shall determine in order that the required
changes in the Offering Memorandum or in any other documents or arrangements may
be effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Issuers or the non-defaulting
Initial Purchasers for damages occasioned by its default hereunder.
11. Information Furnished by the Initial Purchasers. The statements set
forth in the stabilization legend on page ii and in the ninth paragraph under
the caption "Plan of Distribution" in the Preliminary Offering Memorandum and
the Offering Memorandum, constitute the only information furnished by the
Initial Purchasers as such information is referred to in Sections 5(b) and 6
hereof.
12. Miscellaneous. Except as otherwise provided herein, notice given
pursuant to any provision of this Agreement shall be in writing and shall be
delivered (i) if to the Issuers, at Tenneco, 000 Xxxxx Xxxxx Xxxxx, Xxxx Xxxxxx,
XX 00000, Attention: Xxxx X. Xxxxxxx, or (ii) if to the Initial Purchasers, to
Xxxxxxx Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention:
Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Initial Purchasers, Issuers, and their respective directors, officers and the
controlling persons referred to in Section 6 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the terms "successors and assigns" as used in this Agreement
shall include a purchaser from an Initial Purchaser of any of the Securities in
its status as such purchaser.
32
-32-
13. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York without regard
to principles of conflicts of law.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument.
33
S-1
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
TENNECO INC.
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Vice President & Treasurer
Confirmed as of the date first above mentioned.
XXXXXXX XXXXX BARNEY INC.,
and the Initial
Purchasers listed on
Schedule I hereto
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By: /s/ Xxxxxxx Xxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxx
Title: Vice President
34
SCHEDULE I
INITIAL PURCHASERS' PRINCIPAL AMOUNT
OF SECURITIES TO BE PURCHASED
NAME AMOUNT
---- ------
Xxxxxxx Xxxxx Barney Inc. $ 225,000,000
Credit Suisse First Boston Corporation 62,500,000
Xxxxxx Xxxxxxx & Co. Incorporated 37,500,000
Banc of America Securities LLC 37,500,000
Chase Securities Inc. 37,500,000
Bear, Xxxxxxx & Co. Inc. 17,500,000
BNY Capital Markets 10,000,000
Banc One Capital Markets 10,000,000
Commerzbank Capital Markets Corporation 10,000,000
Xxxxxxx Xxxxx Securities Inc. 8,750,000
First Union Securities, Inc. 8,750,000
ING Barings 8,750,000
Scotia Capital Markets (USA) Inc. 8,750,000
Societe Generale 8,750,000
TD Securities 8,750,000
---------
TOTAL: $ 500,000,000
===========
35
SCHEDULE II
AUTOMOTIVE SUBSIDIARIES
JURISDICTION OF
OWNED BY AND INCORPORATION/
NAME PERCENTAGE OWNED ORGANIZATION
---- ---------------- ------------
Tenneco Automotive Inc. Tenneco Inc./100% Delaware
Tenneco International Holding Corp. Tenneco Inc./100%(a) Delaware
----------
(a) As of consummation of the Spin-Off Transactions.
36
EXHIBIT A
[Form of Registration Rights Agreement]
(executed and filed as Exhibit
10.23 to the Registration
Statement with which this is filed)
37
EXHIBIT B
[Form of Opinion of Jenner & Block]
October __, 1999
XXXXXXX XXXXX BARNEY INC.,
and the other Initial Purchasers listed
on Schedule I hereto
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
We have acted as special counsel to Tenneco Inc., a Delaware
corporation (the "Company"), in connection with the execution, delivery and
performance by the Company of the Purchase Agreement among Xxxxxxx Xxxxx Barney
Inc., the other Initial Purchasers and the Company dated October 8, 1999 (the
"Purchase Agreement"), pursuant to which the Initial Purchasers are purchasing
an aggregate principal amount of $500 million 115/8% Senior Subordinated Notes
due 2009 (the "Notes"), to be issued pursuant to an indenture dated as of
October __, 1999 (the "Indenture") between the Company and The Bank of New York,
as Trustee. This opinion is being delivered pursuant to Section 7(e) of the
Purchase Agreement. Initially capitalized terms not defined herein have the
definitions set forth in the Purchase Agreement.
For purposes of our opinion, we have examined the following
documents (the "Documents"):
(a) The Preliminary Offering Memorandum dated September
22, 1999 (the "Preliminary Offering Memorandum")
relating to the Notes;
(b) The final Offering Memorandum dated October 8, 1999
(the "Offering Memorandum") relating to the Notes;
38
October __, 1999
Page 2
(c) The Purchase Agreement;
(d) The Indenture;
(e) The form of the Notes; and
(f) The Registration Rights Agreement dated October __,
1999 (the "Registration Rights Agreement").
In addition, we have examined originals or copies of certificates and the
documents delivered in connection with the sale of the Notes on the date hereof.
We have also examined certified copies of resolutions of the Board of Directors
and/or committees of the Board of Directors of the Company authorizing the
Documents and other matters. In addition, we have made inquiries of officers and
employees of the Company and we have examined originals (or copies certified or
otherwise identified to our satisfaction) of such instruments, certificates and
documents and we have reviewed such questions of law, as we have deemed
necessary or appropriate for the purpose of the opinion rendered below. As to
any fact material to our opinion, we have (with your permission and without any
investigation or independent confirmation) assumed the accuracy of such
instruments, certificates and documents with respect to the facts stated
therein. In rendering the opinion that follows, we have assumed (i) the
genuineness of all signatures, (ii) the authenticity of all documents submitted
to us as originals, (iii) the conformity to the original documents of all
documents submitted to us as copies, (iv) that all documents which must be
executed and delivered by parties other than the Company to be effective have
been duly authorized, executed and delivered by such other parties and (v) that
the Notes have been fully paid for.
Whenever our opinion with respect to the existence or absence
of facts is indicated to be based on our knowledge, we are referring to the
actual knowledge of Jenner & Block attorneys who have given substantive
attention to matters concerning the Company during the course of our
representation of the Company, which knowledge has been obtained by such
attorneys in their capacity as such. Notwithstanding the foregoing, for purposes
of our opinion in subparagraph 9(ii), knowledge shall mean the actual knowledge
of Jenner & Block attorneys who have devoted a significant amount of time to the
Spin-Off Transactions, which knowledge has been obtained by such attorneys in
their capacity as such. Except as expressly set forth herein, we have not
undertaken any independent investigation to determine the existence or absence
of such facts and no inference as to our knowledge concerning such facts should
be drawn from the fact that such representation has been undertaken by us.
39
October __, 1999
Page 3
Based on the foregoing and subject to such other or further
exceptions and limitations as may be set forth below, it is our opinion that:
1. Each of the Company, Tenneco Automotive Inc., a
Delaware corporation ("TA"), andTenneco International
Holding Corp., a Delaware corporation ("TIHC"), is
validly existing and in good standing under the laws
of its jurisdiction of incorporation with requisite
corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Offering Memorandum, and is duly
registered and qualified to conduct its business and
is in good standing in each jurisdiction where the
nature of its properties or the conduct of its
business requires such registration or qualification,
except where the failure to register or qualify would
not reasonably be expected to have a Material Adverse
Effect.
2. The Company has the requisite corporate power and
authority to execute, deliver and perform its
obligations under the Purchase Agreement, the
Indenture and the Registration Rights Agreement; the
execution and delivery of, and the performance by the
Company of its obligations under, each of the
Purchase Agreement, the Indenture and the
Registration Rights Agreement has been duly and
validly authorized by the Company, and each of the
Purchase Agreement, the Indenture and the
Registration Rights Agreement has been duly executed
and delivered by the Company. The Purchase Agreement,
the Indenture and Registration Rights Agreement
(assuming due authorization and execution by each
party thereto other than the Company, to the extent a
party thereto) each constitute a valid and legally
binding agreement of the Company, enforceable against
the Company in accordance with its terms.
3. The Notes have been duly authorized by the Company
and, when authenticated by the Trustee in accordance
with the Indenture and delivered to the Initial
Purchasers against payment therefor in accordance
with the terms of the Purchase Agreement, will have
been validly issued and delivered, and will
constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture and
enforceable in accordance with their terms.
4. None of (a) the issuance, offer, sale or delivery of
the Securities, (b) the execution, delivery or
performance of the Documents by the Company, TA, or
TIHC, to the extent a party thereto, or (c) the
consummation by the Company, TA or TIHC of any of the
transactions contemplated by the
40
October __, 1999
Page 4
Documents, (i) to our knowledge, requires any
consent, approval, authorization or other order of,
or registration or filing with (each, a "Consent"),
any court, regulatory body, administrative agency or
other governmental body, agency or official (except
such as may have been obtained or may be required in
connection with the registration under the Securities
Act of the Securities in accordance with the
Registration Rights Agreement, the qualification of
the Indenture under the 1939 Act and except for
compliance with the securities or Blue Sky laws of
various jurisdictions), (ii) conflicts or will
conflict with or constitutes or will constitute a
breach of, or a default under, the certificate of
incorporation or by-laws of the Company, TA or TIHC,
except any such conflicts, breaches and defaults that
in the aggregate would not reasonably be expected to
have a Material Adverse Effect, (iii) to our
knowledge, conflicts or will conflict with or
constitutes or will constitute a breach of, or a
default under, any agreement, indenture, lease or
other instrument known to us to which the Company, TA
or TIHC is a party or by which any of them or any of
their respective properties may be bound, except as
disclosed in the Offering Memorandum including,
without limitation, any Consent required in
connection with the debt realignment described
therein, or any such conflicts, breaches and defaults
that in the aggregate would not reasonably be
expected to have a Material Adverse Effect, (iv)
violates or will violate any statute, law, regulation
or filing or judgment, injunction, order or decree
known to us to be applicable to the Company, TA or
TIHC, or any of their respective properties, except
any such violations that in the aggregate could not
have a Material Adverse Effect (it being understood
that we express no opinion in this paragraph 4
regarding compliance with disclosure requirements or
prohibitions against fraud or misrepresentation), or
(v) will result in the creation or imposition of any
lien, charge or encumbrance upon any property or
assets of the Company, TA or TIHC pursuant to the
terms of any agreement or instrument known to us to
which any of them is a party or by which any of them
may be bound or to which any of their properties or
assets is subject, other than as disclosed in the
Offering Memorandum.
5. The Initial Purchasers will acquire title to the
Notes, free and clear of all security interests,
mortgages, pledges, liens, encumbrances, claims and
equities if the Initial Purchasers acquire such Notes
in good faith and without notice of any such security
interests, mortgages, pledges, liens, encumbrances,
claims or equities.
41
October __, 1999
Page 5
6. The Indenture creates a valid security interest in
favor of the Trustee in all right, title and interest
of the Company in and to the Collateral (as defined
in the Indenture).
7. Assuming (i) the representations and warranties of
the Company in Section 5 of the Purchase Agreement
are true and correct, (ii) the representations and
warranties of the Initial Purchasers in Section 2 of
the Purchase Agreement are true and correct, (iii)
the Company complies with the covenants set forth in
Section 4 of the Purchase Agreement, (iv) the Initial
Purchasers comply with the covenants set forth in
Section 2 of the Purchase Agreement, (v) the Initial
Purchasers comply with the offering and transfer
procedures and restrictions described in the Offering
Memorandum, (vi) the representations and warranties
deemed to be made in the Offering Memorandum by
purchasers to whom the Initial Purchasers initially
resell Securities are true and correct and (vii)
purchasers to whom the Initial Purchasers initially
resell Securities receive a copy of the Offering
Memorandum prior to such sale, the purchase and sale
of the Securities pursuant to the Purchase Agreement
(including the Initial Purchasers' offering and sale
of the Securities on the terms and in the manner set
forth in the Offering Memorandum and Section 2 of the
Purchase Agreement) do not require registration under
the Securities Act.
8. Assuming the accuracy of the Initial Purchasers'
representations and warranties contained in the
Purchase Agreement and the compliance by the Initial
Purchasers with the agreements contained in the
Purchase Agreement, no qualification of the Indenture
under the 1939 Act, as now in effect, is required in
connection with the offer and sale of the Securities
to the Initial Purchasers or the initial resale of
the Securities by the Initial Purchasers to Eligible
Purchasers solely in the manner contemplated by the
Purchase Agreement.
9. To our knowledge, (i) none of the Company, TA or TIHC
is in violation of its certificate of incorporation
or by-laws, (ii) none of the Company, TA or TIHC is
in violation of any law, ordinance, administrative or
governmental rule or regulation known to us to be
applicable to it, decree of any court or governmental
agency or body known to us as having jurisdiction
over the Company and (iii) none of the Company, TA or
TIHC is in default in the performance of any
obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of
indebtedness known to us to which any of the Company,
TA or TIHC is a party or by which any of their
42
October __, 1999
Page 6
respective properties may be bound, except as
disclosed in the Offering Memorandum or where any
such default or defaults in the aggregate would not
reasonably be expected to have a Material Adverse
Effect.
10. To our knowledge, (i) there are no legal governmental
proceedings involving or affecting any of the
Company, TA or TIHC, or any of their respective
properties or assets, which would be required to be
described in a prospectus pursuant to the Securities
Act that are not described in the Offering
Memorandum, and (ii) there are no material contracts
or other documents which would be required to be
described in a prospectus pursuant to the Securities
Act that are not described in the Offering
Memorandum.
11. The statements in the Offering Memorandum under the
heading "Description of the Notes," insofar as such
statements purport to summarize certain provisions of
the Notes, the Guarantees, the Registration Rights
Agreement and the Indenture, are correct in all
material respects and provide a fair summary of the
provisions of such agreements and instruments.
12. The statements in the Offering Memorandum under the
heading "Risk Factors -- Risks Relating to the
Spin-Off," "Business -- Legal and Environmental
Proceedings", and "United States Federal Tax
Consequences" are correct in all material respects
and fairly summarize the legal matters and material
tax consequences, as the case may be, described
therein.
13. The Company is not, nor immediately after the sale of
the Securities to be sold under the Purchase
Agreement and the application of the proceeds from
such sale (as described in the Offering Memorandum
under the caption "Use of Proceeds") will it be an
"investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
14. Neither the consummation of the transactions
contemplated by the Purchase Agreement nor the sale,
issuance, execution or delivery of the Securities
will violate Regulation T, U or X of the Board of
Governors of the Federal Reserve system.
* * * * *
We have participated in conferences with officers and other
representatives of the Issuers, representatives of the independent public
accountants for the Issuers, representatives of the Initial Purchasers and
counsel for the Initial Purchasers at which the contents of the Offering
43
October __, 1999
Page 7
Memorandum and related matters were discussed, and, although we have not
independently verified and are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum, no information has come to our attention
that leads us to believe that the Offering Memorandum, as of its date or as of
the date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not materially misleading (it being
understood that we are not commenting as to the financial statements and related
notes thereto and the other financial, statistical and accounting data or
information, on the basis of and subject to the foregoing, included in the
Offering Memorandum or omitted therefrom).
We have assumed that New York law is identical to Illinois law
for purposes of rendering the opinions contained in paragraphs 2 and 3. We have
no knowledge that any provisions of New York law would render any of the
documents referred to in such paragraphs unenforceable in any material respect
(subject to each of the other assumptions and qualifications contained in this
letter).
As to the foregoing matters with respect to which we express
our opinion, we advise that: (i) we are not admitted to practice in any state
other than Illinois, and do not render any opinion as to legal matters subject
to or governed by laws other than those of the State of Illinois, United States
federal jurisprudence or the Delaware General Corporation Law and (ii) any
opinion to the effect that an instrument constitutes a binding obligation of any
person, or that it is enforceable in accordance with its terms, does not include
any opinion that specific performance or other equitable relief or remedies
would be available in the event of a breach of any particular provision thereof
and is qualified by the effect of applicable bankruptcy, moratorium, insolvency,
reorganization, fraudulent conveyance, and other laws and legal principles
affecting or limiting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law) and, in
certain circumstances, considerations of public policy, and (iii) the
enforceability of any indemnification or contribution provision of any contract
may be prohibited or limited under applicable securities laws or public policy
underlying such laws.
Our opinions are limited to the specific issues addressed and
are limited in all respects to laws and facts existing on the date hereof. By
rendering our opinions, we do not undertake to advise you of any changes in such
laws, or facts which may occur after the date hereof.
44
October __, 1999
Page 8
This opinion is furnished only for your benefit and may not be
relied upon by any other person or entity, nor may copies be delivered or
disclosed to any other person or entity, without the prior written consent of
this firm, except to the extent and in the manner contemplated by the Purchase
Agreement.
Very truly yours,
JENNER & BLOCK
45
EXHIBIT C
ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT (this "Agreement"), dated as of [ ], 1999, is
by and among [ ], a Xxxxxxx Xxxxx Xxxxxx Inc. and each of the other
Initial Purchasers listed on Schedule I to the Purchaser Agreement
(collectively, the "Initial Purchasers").
WITNESSETH
WHEREAS, Tenneco Inc. (the "Company") has heretofore executed and delivered
to the Initial Purchasers a purchase agreement (the "Purchase Agreement"), dated
as of October 8, 1999, providing for the terms pursuant to which the Initial
Purchasers will purchase $500,000,000 aggregate principal amount of 11 5/8%
Senior Subordinated Notes due 2009 (the "Notes") of the Company;
WHEREAS, the Company has heretofore executed and delivered to the Initial
Purchasers a registration rights agreement (the "Registration Rights
Agreement"), dated as of October 14, 1999, providing for the registration of the
Notes under the Securities Act of 1933, as amended;
WHEREAS, the Company has consummated the Spin-Off Transactions (as defined
in the Purchase Agreement);
WHEREAS, pursuant to the Purchase Agreement and the Registration Rights
Agreement, the Company has agreed to cause each of the Guarantors to,
concurrently with the consummation of the Spin-Off Transactions, execute this
Agreement pursuant to which such Guarantors shall agree to be bound by, and have
the rights and obligations set forth in each of the Purchase Agreement and the
Registration Rights Agreement; and
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Company
and the Guarantors mutually covenant and agree for the benefit of the Initial
Purchasers as follows:
1. ASSUMPTION. The Guarantors hereby agree to be deemed the "Guarantors"
and an "Issuer" for all purposes under
46
2
the Purchase Agreement and the Registration Rights Agreement and to perform all
obligations and duties of the Guarantors or an Issuer, as the case may be,
thereunder.
2. REPRESENTATIONS AND WARRANTIES. By execution of this Agreement, the
Guarantors hereby acknowledge and agree that they are making all of the
representations and warranties to the Initial Purchasers that the Issuers have
provided in the Purchase Agreement.
3. NEW YORK LAW TO GOVERN. The internal law of the State of New York,
without regard to the choice of law rules thereof, shall govern and be used to
construe this Agreement.
4. COUNTERPARTS. The parties may sign any number of copies of this
Agreement. Each signed copy shall be an original, but all of them together
represent the same agreement.
5. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered, all as of the date first above written, which is
the date of the Spin-Off Transactions.
TENNECO AUTOMOTIVE INC.
[ ]
By:
--------------------------------------------
Name:
Title:
[ ]
By:
--------------------------------------------
Name:
Title:
XXXXXXX XXXXX BARNEY INC.,
and the Initial
Purchasers listed
on Schedule I to
the Purchase Agreement
By: XXXXXXX XXXXX XXXXXX INC.
By:
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Name:
Title:
