EXHIBIT 1.1
TENNECO AUTOMOTIVE INC.
11,820,330 Shares of Common Stock
Underwriting Agreement
May [ ], 2004
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Citigroup Global Markets Inc.
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
c/o Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Tenneco Automotive Inc., a Delaware corporation (the
"Company"), proposes to issue and sell, upon the terms and subject to the
conditions set forth herein, to the several Underwriters listed in Schedule 1
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), an aggregate of 11,820,330 shares and, at the option of the
Underwriters, up to an additional 1,773,049 shares, of Common Stock, par value
$0.01 per share (the "Stock") of the Company. The aggregate of 11,820,330 shares
to be sold by the Company is herein called the "Underwritten Shares" and the
aggregate of 1,773,049 additional shares to be sold by the Company is herein
called the "Option Shares". The Underwritten Shares and the Option Shares are
herein referred to as the "Shares". The Stock, including the Shares, will have
attached thereto rights (the "Rights") to purchase additional stock of the
Company under certain circumstances. The Rights are to be issued pursuant to a
Rights Agreement (the "Rights Agreement") dated as of September 9, 1998 between
the Company and First Chicago Trust Company of New York, as amended.
The Company hereby confirms its agreement with the several
Underwriters concerning the purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder
(collectively, the "Securities Act"), a registration statement (File No. 114520)
including a prospectus, relating to the Shares and Rights. Such registration
statement, as amended at the time it becomes effective, including the
information, if any, deemed pursuant to Rule 430A under the Securities Act to be
part of the registration statement at the time of its effectiveness ("Rule 430
Information"), is referred to herein as the "Registration Statement"; and as
used herein, the term "Preliminary Prospectus" means each prospectus included in
such registration statement (and any amendments thereto) before it becomes
effective, any prospectus filed with the Commission pursuant to Rule 424(a)
under the Securities Act and the prospectus included in the Registration
Statement at the time of its effectiveness that omits Rule 430A Information, and
the term "Prospectus" means the prospectus in the form first used to confirm
sales of the Shares. If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement. Any
reference in this Agreement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act, as of the effective date of the Registration Statement
or the date of such Preliminary Prospectus or the Prospectus, as the case may be
and any reference to "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") that are deemed to
be incorporated by reference therein.
2. Purchase of the Shares by the Underwriters. (a) The Company
agrees to sell the Shares to the several Underwriters as provided in this
Agreement, and each Underwriter, on the basis of the representations, warranties
and agreements set forth herein and subject to the conditions set forth herein,
agrees, severally and not jointly, to purchase from the Company at a purchase
price per share of $[ ] (the "Purchase Price") the number of Underwritten Shares
(to be adjusted by you so as to eliminate fractional shares) set forth opposite
their respective names in Schedule I hereto.
In addition, the Company agrees to sell the Option Shares to
the several Underwriters and the Underwriters shall have the option to purchase
at their election up to 1,773,049 Option Shares at the Purchase Price. The
Underwriters, on the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, shall have the
option to purchase, severally and not jointly, from the Company at the Purchase
Price that portion of the number of Option Shares as to which such election
shall have been exercised (to be adjusted by you so as to eliminate fractional
shares) determined by multiplying such number of Option Shares by a fraction the
numerator of which is the maximum number of Option Shares which such Underwriter
is entitled to purchase and the denominator of which is the maximum number of
Option Shares which all of the Underwriters are entitled to purchase hereunder.
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The Underwriters may exercise the option to purchase the
Option Shares at any time and from time to time on or before the thirtieth day
following the date of this Agreement, by written notice from the Representatives
to the Company. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for, which may be the same date and
time as the Closing Date (as hereinafter defined) but shall not be earlier than
the Closing Date nor later than the tenth full business day (as hereinafter
defined) after the date of such notice (unless such time and date are postponed
in accordance with the provisions of Section 11 hereof). Any such notice shall
be given at least two Business Days prior to the date and time of delivery
specified therein.
(a) The Company understands that the Underwriters intend to
make a public offering of the Shares as soon after the effectiveness of this
Agreement as in the judgment of the Representatives is advisable, and initially
to offer the Shares on the terms set forth in the Prospectus. The Company
acknowledges and agrees that the Underwriters may offer and sell Shares to or
through any affiliate of an Underwriter and that any such affiliate may offer
and sell Shares purchased by it to or through any Underwriter.
(b) Payment for the Shares shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Representatives in the case of the Underwritten Shares, at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 A.M. New
York City time on May [ ], 2004, or at such other time or place on the same or
such other date, not later than the fifth business day thereafter, as the
Representatives and the Company may agree upon in writing or, in the case of the
Option Shares, on the date and at the time and place specified by the
Representatives in the written notice of the Underwriters' election to purchase
such Option Shares. The time and date of such payment for the Underwritten
Shares are referred to herein as the "Closing Date" and the time and date for
such payment for the Option Shares, if other than the Closing Date, are herein
referred to as the "Additional Closing Date".
Payment for the Shares to be purchased on the Closing Date or
the Additional Closing Date, as the case may be, shall be made against delivery
to the Representatives for the respective accounts of the several Underwriters
of the Shares to be purchased on such date in definitive form registered in such
names and in such denominations as the Representatives shall request in writing
not later than two full business days prior to the Closing Date or the
Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the sale of the Shares duly paid by the Company. The
certificates for the Shares will be made available for inspection and packaging
by the Representatives at the office of ▇.▇. ▇▇▇▇▇▇ Securities Inc. set forth
above not later than 1:00 P.M., New York City time, on the business day prior to
the Closing Date or the Additional Closing Date, as the case may be.
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3. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter as follows:
(a) Preliminary Prospectus. No order preventing or suspending
the use of any Preliminary Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, complied in all material respects with the Securities Act and
did 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; provided that the Company
makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use in any
Preliminary Prospectus.
(b) Registration Statement and Prospectus. No order suspending
the effectiveness of the Registration Statement has been issued by the
Commission and, to the Company's knowledge, no proceeding for that
purpose has been initiated or threatened by the Commission; as of the
applicable effective date of the Registration Statement and any
amendment thereto, the Registration Statement complied and will comply
in all material respects with the Securities Act, and did not and will
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 not misleading; and as of the applicable
filing date of the Prospectus and any amendment or supplement thereto
and as of the Closing Date and as of the Additional Closing Date, as
the case may be, the Prospectus will 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; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance
upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement and the
Prospectus and any amendment or supplement thereto.
(c) Incorporated Documents. The documents included or
incorporated by reference in the Prospectus, when filed with the
Commission, conformed or will conform, as the case may be, in all
material respects to the requirements of the Exchange Act, and did not
and will 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.
(d) Financial Statements. The historical financial statements
and the related notes thereto included or incorporated by reference in
the Registration
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Statement and Prospectus present fairly the financial position of the
Company and its subsidiaries as of the dates indicated and the results
of their operations and the changes in their cash flows for the periods
specified; such historical financial statements have been prepared in
conformity with United States generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby
(subject, in the case of interim historical financial statements, to
all normal, recurring year-end adjustments); and the other financial
information included or incorporated by reference in the Registration
Statement and Prospectus relating to the Company and its subsidiaries
has been derived from the accounting records of the Company and its
subsidiaries and presents fairly the information shown thereby; and the
pro forma financial information and the related notes thereto included
in the Registration Statement and Prospectus have been prepared in
accordance with the Commission's rules and guidance with respect to pro
forma financial information, and the assumptions underlying such pro
forma financial information are reasonable and are, in all material
respects, set forth in the Registration Statement and Prospectus.
(e) No Material Adverse Change. Since the date of the most
recent financial statements of the Company included or incorporated by
reference in the Registration Statement and Prospectus, (i) there has
not been any material decrease in the authorized or issued and
outstanding capital stock or any increase in long-term debt of the
Company or any of its subsidiaries, or any dividend or distribution of
any kind declared, set aside for payment, paid or made by the Company
on any class of its capital stock, or any material adverse change, or
any development that could reasonably be expected to involve a
prospective material adverse change, in the business, properties,
financial position or results of operations of the Company and its
subsidiaries taken as a whole; (ii) except in the ordinary course of
business, neither the Company nor any of its subsidiaries has entered
into any transaction or agreement that is material to the Company and
its subsidiaries taken as a whole or incurred any liability or
obligation, direct or contingent, that is material to the Company and
its subsidiaries taken as a whole; and (iii) neither the Company nor
any of its subsidiaries has sustained any material loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor disturbance or
dispute or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, except in each case as otherwise
disclosed in the Registration Statement and Prospectus.
(f) Organization and Good Standing. The Company and each of
its subsidiaries have been duly organized and are validly existing and
in good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority
(corporate and other) necessary to own or hold their respective
properties and to
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conduct the businesses in which they are engaged, except where the
failure to be so qualified or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the
business, properties, financial position, results of operations or
business prospects of the Company and its subsidiaries taken as a whole
(a "Material Adverse Effect"). The subsidiaries listed in Schedule 3 to
this Agreement are the only significant subsidiaries of the Company.
(g) Capitalization. The Company has an authorized
capitalization as set forth in the Prospectus under the heading
"Capitalization"; all the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable and are not subject to any pre-emptive or
similar rights; except as described in or expressly contemplated by the
Prospectus, including, without limitation, the historical consolidated
financial statements of the Company incorporated by reference therein,
there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, at the option of the holder, any
shares of capital stock or other equity interest in the Company or any
of its subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of
any capital stock of the Company or any such subsidiary, any such
convertible or exchangeable securities or any such rights, warrants or
options; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Registration
Statement and the Prospectus. Except in the case of any foreign
subsidiary, for directors' qualifying shares and equity interests held
by any other party to a joint venture or similar arrangement governing
such foreign subsidiary, all the outstanding shares of capital stock or
other equity interests of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear of
any lien, charge, encumbrance, security interest (except for rights to
acquire Common Stock issued in the ordinary course of business pursuant
to the Company's equity incentive plans since March 31, 2004),
restriction on voting or transfer or any other claim of any third
party, except as disclosed in or contemplated by the Prospectus
(h) Due Authorization. The Company has all requisite corporate
right, power and authority to execute and deliver this Agreement and to
perform its obligations hereunder; and all corporate action required to
be taken for the due and proper authorization, execution and delivery
of this Agreement by the Company and the consummation of the
transactions contemplated hereby has been duly and validly taken.
(i) Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
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(j) The Shares. The Shares to be issued and sold by the
Company hereunder have been duly authorized by the Company and, when
issued and delivered and paid for as provided herein, will be duly and
validly issued and will be fully paid and nonassessable and will
conform to the descriptions thereof in the Prospectus; and the issuance
of the Shares is not subject to any preemptive or similar rights. The
Rights Agreement has been duly authorized, executed and delivered by
the Company and, assuming its due execution and delivery by each other
party thereto, constitutes a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or by
equitable principles relating to enforceability; and the Rights have
been duly authorized by the Company and, when issued upon issuance of
the Shares, will be validly issued, and the common stock to be issued
upon exercise of the Rights has been duly authorized by the Company and
validly reserved for issuance upon the exercise in accordance with the
terms oft he Rights Agreement, will be validly issued, fully paid and
non-assessable.
(k) No Violation or Default. Neither the Company nor any of
its subsidiaries is (i) in violation of its charter or by-laws or
similar organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance by them of any
term, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject; or (iii)
in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory
authority applicable to them, except, in the case of clauses (ii) and
(iii) above, for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
(l) No Conflicts. The execution, delivery and performance by
the Company of this Agreement, the issuance and sale of the Shares and
compliance by the Company with the terms thereof and the consummation
by it of the transactions contemplated by this Agreement, in the case
of the execution, delivery and performance of this Agreement by the
Company, on the date hereof, and each other case, on the dates
contemplated by this Agreement and the Registration Statement and
Prospectus, did not and will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject,
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(ii) result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Company or any of
its subsidiaries or (iii) result in the violation of any law or statute
or any judgment, order, rule or regulation of any court or arbitrator
or governmental or regulatory authority applicable to them, except, in
the case of clauses (i) and (iii) above, for any such conflict, breach
or violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(m) No Consents Required. No consent, approval, authorization,
filing, order, registration or qualification of or with any court or
arbitrator or governmental or regulatory authority is or was (at the
time thereof) required for the execution, delivery and performance by
the Company of this Agreement, the issuance and sale of the Shares and
compliance by the Company with the terms thereof and the consummation
of the transactions contemplated by this Agreement, except for such
consents, approvals, authorizations, orders and registrations or
qualifications (i) as may be required under applicable state securities
laws in connection with the purchase and distribution of the Shares by
the Underwriters, (ii) the failure to obtain which would not have a
Material Adverse Effect or materially adversely affect the consummation
of the transactions contemplated by this Agreement or (iii) such
consents as have been obtained prior to the date hereof under the
Securities Act and from the New York Stock Exchange and National
Association of Securities Dealers, Inc.
(n) Legal Proceedings. Except as described in the Prospectus,
there are no legal, governmental or regulatory actions, suits or
proceedings pending, and to the Company's best knowledge there are no
legal, governmental or regulatory investigations pending, to which the
Company or any of its subsidiaries is or may be a party or to which any
property of the Company or any of its subsidiaries is or may be the
subject that, individually or in the aggregate, if determined adversely
to the Company or any of its subsidiaries, could reasonably be expected
to have a Material Adverse Effect or could interfere with or adversely
affect the right, power or ability of the Company to perform its
obligations under this Agreement or to consummate the transactions
contemplated by the Registration Statement and Prospectus; to the best
knowledge of the Company, no such investigations, actions, suits or
proceedings are threatened or contemplated by any governmental or
regulatory authority or threatened by others and (i) there are no
pending legal, governmental or regulatory actions, suits or proceedings
that are required under the Securities Act to be described in the
Prospectus that are not so described and (ii) there are no statutes,
regulations, contracts or other documents that are required under the
Securities Act to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus that are not
so filed or described.
(o) Independent Accountants. To the Company's best knowledge,
Deloitte & Touche LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent certified public
accountants with
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respect to the Company and its subsidiaries within the meaning of Rule
101 of the Code of Professional Conduct of the American Institute of
Certified Public Accountants and its interpretations and rulings
thereunder ("Independent Accountants"). To the Company's best
knowledge, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain financial
statements of the Company and its subsidiaries, were Independent
Accountants with respect to the Company and its subsidiaries at the
time they were the Company's accountants.
(p) Title to Real and Personal Property. The Company and its
subsidiaries have good and marketable title in fee simple to, or have
valid rights to lease or otherwise use, all items of real and personal
property that are material to the respective businesses of the Company
and its subsidiaries, in each case free and clear of all Liens and
defects and imperfections of title except those Liens which (x) do not
materially interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries, (y) could not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect or (z) are disclosed in the Prospectus.
(q) Title to Intellectual Property. Except as could not
reasonably be expected to have a Material Adverse Effect, (i) the
Company and its subsidiaries own or possess adequate rights to use all
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service ▇▇▇▇ registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) ("Intellectual Property") necessary for the conduct of
their respective businesses, (ii) the conduct of their respective
businesses does not conflict in any material respect with any such
rights of others, and (iii) the Company and its subsidiaries have not
received any notice of any claim of infringement of or conflict with
any such rights of others.
(r) Investment Company Act. Neither the Company nor any of its
subsidiaries is, and after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described in
the Prospectus none of them will be, an "investment company" or an
entity "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, "Investment
Company Act").
(s) Taxes. Each of the Company and its subsidiaries has filed
all tax returns required to be filed through the date hereof, which
filed returns are complete and correct in all material respects and
neither the Company nor any of its subsidiaries is in default in the
payment of any taxes which were due and payable pursuant to said
returns or any due and payable assessments with respect thereto, except
(i) as disclosed in the Registration Statement and Prospectus or (ii)
for such failures to file or defaults in payment of a character which
would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
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(t) Licenses and Permits. The Company and its subsidiaries
possess all licenses, certificates, permits and other authorizations
issued by, and have made all declarations and filings with, the
appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses as
described in the Registration Statement and Prospectus, except where
the failure to possess or make the same would not, individually or in
the aggregate, have a Material Adverse Effect. Except as described in
the Registration Statement and Prospectus, neither the Company nor any
of its subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or authorization
or has any reason to believe that any such license, certificate, permit
or authorization will not be renewed in the ordinary course.
(u) No Labor Disputes. No material labor disturbance by or
dispute with employees of the Company or any of its subsidiaries exists
or, to the best knowledge of the Company, is contemplated or
threatened.
(v) Compliance With Environmental Laws. The Company and its
subsidiaries (i) are in compliance with any and all applicable federal,
state, local and foreign laws, rules, regulations, decisions and orders
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses, and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except in any such case for any such
failure to comply with, or failure to receive required permits,
licenses or approvals, or liability, as (i) is disclosed in the
Registration Statement and Prospectus, or (ii) would not, individually
or in the aggregate reasonably be expected to have a Material Adverse
Effect.
(w) Compliance With ERISA. Each employee benefit plan, within
the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), that is maintained, administered or
contributed to by the Company or any of its affiliates for employees or
former employees of the Company and its affiliates has been maintained
in all material respects in compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of
1986, as amended (the "Code"); and no prohibited transaction, within
the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any such plan excluding transactions effected
pursuant
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to a statutory or administrative exemption. Each of the Company and its
subsidiaries has fulfilled its obligations, if any, under the minimum
funding standards of Section 302 of ERISA. The Company and its
subsidiaries have not incurred, and are not reasonably expected to
incur, any material unpaid liability to the Pension Benefit Guaranty
Corporation (other than for payment of premiums in the ordinary course)
or to any such employee benefit plan under Title IV of ERISA (other
than for payment of contributions in the ordinary course).
(x) Accounting Controls. The Company and its subsidiaries
maintain systems of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(y) Insurance. The Company and its subsidiaries have insurance
covering their respective properties, operations, personnel and
businesses, including business interruption insurance, which insurance
is in amounts and insures against such losses and risks as are
customary for a similarly situated company in the Company's industry;
and neither the Company nor any of its subsidiaries has (i) received
notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made
in order to continue such insurance or (ii) any reason to believe that
it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable
cost from similar insurers as may be necessary to continue its
business.
(z) No Unlawful Payments. Neither the Company nor any of its
subsidiaries nor, to the best knowledge of the Company, any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries has: (i) used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or
is in violation of any provision of the Foreign Corrupt Practices Act
of 1977; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(aa) Solvency. On and immediately after the Closing Date, the
Company (after giving effect to the issuance of the Shares and the
other transactions related thereto as described in the Prospectus) will
be Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular
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date, that on such date (i) the present fair market value (or present
fair saleable value) of the assets of the Company is not less than the
total amount required to pay the liabilities of the Company on its
total existing debts and liabilities (including contingent liabilities)
as they become absolute and matured; (ii) the Company is able to pay
its debts and other liabilities, contingent obligations and commitments
as they mature and become due in the normal course of business; (iii)
assuming consummation of the issuance of the Shares as contemplated by
this Agreement and the Registration Statement and Prospectus, the
Company is not incurring debts or liabilities beyond its ability to pay
as such debts and liabilities mature; (iv) the Company is not engaged
in any business or transaction, and does not propose to engage in any
business or transaction, for which its property would constitute
unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which the Company is engaged;
and (v) the Company is not otherwise insolvent under the standards set
forth in applicable laws.
(bb) No Restrictions on Subsidiaries. No subsidiary of the
Company is currently prohibited, directly or indirectly, under any
agreement or other instrument to which it is a party or is subject,
from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary's properties or assets to the
Company or any other subsidiary of the Company, except as disclosed in
the Prospectus.
(cc) No Broker's Fees. Neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding
with any person (other than this Agreement) that would give rise to a
valid claim against any of them or any Underwriter for a brokerage
commission, finder's fee or like payment in connection with the
offering and sale of the Shares.
(dd) No Registration Rights. No person has the right to
require the Company or any of its subsidiaries to register any
securities for sale under the Securities Act by reason of the filing of
the Registration Statement with the Commission or the issuance and sale
of the Shares to be sold by the Company hereunder.
(ee) No Stabilization. The Company has not taken, directly or
indirectly, any action designed to or that could reasonably be expected
to cause or result in any stabilization or manipulation of the price of
the Shares.
(ff) Margin Rules. Neither the issuance, sale and delivery of
the Shares nor the application of the proceeds thereof by the Company
as described in the Registration Statement and Prospectus will violate
Regulation T, U or X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board of Governors.
-12-
(gg) Forward-Looking Statements. No forward-looking statement
(within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act) contained in and the Registration Statement
and Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(hh) Statistical and Market Data. Nothing has come to the
attention of the Company that has caused the Company to believe that
the statistical and market-related data included or incorporated by
reference in the Registration Statement and Prospectus is not based on
or derived from sources that are reliable and accurate in all material
respects.
4. Further Agreements of the Company. The Company covenants
and agrees with each Underwriter as follows:
(a) Effectiveness of the Registration Statement. The Company
will use its reasonable best efforts to cause the Registration
Statement to become effective at the earliest possible time and, if
required, will file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the
Securities Act and to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; and the Company will furnish copies of
the Prospectus to the Underwriters in New York City prior to 10:00
A.M., New York City time, on the Business Day next succeeding the date
of this Agreement in such quantities as the Representatives may
reasonably request.
(b) Delivery of Copies. The Company will deliver, without
charge, (i) to the Representatives, two signed copies of the
Registration Statement as originally filed and each amendment thereto,
in each case including all exhibits and consents filed therewith and
documents incorporated by reference therein; and (ii) to each
Underwriter (A) a conformed copy of the Registration Statement as
originally filed and each amendment thereto (without exhibits) and (B)
during the Prospectus Delivery Period, as many copies of the Prospectus
(including all amendments and supplements thereto and documents
incorporated by reference therein, but excluding exhibits) as the
Representatives may reasonably request. As used herein, the term
"Prospectus Delivery Period" means such period of time after the first
date of the public offering of the Shares as in the opinion of counsel
for the Underwriters a prospectus relating to the Shares is required by
law to be delivered in connection with sales of the Shares by any
Underwriter or dealer.
(c) Amendments or Supplements. Before making or distributing
any amendment or supplement to the Registration Statement or
Prospectus, whether before or after the time that the Registration
Statement becomes effective, or
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filing with the Commission any document that will be incorporated by
reference therein, the Company will furnish to the Representatives and
counsel for the Underwriters a copy of the proposed amendment or
supplement or document to be incorporated by reference therein for
review, and the Company will not distribute or cause to be distributed
any such proposed amendment or supplement or file any such document
with the Commission to which the Representatives reasonably objects.
(d) Notice to the Representatives. The Company will advise the
Representatives promptly, and confirm such advice in writing: (i) when
the Registration Statement has become effective; (ii) when any
amendment to the Registration Statement has been filed or becomes
effective; (iii) when any supplement to the Prospectus or any amendment
to the Prospectus has been filed; (iv) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or the receipt of any comments from the
Commission relating to the Registration Statement or any other request
by the Commission for any additional information; (v) of the issuance
by the Commission of any order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or, if the Company has
knowledge of it, the initiation or threatening of any proceeding for
that purpose; (vi) of the occurrence of any event within the Prospectus
Delivery Period as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Prospectus
is delivered to a purchaser, not misleading; and (vii) of the receipt
by the Company of any notice with respect to any suspension of the
qualification of the Shares for offer and sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose; and
the Company will use its reasonable best efforts to prevent the
issuance of any such order suspending the effectiveness of the
Registration Statement, preventing or suspending the use of the
Prospectus or suspending any such qualification of the Shares and, if
any such order is issued, will use its reasonable best efforts to
obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Prospectus. If at any time
during the Prospectus Delivery Period (i) any event shall occur or
condition shall exist as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances existing when the Prospectus is delivered to
a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Prospectus to comply with law, the Company will
immediately notify the Underwriters thereof and forthwith prepare and,
subject to paragraph (c) above, file with the Commission and furnish to
the Underwriters such amendments or supplements to the Prospectus (or
any document to be filed with the Commission
-14-
and incorporated by reference therein) as may be necessary so that the
statements in the Prospectus as so amended or supplemented (or
including such document to be incorporated by reference therein) will
not, in the light of the circumstances existing when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will
comply with law.
(f) Blue Sky Compliance. The Company will cooperate with the
Underwriters to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and will continue such
qualifications in effect so long as required for the distribution of
the Shares; provided that the Company shall not be required to (i)
qualify as a foreign corporation or other entity or as a dealer in
securities in any such jurisdiction where it would not otherwise be
required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in
any such jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally
available to its security holders and the Representatives as soon as
practicable an earning statement that satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least twelve months
beginning with the first fiscal quarter of the Company occurring after
the "effective date" (as defined in Rule 158) of the Registration
Statement.
(h) Clear Market. During the period from the date hereof
through and including the date that is 90 days after the date hereof,
the Company will not, without the prior written consent of each of the
Representatives, (i) offer, pledge, announce the intention to sell,
sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Stock or any securities convertible into or
exercisable or exchangeable for Stock or (ii) enter into any swap or
other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Stock or such other securities, in cash or otherwise,
without the prior written consent of the Representatives, other than
(A) the Shares to be sold hereunder, (B) any shares of Stock of the
Company issued upon the exercise of options or settlement of other
awards granted under the Company's existing stock option [or equity
incentive plans or the option granted by the Company in favor of ▇▇▇▇▇
▇▇▇▇▇▇▇ & Co.] and (C) the granting of awards under the Company's
existing stock option, and equity incentive plans in amounts not to
exceed the amount described in the Prospectus as available for grant
under those plans.
-15-
(i) Use of Proceeds. The Company will apply the net proceeds
from the sale of the Shares as described in the Prospectus under the
heading "Use of Proceeds".
(j) No Stabilization. The Company will not take, directly or
indirectly, any action designed to or that could reasonably be expected
to cause or result in any stabilization or manipulation of the price of
the Shares.
(k) Exchange Listing. The Company will use its reasonable best
efforts to list, subject to notice of issuance, the Shares on the New
York Stock Exchange (the "Exchange").
(l) Reports. So long as the Shares are outstanding, the
Company will furnish to the Representatives, as soon as they are
available, copies of all reports or other communications (financial or
other) furnished to holders of the Shares, and copies of any reports
and financial statements furnished to or filed with the Commission or
any national securities exchange or automatic quotation system;
provided, however, in no event shall the Company be required to furnish
copies of any such documents which are filed and publicly accessible
via the ▇▇▇▇▇ database.
5. Conditions of Underwriters' Obligations. The obligation of
each Underwriter to purchase Underwritten Shares on the Closing Date or the
Option Shares on the Additional Closing Date, as the case may be, as provided
herein is subject to the performance by the Company of its covenants and other
obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. The Registration
Statement (or if a post-effective amendment thereto is required to be
filed under the Securities Act, such post-effective amendment) shall
have become effective, and the Representatives shall have received
notice thereof, not later than 5:00 P.M., New York City time, on the
date hereof; no order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceeding for such purpose shall
be pending before or threatened by the Commission; the Prospectus shall
have been timely filed with the Commission under the Securities Act and
in accordance with Section 4(a) hereof; and all requests by the
Commission for additional information shall have been complied with to
the reasonable satisfaction of the Representatives.
(b) Representations and Warranties. The representations and
warranties of the Company contained herein shall be true and correct on
the date hereof and on and as of the Closing Date or the Additional
Closing Date, as the case may be; and the statements of the Company and
its officers made in any certificates delivered pursuant to this
Agreement shall be true and correct on and as of the Closing Date or
the Additional Closing Date, as the case may be.
-16-
(c) No Downgrade. Subsequent to the execution and delivery of
this Agreement, (i) no downgrading shall have occurred in the rating
accorded any debt securities or preferred stock issued or guaranteed by
the Company or any of its subsidiaries by any "nationally recognized
statistical rating organization", as such term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) no such organization shall have publicly announced that it has
under surveillance or review, or has changed its outlook with respect
to, its rating of any debt securities or preferred stock issued or
guaranteed by the Company (other than an announcement with positive
implications of a possible upgrading).
(d) No Material Adverse Change. Subsequent to the execution
and delivery of this Agreement, no event or condition of a type
described in Section 3(e) hereof shall have occurred or shall exist,
which event or condition is not described in the Prospectus (excluding
any amendment or supplement thereto or any document filed with the
Commission after the date hereof and incorporated by reference therein)
and the effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the offering, sale or
delivery of the Shares on the Closing Date or the Additional Closing
Date, as the case may be, on the terms and in the manner contemplated
by this Agreement and the Prospectus.
(e) Officer's Certificate. The Representatives shall have
received on and as of the Closing Date or the Additional Closing Date,
as the case may be, a certificate of an executive officer of the
Company who has knowledge of the Company's financial matters and is
satisfactory to the Representatives (i) confirming that such officer
has carefully reviewed the Prospectus and, to the best knowledge of
such officer, the representation set forth in Section 3(a) hereof is
true and correct, (ii) confirming that the other representations and
warranties of the Company in this Agreement are true and correct and
that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date or the Additional Closing Date, as the case
may be, and (iii) to the effect set forth in paragraph (d) above.
(f) Comfort Letters. On the date of this Agreement and on the
Closing Date or the Additional Closing Date, as the case may be,
Deloitte & Touche LLP shall have furnished to the Representatives, at
the request of the Company, letters, dated the respective dates of
delivery thereof and addressed to the Underwriters, in the form and
substance consistent with drafts of such letters previously provided to
the Representatives by Deloitte & Touche LLP prior to the date hereof;
provided that the letter delivered on the Closing Date or the
Additional Closing Date, as the case may be, shall use a "cut-off" date
no more than three business days prior to the Closing Date or the
Additional Closing Date, as the case may be.
-17-
(g) Opinion of Counsel for the Company. Mayer, Brown, ▇▇▇▇ &
Maw, LLP, counsel for the Company, shall have furnished to the
Representatives, at the request of the Company, their written opinion,
dated the Closing Date or the Additional Closing Date, as the case may
be, and addressed to the Underwriters, in form and substance reasonably
satisfactory to the Representatives, to the effect set forth in Annex A
hereto.
(h) Opinion of Counsel for the Underwriters. The
Representatives shall have received on and as of the Closing Date or
the Additional Closing Date, as the case may be, an opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, with respect to
such matters as the Representatives may reasonably request, and such
counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(i) No Legal Impediment to Issuance. No action shall have been
taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date
or the Additional Closing Date, as the case may be, prevent the
issuance or sale of the Shares; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as
of the Closing Date or the Additional Closing Date, as the case may be,
prevent the issuance or sale of the Shares.
(j) Good Standing. The Representatives shall have received on
and as of the Closing Date or the Additional Closing Date, as the case
may be, satisfactory evidence of the good standing of the Company and
its material subsidiaries in their respective jurisdictions of
organization and their good standing in such other jurisdictions as the
Representatives may reasonably request, in each case in writing or any
standard form of telecommunication, from the appropriate governmental
authorities of such jurisdictions.
(k) Exchange Listing. The Shares to be delivered on the
Closing Date or Additional Closing Date, as the case may be, shall have
been approved for listing on the New York of Stock Exchange, subject to
official notice of issuance.
(l) Lock-up Agreements. The "lock-up" agreements, each
substantially in the form of Annex B hereto, between you and the
officers and directors of the Company named in the Prospectus under
"Management" relating to sales and certain other dispositions of shares
of Stock or certain other securities, delivered to you on or before the
date hereof, shall be full force and effect on the Closing Date or the
Additional Closing Date, as the case may be.
(m) Additional Documents. On or prior to the Closing Date or
the Additional Closing Date, as the case may be, the Company shall have
furnished
-18-
to the Representatives such further certificates and documents as the
Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
6. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter, its affiliates, directors and
officers and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, reasonable legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted, as such
fees and expenses are incurred), joint or several, arising out of, or based on,
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (or any amendment or supplement
thereto) or any Preliminary Prospectus (or any amendment or supplement thereto)
or any omission or alleged omission to state therein 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, except
insofar as such losses, claims, damages or liabilities arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein.
(b) Indemnification of the Company. Each Underwriter agrees,
severally and not jointly, to indemnify and hold harmless the Company, each of
its officers and directors and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the indemnity set forth in paragraph (a)
above, but only with respect to any losses, claims, damages or liabilities that
arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or any Preliminary Prospectus, it being understood and agreed that the
only such information consists of the following: [ ].
(c) Notice and Procedures. If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such person (the
"Indemnified Person")
-19-
shall promptly notify the person against whom such indemnification may be sought
(the "Indemnifying Person") in writing; provided that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have
under this Section 6 except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses) by such failure; and
provided, further, that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have to an Indemnified Person
otherwise than under this Section 6. If any such proceeding shall be brought or
asserted against an Indemnified Person and it shall have notified the
Indemnifying Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others entitled to indemnification pursuant to this Section 6
that the Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying Person and
the Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for any Underwriter,
its affiliates, directors and officers and any control persons of such
Underwriter shall be designated in writing by the Representatives and any such
separate firm for the Company and any control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment to the extent provided therein or herein. Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested that an
Indemnifying Person reimburse the Indemnified Person for reasonable fees and
expenses of counsel as contemplated by this paragraph, the Indemnifying Person
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 60 days after
receipt by the Indemnifying Person of such request and (ii) the Indemnifying
Person shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement. No Indemnifying Person shall,
without the written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in
-20-
respect of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified Person,
unless such settlement (x) includes an unconditional release of such Indemnified
Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (y) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d) Contribution. If the indemnification provided for in
paragraphs (a) and (b) above is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received
by the Company from the sale of the Shares and the total discounts and
commissions received by the Underwriters in connection therewith, as provided in
this Agreement, bear to the aggregate offering price of the Shares. The relative
fault of the Company on the one hand and the Underwriters on the other 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 the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(e) Limitation on Liability. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 6 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in paragraph
(d) above shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses incurred by such Indemnified
Person in connection with any such action or claim. Notwithstanding the
provisions of this Section 6, in no event shall an Underwriter be required to
contribute any amount in excess of the amount by which the total discounts and
commissions received by such Underwriter with respect to the offering of the
Shares exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by
-21-
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 6 are several
in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any Indemnified Person at law or in equity.
7. Effectiveness; Termination. This Agreement shall become
effective upon the later of (i) the execution and delivery hereof by the parties
hereto and (ii) receipt by the Company and the Representatives of notice of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment thereto). This Agreement may be terminated in the
absolute discretion of the Representatives, by notice to the Company, if after
the execution and delivery of this Agreement and prior to the Closing Date or
the Additional Closing Date, as the case may be, (i) trading generally shall
have been suspended or materially limited on the New York Stock Exchange or the
over-the-counter market; (ii) trading of any securities issued or guaranteed by
the Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) a general moratorium on commercial banking activities shall have
been declared by federal or New York State authorities; or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis, either within or outside the United States,
that, in the judgment of the Representatives, is material and adverse and makes
it impracticable or inadvisable to proceed with the offering, sale or delivery
of the Shares on the Closing Date or the Additional Closing Date, as the case
may be, on the terms and in the manner contemplated by this Agreement and the
Prospectus.
8. Defaulting Underwriter. (a) If, on the Closing Date or the
Additional Closing Date, as the case may be, any Underwriter defaults on its
obligation to purchase the Shares that it has agreed to purchase hereunder, the
non-defaulting Underwriters may in their discretion arrange for the purchase of
such Shares by other persons satisfactory to the Company on the terms contained
in this Agreement. If, within 36 hours after any such default by any
Underwriter, the non-defaulting Underwriters do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of 36 hours
within which to procure other persons satisfactory to the non-defaulting
Underwriters to purchase such Shares on such terms. If other persons become
obligated or agree to purchase the Shares of a defaulting Underwriter, either
the non-defaulting Underwriters or the Company may postpone the Closing Date or
the Additional Closing Date, as the case may be, for up to five full business
days in order to effect any changes that in the opinion of counsel for the
Company or counsel for the Underwriters may be necessary in the Registration
Statement and the Prospectus or in any other document or arrangement, and the
Company agrees to promptly prepare any amendment or supplement to the
Registration Statement and the Prospectus that
-22-
effects any such changes. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the context otherwise
requires, any person not listed in Schedule 1 hereto that, pursuant to this
Section 8, purchases Shares that a defaulting Underwriter agreed but failed to
purchase.
(a) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriters and the Company as provided in paragraph (a) above,
the aggregate principal amount of such Shares that remains unpurchased on the
Closing Date or the Additional Closing Date, as the case may be, does not exceed
one-eleventh of the aggregate principal amount of all the Shares, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the principal amount of Shares that such Underwriter agreed to purchase
hereunder plus such Underwriter's pro rata share (based on the principal amount
of Shares that such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriters and the Company as provided in paragraph (a) above,
the aggregate principal amount of such Shares that remains unpurchased exceeds
or is equal to one-eleventh of the aggregate principal amount of all the Shares,
or if the Company shall not exercise the right described in paragraph (b) above,
then this Agreement or, with respect to any Additional Closing Date, the
obligation of the Underwriters to purchase Shares on the Additional Closing
Date, as the case may be, shall terminate without liability on the part of the
non-defaulting Underwriters. Any termination of this Agreement pursuant to this
Section 8 shall be without liability on the part of the Company, except that the
Company will continue to be liable for the payment of expenses as set forth in
Section 9 hereof and except that the provisions of Section 6 and Section 8(d)
hereof shall not terminate and shall remain in effect.
(c) Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company or any non-defaulting
Underwriter for damages caused by its default.
9. Payment of Expenses. (a) Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company agrees to pay or cause to be paid all costs and expenses incident to
the performance of its obligations hereunder, including without limitation, (i)
the costs incident to the authorization, issuance, sale, preparation and
delivery of the Shares and any taxes payable in that connection; (ii) the costs
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement, any Preliminary Prospectus and the Prospectus (including
all exhibits and any amendment or supplement thereto) and the distribution
thereof; (iii) the costs of preparing, reproducing and distributing this
Agreement; (iv) the fees and expenses of the Company's counsel (including local
and special counsel) and independent accountants; (v) the reasonable fees and
expenses
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incurred in connection with the registration or qualification and determination
of eligibility for investment of the Shares under the laws of such jurisdictions
as the Representatives may designate and the preparation, printing and
distribution of a Blue Sky Memorandum (including the reasonable related fees and
expenses of counsel for the Underwriters); (vi) any fees charged by rating
agencies for rating the Shares; (vii) the fees and expenses of any transfer
agent and registrar; (viii) the cost of preparing stock certificates; (ix) all
expenses and application fees incurred in connection with any filing with, and
clearance of the offering by, the National Association of Securities Dealers,
Inc.; (x) all expenses and application fees related to the listing of the Shares
on the New York Stock Exchange; and (xi) all expenses incurred by the Company in
connection with any "road show" presentation to potential investors.
(b) If (i) the purchase and sale of the Shares hereunder is
not consummated because any condition to the obligations of the Underwriters set
forth in Section 5 is not satisfied, (ii) this Agreement is terminated pursuant
to Section 7(ii), (iii) the Company for any reason fails to tender the Shares
for delivery to the Underwriters other than as a result of a breach of this
Agreement by the Underwriters or (iv) the Underwriters decline to purchase the
Shares for any reason permitted under this Agreement other than for termination
of this Agreement under Section 7(i), (iii) and (iv), the Company agrees to
reimburse the Underwriters for all out-of-pocket costs and expenses (including
the fees and expenses of their counsel) reasonably incurred by the Underwriters
in connection with this Agreement and the offering contemplated hereby.
10. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and any controlling persons referred to herein, the
affiliates, officers and directors of each Underwriter, and the officers and
directors of the Company. Nothing in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor
merely by reason of such purchase.
11. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company, and the
Underwriters contained in this Agreement or made by or on behalf of the Company,
the Underwriters pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Shares and
shall remain in full force and effect, regardless of any termination of this
Agreement or any investigation made by or on behalf of the Company or the
Underwriters.
12. Certain Defined Terms. For purposes of this Agreement, (a)
except where otherwise expressly provided, the term "affiliate" has the meaning
set forth in Rule 405 under the Securities Act; (b) the term "business day"
means any day other than a day on which banks are permitted or required to be
closed in New York City; (c) the term "subsidiary" has the meaning set forth in
Rule 405 under the Securities Act;
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and (d) the term "significant subsidiary" has the meaning set forth in Rule 1-02
of Regulation S-X under the Exchange Act.
13. Miscellaneous.
(a) Authority of the Representatives. Any action by the
Underwriters hereunder may be taken by ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of
the Underwriters, and any such action taken by ▇.▇. ▇▇▇▇▇▇ Securities Inc. shall
be binding upon the Underwriters and the Company may rely thereon without
independent investigation or verification thereof.
(b) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted and confirmed by any standard form of telecommunication. Notices to
the Underwriters shall be given to the Representatives c/o ▇.▇. ▇▇▇▇▇▇
Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax: (212) [ ]);
Attention: [ ] and c/o Citigroup Global Markets Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax: (212) [ ]); Attention: [ ]. Notices to the
Company shall be given to them at Tenneco Automotive Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: General
Counsel.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts
(which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which together
shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any
provision of this Agreement, nor any consent or approval to any departure
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
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If the foregoing is in accordance with your understanding,
please indicate your acceptance of this Agreement by signing in the space
provided below.
Very truly yours,
TENNECO AUTOMOTIVE INC.
By
--------------------------
Title:
Accepted: May [ ], 2004
Accepted as of the date hereof:
▇.▇. ▇▇▇▇▇▇ Securities Inc.
By:
-------------------------------------
Authorized Signatory
Citigroup Global Markets Inc.
By:
-------------------------------------
Authorized Signatory
On behalf of each of the Underwriters
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