AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
DATED AS OF
JUNE 19, 1996
AMONG
EL PASO NATURAL GAS COMPANY,
EL PASO MERGER COMPANY
AND
TENNECO INC.
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS................................................. 2
ARTICLE II THE MERGER.................................................. 7
2.1 Merger...................................................... 7
2.2 Effects of the Merger....................................... 7
2.3 Certificate of Incorporation and Bylaws..................... 8
2.4 Directors................................................... 8
2.5 Conversion of Shares........................................ 8
2.6 Exchange of Certificates.................................... 9
2.7 New Preferred Stock......................................... 11
ARTICLE III CLOSING AND FILING.......................................... 11
3.1 Closing..................................................... 11
3.2 Effective Time.............................................. 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TENNECO................... 12
4.1 Organization and Existence.................................. 12
4.2 Capitalization.............................................. 12
4.3 Authority and Approval...................................... 12
4.4 Financial Statements........................................ 13
4.5 Consents and Approvals; No Violations....................... 13
4.6 Litigation.................................................. 14
4.7 Tenneco SEC Documents; Accuracy of Information.............. 14
4.8 No Material Adverse Effect.................................. 14
4.9 Advisors.................................................... 14
4.10 Opinion of Financial Advisor................................ 14
4.11 Amendments to Rights Agreement.............................. 15
ARTICLE V REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND SUBSIDIARY... 15
5.1 Organization and Existence.................................. 15
5.2 Capitalization.............................................. 15
5.3 Authority and Approval...................................... 16
5.4 Financial Statements........................................ 16
5.5 Consent and Approvals; No Violation......................... 16
5.6 Litigation.................................................. 17
5.7 Acquiror SEC Documents; Accuracy of Information............. 17
5.8 No Material Adverse Effect.................................. 17
5.9 Advisors.................................................... 17
5.10 Opinion of Financial Advisor................................ 17
5.11 Due Authorization........................................... 17
5.12 No Active Business.......................................... 17
5.13 Ownership of Tenneco Stock.................................. 17
ARTICLE VI COVENANTS OF THE PARTIES.................................... 18
6.1 Conduct of Tenneco and its Subsidiaries..................... 18
6.2 Conduct of the Business of Acquiror and its Subsidiaries.... 21
6.3 Access to Information; Confidentiality...................... 22
6.4 Directors' and Officers' Indemnification and Insurance...... 22
6.5 Notification of Certain Matters............................. 24
6.6 Tax Treatment............................................... 25
6.7 Registration Statement; Joint Proxy Statement; NPS
Materials; Tender and Exchange Materials................... 25
i
PAGE
----
6.8 Stockholders' Meetings..................................... 28
6.9 Further Action; Reasonable Best Efforts.................... 28
6.10 Public Announcements....................................... 29
6.11 Listing of Acquiror Common Stock and Depositary Shares..... 30
6.12 Rights Agreement........................................... 30
6.13 The Spinoffs............................................... 30
6.14 Antitrust Matters.......................................... 30
6.15 Employee Matters........................................... 31
6.16 Debt Realignment........................................... 31
6.17 No Solicitations........................................... 31
6.18 Performance of Agreement and Distribution Agreement........ 31
6.19 Affiliates of Tenneco...................................... 32
6.20 Antitakeover Statutes...................................... 32
6.21 Equity Issuance by Acquiror................................ 32
6.22 Ruhrgas AG................................................. 32
6.23 Additional Covenants of Acquiror........................... 32
ARTICLE VII CONDITIONS PRECEDENT....................................... 34
Conditions to Obligations of Each Party to Effect the
7.1 Merger..................................................... 34
Additional Conditions to Obligations of Acquiror and
7.2 Subsidiary................................................. 35
7.3 Additional Conditions to Obligations of Tenneco............ 36
ARTICLE VIII TERMINATION................................................ 36
8.1 Grounds for Termination.................................... 36
8.2 Effect of Termination...................................... 38
8.3 Waiver..................................................... 38
ARTICLE IX EXTENT AND SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS.................................. 38
9.1 Scope of Representations................................... 38
9.2 Survival................................................... 38
ARTICLE X MISCELLANEOUS.............................................. 39
10.1 Expenses................................................... 39
10.2 Notices.................................................... 40
10.3 Remedies................................................... 40
10.4 Consent to Amendments...................................... 40
10.5 Successors and Assignors................................... 40
10.6 Severability............................................... 40
10.7 Counterparts............................................... 40
10.8 Descriptive Headings....................................... 40
10.9 No Third-Party Beneficiaries............................... 41
10.10 Entire Agreement........................................... 41
10.11 Construction............................................... 41
10.12 Incorporation of Exhibits.................................. 41
10.13 Governing Law.............................................. 41
ii
EXHIBITS
EXHIBIT A Distribution Agreement
EXHIBIT B Certificate of Designation Respecting Acquiror Preferred Stock
EXHIBIT C Debt Realignment Plan
EXHIBIT D [Intentionally Omitted]
EXHIBIT E Certificate of Designation Respecting New Preferred Stock
EXHIBIT F Pro Forma Financial Information Concerning the Energy Business
EXHIBIT G Certain Permitted Actions, Transactions and Other Matters
EXHIBIT H Text of Section 14 of Article IV of the By-Laws of the
Surviving Corporation
EXHIBIT I Certain Deferred Intercompany Gains
EXHIBIT J Representations in Connection with IRS Ruling Letter
EXHIBIT K Benefits for Employees of the Energy Business
EXHIBIT LGuarantees
EXHIBIT M Form of Rule 145 Letter
EXHIBIT N Form of Jenner & Block Tax Opinion
EXHIBIT O Form of Depositary Agreement
ANNEX 1 Form of Amendment to Tenneco Certificate of Incorporation
iii
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER is entered into as of
June 19, 1996 (the "AGREEMENT EFFECTIVE DATE"), by and among Tenneco Inc., a
Delaware corporation ("TENNECO"), El Paso Natural Gas Company, a Delaware
corporation ("ACQUIROR"), and El Paso Merger Company, a Delaware corporation
and an indirect wholly-owned subsidiary of Acquiror ("SUBSIDIARY").
W I T N E S S E T H:
WHEREAS, the board of directors of Tenneco has approved a plan of
distribution set forth in the form of agreement attached hereto as EXHIBIT A
(which, together with any exhibits, schedules or attachments thereto, is
hereinafter referred to as the "DISTRIBUTION AGREEMENT") which will be entered
into prior to the Effective Time (as defined below) and pursuant to which,
prior to the Effective Time,
(i) Tenneco and its subsidiaries will, through various intercompany
transfers and distributions, restructure, divide and separate their
existing automotive, packaging and shipbuilding businesses so that all of
the assets, liabilities and operations of
(a) the automotive and packaging businesses will be owned, directly
and indirectly, by a wholly-owned subsidiary of Tenneco (the
"INDUSTRIAL SUBSIDIARY"), and
(b) the shipbuilding business will be owned, directly and indirectly,
by a wholly-owned subsidiary of Tenneco (the "SHIPBUILDING
SUBSIDIARY"), and
(ii) all of the shares of capital stock of each of the Industrial
Subsidiary and the Shipbuilding Subsidiary will be distributed on a pro
rata basis as a dividend to the holders of Tenneco's issued and outstanding
common stock (the "SPINOFFS");
WHEREAS, Acquiror (which is the ultimate parent company of its consolidated
group) desires to acquire Tenneco and its direct and indirect subsidiaries
remaining immediately following the Spinoffs pursuant to the merger of
Subsidiary with and into Tenneco (the "MERGER"), with Tenneco surviving as an
indirect subsidiary of Acquiror (the "SURVIVING CORPORATION");
WHEREAS, the respective boards of directors of Acquiror, Subsidiary and
Tenneco, deeming the Merger to be advisable and in the best interests of their
respective stockholders, have authorized and approved the execution and
delivery of this Agreement and the performance of their respective obligations
hereunder;
WHEREAS, for federal income tax purposes, the parties hereto intend that
(i) the Spinoffs will qualify as tax-free distributions within the
meaning of Section 355 of the Internal Revenue Code of 1986, as amended
(the "CODE"), and
(ii) the Merger will be treated as a reorganization pursuant to the
provisions of Section 368(a)(1)(B) of the Code;
WHEREAS, this Agreement is intended to be, and is adopted as, a plan of
reorganization.
WHEREAS, the parties entered into an Agreement and Plan of Merger (the
"PRIOR AGREEMENT") as of June 19, 1996, and now desire to amend and restate
the Prior Agreement in its entirety effective as of the Agreement Effective
Date.
NOW, THEREFORE, in consideration of the premises and of the mutual and
dependent promises, representations, warranties and covenants herein
contained, the parties agree as follows:
1
ARTICLE I
DEFINITIONS
Unless otherwise defined herein or unless the context otherwise requires,
the following terms shall have the meanings set forth below:
"ACQUIROR COMMON STOCK" means the Common Stock, par value $3.00 per
share, of Acquiror.
"ACQUIROR PREFERRED STOCK" means the series of voting preferred stock of
Acquiror to be designated as Adjustable Rate Cumulative Preferred Stock and
described in the form of Certificate of Designation therefor attached
hereto as EXHIBIT B; provided, however, that if either Tenneco or Acquiror
determines, in good faith after consultation with the other party and its
advisors, that there exists a reasonable likelihood that the issuance of
Acquiror Preferred Stock (or Depositary Shares (as defined below) in
respect thereof) in connection with the Merger would cause the Merger to be
taxable to the stockholders of Tenneco, Acquiror shall have the absolute
obligation (at Acquiror's sole cost) to amend, if legally possible, the
terms of the Acquiror Preferred Stock in a manner reasonably acceptable to
Tenneco so that the issuance would not cause the Merger to be so taxable.
In the event that the terms of the Acquiror Preferred Stock are amended
pursuant to the proviso in the immediately preceding sentence, the parties
hereto hereby agree, if required by applicable Law, they shall (i) prepare
and execute an appropriate amendment to this Agreement reflecting said
amendment to the terms of the Acquiror Preferred Stock, (ii) subject to
SECTIONS 6.7(A) and 6.8 hereof, prepare, file and mail an appropriate
supplement to the Joint Proxy Statement reflecting the terms of this
Agreement and of the Merger as so amended, and (iii) if such amendment is
made after the approval of the Merger by the stockholders of Tenneco,
resubmit for the approval of the stockholders of Tenneco this Agreement and
the Merger as so amended.
"ACQUIROR COMMON STOCKHOLDERS' MEETING" has the meaning set forth in
SECTION 6.8 hereof.
"ACQUIROR SEC DOCUMENTS" means all filings made by Acquiror or its
subsidiaries, including Subsidiary, with the SEC from January 1, 1995
through the Agreement Effective Date, including notes, schedules,
amendments and exhibits thereto.
"ACQUIROR STOCK" means the Acquiror Common Stock and the Acquiror
Preferred Stock.
"ACQUIROR STOCK FUND" has the meaning set forth in SECTION 2.6(A) hereof.
"ACQUISITION TRANSACTION" has the meaning set forth in SECTION 6.17
hereof.
"ADJUSTED COMMON EQUITY CONSIDERATION" means the product of (i) the
Average Acquiror Price, and (ii) the quotient determined by dividing the
Common Equity Consideration by the Average Acquiror Common Equity Price.
"AFFILIATE" means, when used with respect to a specified Person, another
Person that directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Person
specified.
"AGREEMENT" means this Amended and Restated Agreement and Plan of Merger,
as the same may be amended from time to time in accordance with the terms
hereof.
"AGREEMENT EFFECTIVE DATE" means June 19, 1996, the date on which the
Prior Agreement was entered into.
"ALLOCATION AGREEMENT" means the Debt and Cash Allocation Agreement
included in the Distribution Agreement as an exhibit.
"APPRAISAL CONSIDERATION" has the meaning set forth in SECTION 2.6(H)
hereof.
"ACQUIROR PRICE" means the closing price of the Acquiror Common Stock on
the NYSE Composite Transactions Reporting System, as reported in The Wall
Street Journal, for the trading day immediately
2
preceding the day on which the holders of Tenneco Stock entitled to vote at
the Tenneco Stockholders' Meeting vote with respect to Merger; provided,
however, if there is no closing price for Acquiror Common Stock on such
trading day, the Acquiror Price shall be the closing price for Acquiror
Common Stock on the next preceding trading day on which a trade of Acquiror
Common Stock occurred.
"AVERAGE ACQUIROR PRICE" means the average of the closing prices of the
Acquiror Common Stock on the NYSE Composite Transactions Reporting System,
as reported in The Wall Street Journal, for the Average Period (but subject
to correction for typographical or other manifest errors in such
reporting), rounded to four decimal places.
"AVERAGE ACQUIROR COMMON EQUITY PRICE" means the Average Acquiror Price;
provided that if the Average Acquiror Price is greater than $38.3625, the
Average Acquiror Common Equity Price shall be $38.3625 and if the Average
Acquiror Price is less than $31.3875, the Average Acquiror Common Equity
Price shall be $31.3875; provided further, however, that the aforesaid
dollar amounts shall be subject to appropriate adjustments, reasonably
satisfactory to Tenneco and Acquiror in all respects, to reflect any
recapitalization, reclassification, stock split, combination of shares,
issuance of equity (other than issuances of shares pursuant to the exercise
of employee stock options) or options for less than full market value or
the like of or involving Acquiror.
"AVERAGE PERIOD" means the 20 trading days on the NYSE immediately
preceding the second trading day prior to the Effective Time.
"BENEFITS AGREEMENT" means the Benefits Agreement attached to the
Distribution Agreement as Exhibit A.
"BLACK-OUT PERIOD" means the Average Period and the 20 trading days
preceding the Average Period.
"CERTIFICATES" has the meaning set forth in SECTION 2.6(B) hereof.
"CLAIM" has the meaning set forth in SECTION 6.4(B) hereof.
"CLAIMS ADMINISTRATION" means the handling of claims made under the D&O
Policies, including the management, defense and settlement of claims.
"CLOSING" has the meaning set forth in SECTION 3.1 hereof.
"CLOSING DATE" has the meaning set forth in SECTION 3.1 hereof.
"COMMISSION" means the United States Securities and Exchange Commission.
"COMMON CONVERSION NUMBER CASE A" means the number of shares (rounded to
the nearest one-thousandth of a share) of Acquiror Common Stock to be
issued upon conversion of a single share of Tenneco Common Stock at the
Effective Time pursuant to SECTION 2.5 hereof and the other terms and
conditions of this Agreement, determined by dividing the Common Equity
Consideration by the Average Acquiror Common Equity Price and dividing the
result by the number of shares of Tenneco Common Stock outstanding
immediately prior to the Effective Time as certified to Acquiror by
Tenneco's principal registrar and transfer agent, which are to be converted
into the right to receive Acquiror Stock pursuant to the provisions of
SECTION 2.5 hereof.
"COMMON CONVERSION NUMBER CASE B" means the number of shares (rounded to
the nearest one-thousandth of a share) of Acquiror Common Stock to be
issued upon conversion of a single share of Tenneco Common Stock at the
Effective Time pursuant to SECTION 2.5 hereof and the other terms and
conditions of this Agreement, determined by dividing (x) the excess of (i)
7,000,000 over (ii) the number of shares of Acquiror Common Stock issued in
exchange for shares of $4.50 Preferred Stock and $7.40 Preferred Stock in
the Merger by (y) the number of shares of Tenneco Common Stock outstanding
immediately prior to the Effective Time as certified to Acquiror by
Tenneco's principal registrar and transfer agent, which are to be converted
into the right to receive Acquiror Stock pursuant to the provisions of
SECTION 2.5 hereof.
"COMMON EQUITY CONSIDERATION" means the Equity Consideration less the
Preferred Stock Amount.
"CORPORATE RESTRUCTURING TRANSACTIONS" has the meaning ascribed to that
term in the Distribution Agreement.
3
"DEBT" means any indebtedness representing an obligation for the
repayment of money borrowed by a subject Person (including short-term debt
and current maturities of long-term obligations), and any accrued but
unpaid or accreted interest related to such indebtedness.
"DEBT REALIGNMENT" means the plan for repayment, exchange and/or
modification of the indebtedness of Tenneco, as described in EXHIBIT C
attached hereto.
"DEPOSITARY" means The First National Bank of Boston, N.A.
"DEPOSITARY AGREEMENT" means the Depositary Agreement attached hereto as
EXHIBIT O.
"DEPOSITARY RECEIPT" means a depositary receipt issued by the Depositary
to evidence a Depositary Share.
"DEPOSITARY SHARE" means a unit representing a one twenty-fifth
fractional interest in a whole share of Acquiror Preferred Stock which
shall be evidenced by a Depositary Receipt issued to the Person entitled to
such fractional interest and which shall entitle the holder thereof,
pursuant to the Depositary Agreement, to rights equivalent to those of a
holder of a whole share of Acquiror Preferred Stock (to the extent of such
one twenty-fifth fractional interest therein).
"DISSENTING SHARES" has the meaning set forth in SECTION 2.6(H) hereof.
"DGCL" means the Delaware General Corporation Law, as amended.
"D&O POLICIES" has the meaning set forth in SECTION 6.4(D) hereof.
"EFFECTIVE TIME" has the meaning set forth in SECTION 3.2 hereof.
"ENERGY ASSETS" has the meaning ascribed to that term in the Distribution
Agreement.
"ENERGY BUSINESS" has the meaning ascribed to that term in the
Distribution Agreement.
"ENERGY GROUP" has the meaning ascribed to that term in the Distribution
Agreement.
"ENERGY SUBSIDIARIES" means the direct and indirect consolidated
subsidiaries of Tenneco immediately following the Spinoffs, including the
Major Subsidiaries.
"EQUITY CONSIDERATION" means $750,000,000.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"EXCHANGE AGENT" means First Chicago Trust Company of New York, or such
other trust company or bank designated by Acquiror and acceptable to
Tenneco, who shall act as agent for the holders of Tenneco Stock in
connection with the Merger to receive the Exchange Fund (as defined in
SECTION 2.6(A) hereof).
"$4.50 PREFERRED STOCK" means the $4.50 Cumulative Preferred Stock of
Tenneco.
"$4.50 PREFERRED CONVERSION NUMBER" means the number of shares (rounded
to the nearest one-thousandth of a share) of Acquiror Common Stock to be
issued upon conversion of a single share of $4.50 Preferred Stock at the
Effective Time pursuant to SECTION 2.5 and the other terms and conditions
of this Agreement, determined by dividing (i) $115, by (ii) the Acquiror
Price.
"GAAP" means United States generally accepted accounting principles and
practices, as in effect on the date of this Agreement, as promulgated by
the Financial Accounting Standards Board and its predecessors.
"GAINS TAX" has the meaning set forth in SECTION 10.1(C) hereof.
"GOVERNMENTAL AUTHORITY" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state
or local, domestic or foreign.
4
"HIGHER PROPOSAL" has the meaning set forth in SECTION 6.17 hereof.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"INDEMNIFIED PARTIES" has the meaning set forth in SECTION 6.4(B) hereof.
"INDUSTRIAL BUSINESS" has the meaning ascribed to that term in the
Distribution Agreement.
"INDUSTRIAL GROUP" has the meaning ascribed to that term in the
Distribution Agreement.
"INSURANCE ADMINISTRATION" means, with respect to a D&O Policy, the
accounting for premiums, defense costs, indemnity payments, deductibles and
retentions, as appropriate, under the terms and conditions of such D&O
Policy, and the distribution of Insurance Proceeds.
"INSURANCE PROCEEDS" means, with respect to an insured party, those
monies, net of any applicable premium adjustment, deductible, retention or
similar cost paid or held by or for the benefit of such insured party,
which are either
(i) received by an insured from an insurance carrier, or
(ii) paid by an insurance carrier on behalf of an insured.
"IRS RULING LETTER" has the meaning set forth in SECTION 7.1(G) hereof.
"JOINT PROXY STATEMENT" has the meaning set forth in SECTION 6.7 hereof.
"LAW" means any constitutional provision, statute, law, ordinance, rule,
regulation, permit, decree, injunction, judgment, order, decree, ruling,
determination, finding or writ of any Governmental Authority.
"LAZARD" means Lazard Freres & Co. LLC.
"MAJOR SUBSIDIARIES" means the following subsidiaries of Tenneco after
giving effect to the Spinoffs:
JURISDICTION
NAME OF ORGANIZATION
---- ---------------
Tennessee Gas Pipeline Company Delaware
Tenneco Energy Resources Corporation Delaware
Tenneco Gas Australia, Inc. Delaware
Tenneco Corporation Delaware
Tenneco Ventures Corporation Delaware
Midwestern Gas Transmission Company Delaware
East Tennessee Natural Gas Company Tennessee
"MATERIAL ADVERSE EFFECT ON ACQUIROR" means an event, change or effect
that:
(i) is or is reasonably likely to be materially adverse to the
business, operations, properties or financial condition of Acquiror and
its consolidated subsidiaries, taken as a whole; or
(ii) prevents Acquiror or Subsidiary from consummating the
transactions contemplated hereby, including the Merger, prior to the
date specified in SECTION 8.1(II) hereof.
"MATERIAL ADVERSE EFFECT ON TENNECO" means an event, change or effect
that:
(i) is or is reasonably likely to be materially adverse to the
business, operations, properties or financial condition of the Energy
Business, taken as a whole; or
(ii) prevents Tenneco from consummating the transactions contemplated
hereby, including the Spinoffs and the Merger, prior to the date
specified in SECTION 8.1(II) hereof.
"NEW CERTIFICATES" has the meaning set forth in SECTION 2.6(A) hereof.
"NEW PREFERRED STOCK" means the series of junior preferred stock of
Tenneco to be issued prior to the Closing Date as set forth in SECTION
6.1(D) hereof and described in the form of Certificate of Designation
therefor attached hereto as EXHIBIT E.
5
"NPS MATERIALS" means any registration statement, private placement
memorandum and/or other documents or filings prepared by or on behalf of
Tenneco or Acquiror (or their Affiliates or representatives) and
(i) distributed to prospective purchasers or other receivers of New
Preferred Stock, or
(ii) filed with the Commission or other Governmental Authority, or
the NYSE or other stock exchange, relating to the issuance of New
Preferred Stock.
"NPS VALUE" means the market value of the New Preferred Stock issued and
outstanding at and as of the Effective Time, as jointly determined by the
financial advisors identified in SECTIONS 4.10 and 5.10 below on the
Closing Date (or, if they are unable to so agree, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated later on the Closing Date). If the New Preferred Stock is
issued pursuant to a public issuance or private placement (as opposed to a
stock dividend), the gross proceeds of the issuance or placement shall be
presumptive evidence of the NPS Value (subject only to adjustment for
changes in value, if any, occurring between the date of the issuance or
placement and the Closing Date).
"NYSE" means the New York Stock Exchange.
"1981 STOCK PLAN" means the 1981 Tenneco Inc. Key Employee Stock Option
Plan.
"1994 STOCK PLAN" means the 1994 Tenneco Inc. Stock Ownership Plan.
"OPTION PLANS" means the 1981 Stock Plan and the 1994 Stock Plan.
"PERSON" means any natural person, corporation, business trust, joint
venture, association, company, partnership, limited liability company or
other entity, or any government, or any agency or political subdivision
thereof.
"PREFERRED STOCK AMOUNT" means an amount equal to the Acquiror Price
times the number of shares of Acquiror Common Stock issued to the holders
of the $4.50 Preferred Stock and the $7.40 Preferred Stock pursuant to the
terms of SECTION 2.5 hereof.
"PREFERRED STOCK CONVERSION NUMBER" means the result obtained by (x)
subtracting from the Adjusted Common Equity Consideration the product of
(i) the excess of (A) 7,000,000 over (B) the number of shares of Acquiror
Common Stock issued in exchange for shares of $4.50 Preferred Stock and
$7.40 Preferred Stock in the Merger and (ii) the Average Acquiror Price,
(y) dividing the result obtained pursuant to clause (x) by the "Assigned
Value" (as set forth in EXHIBIT B attached hereto) (being the liquidation
value) of the Acquiror Preferred Stock and (z) dividing the result obtained
pursuant to clause (y) by the number of shares of Tenneco Common Stock
outstanding immediately prior to the Effective Time as certified to
Acquiror by Tenneco's principal registrar and transfer agent.
"RIGHTS" shall mean the preferred stock purchase rights issued pursuant
to the Rights Agreement.
"RIGHTS AGREEMENT" shall mean the Rights Agreement dated as of May 24,
1988, as amended and restated as of October 1, 1989, between Tenneco and
First Chicago Trust Company of New York.
"REGISTRATION STATEMENT" has the meaning set forth in SECTION 6.7 hereof.
"REPLACEMENT D&O POLICY" has the meaning set forth in SECTION 6.4(D)
hereof.
"SECT" means the Stock Employee Compensation Trust currently maintained
by Tenneco.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"$7.40 PREFERRED STOCK" means the $7.40 Cumulative Preferred Stock of
Tenneco.
"$7.40 PREFERRED CONVERSION NUMBER" means the number of shares (rounded
to the nearest one-thousandth of a share) of Acquiror Common Stock to be
issued upon conversion of a single share of $7.40
6
Preferred Stock at the Effective Time pursuant to SECTION 2.5 and the other
terms and conditions of this Agreement, determined by dividing (i) $115, by
(ii) the Acquiror Price.
"S/I TRANSACTION" has the meaning set forth in SECTION 6.13 hereof.
"SHIPBUILDING BUSINESS" has the meaning ascribed to that term in the
Distribution Agreement.
"SHIPBUILDING GROUP" has the meaning ascribed to that term in the
Distribution Agreement.
"STOCKHOLDERS' MEETINGS" has the meaning set forth in SECTION 6.8 hereof.
"TAKEOVER STATUTE" means any "fair price," "moratorium," "control share
acquisition" or other similar antitakeover statute or regulation enacted
under state or federal laws in the United States or any foreign
jurisdiction.
"TENDER AND EXCHANGE MATERIALS" means any registration statement, private
placement memorandum, offer to purchase and/or other documents or filings
prepared by or on behalf of Tenneco or Acquiror (or their Affiliates or
representatives), either separately or jointly, and
(i) distributed to the record and/or beneficial holders of Tenneco
consolidated Debt in connection with the Debt Realignment, and/or
(ii) filed with the Commission or other Governmental Authority, or
the NYSE or other stock exchange, relating to Debt Realignment.
"TENNECO COMMON STOCK" means the Common Stock, par value $5.00 per share,
of Tenneco.
"TENNECO SEC DOCUMENTS" means all filings made by Tenneco or its
subsidiaries with the SEC since January 1, 1995 through the Agreement
Effective Date, including notes, schedules, amendments and exhibits
thereto.
"TENNECO STOCK" means the Tenneco Common Stock, the $7.40 Preferred Stock
and the $4.50 Preferred Stock (but not the New Preferred Stock).
"TENNECO STOCKHOLDERS' MEETING" has the meaning set forth in SECTION 6.8
hereof.
"TRANSFER TAXES" has the meaning set forth in SECTION 10.1(C) hereof.
"$" is a reference to United States dollars. All monetary amounts set
forth in this Agreement are intended to be United States currency amounts.
ARTICLE II
THE MERGER
2.1 MERGER. Upon the terms and subject to the conditions herein set forth,
Subsidiary shall be merged with and into Tenneco at the Effective Time.
2.2 EFFECTS OF THE MERGER. The Merger shall have the effects set forth in
the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time the separate existence and corporate
organization of Subsidiary shall cease and Tenneco shall continue as the
Surviving Corporation, and all the identity, purposes, properties, rights,
privileges, powers, assets, franchises, debts and duties of Tenneco and
Subsidiary shall, except as expressly provided herein or in the DGCL, vest in
the Surviving Corporation and become the identity, purposes, properties,
rights, privileges, powers, assets, franchises, debts and duties of the
Surviving Corporation.
7
2.3 CERTIFICATE OF INCORPORATION AND BYLAWS.
(a) At the Effective Time, the certificate of incorporation of Tenneco in
effect immediately prior to the Effective Time shall be amended as set forth
in ANNEX 1 hereto, and as so amended shall be the certificate of incorporation
of the Surviving Corporation.
(b) From and after the Effective Time, the by-laws of Subsidiary, as in
effect immediately prior to the Effective Time (but, in any event, to be in
form and substance reasonably acceptable to Tenneco), shall, until further
amended as provided by law, constitute the by-laws of the Surviving
Corporation, except that the by-laws of the Surviving Corporation shall
include the provisions specified in SECTION 6.4(A)(I) of this Agreement.
2.4 DIRECTORS. The directors of Subsidiary at the Effective Time shall be
the initial directors of the Surviving Corporation, each to hold office from
the Effective Time in accordance with the certificate of incorporation and
bylaws of the Surviving Corporation and until his or her successor is duly
elected and qualified.
2.5 CONVERSION OF SHARES. At the Effective Time, by virtue of the Merger and
without any action on the part of any stockholder of either Tenneco or
Subsidiary, as applicable, but subject to SECTION 2.6 hereof, each outstanding
share of Subsidiary's capital stock and Tenneco Stock (but not New Preferred
Stock) shall be cancelled or converted in accordance with the following
provisions of this SECTION 2.5:
(a) CAPITAL STOCK OF SUBSIDIARY. Each share of Subsidiary's capital stock
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of Common
Stock, par value $5.00 per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY AND ACQUIROR-OWNED STOCK. Each share of
Tenneco Stock owned immediately prior to the Effective Time (after giving
effect to the Spinoffs) by Tenneco, directly as treasury stock or
indirectly through one or more of its wholly-owned subsidiaries, or by
Acquiror or any direct or indirect wholly-owned subsidiary of Acquiror,
shall be cancelled and retired and shall cease to exist and no Acquiror
Stock or other consideration shall be delivered in exchange therefor or
with respect thereto.
(c) CONVERSION OF $7.40 PREFERRED STOCK. Each share of $7.40 Preferred
Stock issued and outstanding immediately prior to the Effective Time (other
than shares to be cancelled in accordance with SECTION 2.5(B) above) shall
be converted into the right to receive that number of fully paid and
nonassessable shares of Acquiror Common Stock that is equal to the $7.40
Preferred Conversion Number.
(d) CONVERSION OF $4.50 PREFERRED STOCK. Each share of $4.50 Preferred
Stock issued and outstanding immediately prior to the Effective Time (other
than shares to be cancelled in accordance with SECTION 2.5(B) above) shall
be converted into the right to receive that number of fully paid and
nonassessable shares of Acquiror Common Stock that is equal to the $4.50
Preferred Conversion Number.
(e) CONVERSION OF TENNECO COMMON STOCK. Each share of Tenneco Common
Stock issued and outstanding immediately prior to the Effective Time (other
than shares to be cancelled in accordance with SECTION 2.5(B) above) shall
be converted into the right to receive (i) that number of fully paid and
nonassessable shares of (i) Acquiror Common Stock that is equal to the
Common Conversion Number Case A if the issuance of Acquiror Common Stock as
contemplated by this SECTION 2.5(E)(I) is approved by the requisite vote of
the holders of the Acquiror Common Stock, or if such vote is not required
by law or the rules of any national securities exchange on which the
Acquiror Common Stock is listed, or (ii) if the issuance of shares of
Acquiror Common Stock as contemplated by SECTION 2.5(E)(I) is not approved
by the requisite vote of the holders of the Acquiror Common Stock and is
not permissible as aforesaid without such vote, (A) that number of fully
paid and nonassessable shares of Acquiror Common Stock that is equal to the
Common Conversion Number Case B and (B) that number of Depositary Shares
representing interests in that fraction of a fully paid and nonassessable
share of Acquiror Preferred Stock that is equal to the Preferred Stock
Conversion Number.
(f) REDEMPTION OF PREFERRED STOCK. Subject to the consent of Acquiror
(which shall not be unreasonably withheld or delayed), Tenneco may at any
time hereafter, prior to the Effective Time, redeem the $4.50 Preferred
Stock and/or the $7.40 Preferred Stock in accordance with their respective
terms.
8
2.6 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Promptly after the Effective Time, Acquiror shall
deposit with the Exchange Agent, for the benefit of the holders of shares of
Tenneco Stock, for exchange in accordance with this SECTION 2.6, certificates
and Depositary Receipts, if any (together, the "NEW CERTIFICATES")
representing shares of Acquiror Stock and any Depositary Shares, respectively,
in amounts sufficient to allow the Exchange Agent to make all deliveries of
New Certificates that may be required in exchange for Certificates (as defined
below) pursuant to this SECTION 2.6 (the "ACQUIROR STOCK FUND") (such Acquiror
Stock Fund, together with any dividends or distributions with respect thereto
contemplated by SECTION 2.6(D) hereof and cash in lieu of fractional shares or
any fractional Depositary Shares contemplated by SECTION 2.6(C) hereof, being
hereinafter referred to as the "EXCHANGE FUND").
(b) EXCHANGE PROCEDURES. As soon as practicable after the Effective Time,
the Surviving Corporation shall cause the Exchange Agent to mail to each
holder of record of a certificate or certificates which immediately prior to
the Effective Time represented outstanding shares of Tenneco Stock which were
converted pursuant to SECTION 2.5 hereof into the right to receive shares of
Acquiror Stock and Depositary Shares, if any (the "CERTIFICATES")
(i) a letter of transmittal (which shall be in such form and have such
provisions as Acquiror and Tenneco may reasonably specify), and
(ii) instructions for use in effecting the surrender of the Certificates
in exchange for New Certificates.
Upon surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly completed in accordance with
the instructions thereto and executed, the holder of such Certificate shall be
entitled to receive in exchange therefor a New Certificate or New Certificates
representing that number of whole shares of Acquiror Stock (and any whole
Depositary Shares) which such holder has the right to receive pursuant to the
provisions of SECTION 2.5 hereof (after giving effect to SECTIONS 2.6(C) and
2.6(H) hereof) and any cash paid in lieu of fractional shares (or any
fractional Depositary Shares) and any dividends or distributions with respect
thereto as contemplated by SECTIONS 2.6(C) and 2.6(D) hereof, after giving
effect to any required tax withholdings, and the Certificate so surrendered
shall forthwith be cancelled. In the event of a transfer of ownership of
Tenneco Stock that is not registered in the transfer records of Tenneco, a New
Certificate representing the proper number of shares of Acquiror Stock (and
any Depositary Shares) may be issued to a transferee if the Certificate
formerly representing such Tenneco Stock is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
by evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this SECTION 2.6(B), each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender a New Certificate or New Certificates representing
such whole shares of Acquiror Stock (and any whole Depositary Shares), any
dividends or distributions in respect of such shares of Acquiror Stock (and
any Depositary Shares) and cash in lieu of any fractional shares of Acquiror
Stock (or any fractional Depositary Shares), as is contemplated by SECTIONS
2.5 and 2.6 of this Agreement.
(c) FRACTIONAL SHARES. Notwithstanding anything to the contrary contained
herein (but except for the issuance of Depositary Receipts), no scrip or
certificates for fractional shares of Acquiror Stock or for any fractional
Depositary Shares shall be issued, and no Person otherwise entitled to any
such fractional share or fractional Depositary Share shall be entitled to
vote, to receive dividends, or to any other rights of a holder of a share or
Depositary Share with respect to such fractional interest. Instead, the
Exchange Agent shall act as agent for the holders of Tenneco Stock and shall
sell on the NYSE, as promptly as possible, but in any event not later than 30
days after the Closing Date, for the account of the Persons otherwise entitled
to such fractional shares or fractional Depositary Shares, shares of Acquiror
Stock or Depositary Shares equivalent to the aggregate of such fractional
interests. The Exchange Agent shall, until December 31, 1998, pay to such
Persons upon surrender of their Certificate(s) their respective pro rata
shares of the net proceeds of such sale, without interest. On December 31,
1998, any remaining proceeds of the sale shall be paid over to Acquiror, after
which the Persons otherwise entitled to such fractional interests represented
by such proceeds shall look only to Acquiror for payment, subject to the
requirements of escheat laws of the various states that may be applicable.
9
(d) DIVIDENDS AND OTHER DISTRIBUTIONS. Any dividend or other distribution
declared or made after the Effective Time with a record date after the
Effective Time in respect of Acquiror Stock issuable hereunder to the holder
of a Certificate not then surrendered pursuant to SECTION 2.6(B) hereof shall
be paid to the Exchange Agent (or, if payable after December 31, 1998, shall
be set aside and retained by Acquiror), and no such dividend or other
distribution payable in respect of such Acquiror Stock shall be paid to the
holder of such outstanding Certificate until such Certificate shall have been
so surrendered to the Exchange Agent (or, if after December 31, 1998, to
Acquiror). Upon surrender of such outstanding Certificate, there shall be paid
by the Exchange Agent (or, if after December 31, 1998, by Acquiror) to or at
the direction of the holder of the New Certificate(s) issued in exchange
therefor the amount (without interest thereon) of all dividends or
distributions which have theretofore been paid to the Exchange Agent (or, if
after December 31, 1998, set aside and retained by Acquiror) with respect to
the number of shares of Acquiror Stock and any Depositary Shares represented
by the New Certificate(s) issued upon such surrender and exchange.
(e) NO FURTHER OWNERSHIP RIGHTS IN TENNECO STOCK. All shares of Acquiror
Stock and any Depositary Shares issued upon the surrender for exchange of
shares of Tenneco Stock in accordance with the terms hereof (including any
cash paid pursuant to SECTION 2.6(C) hereof) shall be deemed to have been
issued in full satisfaction of all rights pertaining to such shares of Tenneco
Stock, and there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of Tenneco Stock
that were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be cancelled and exchanged as provided in this SECTION
2.6.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund held by
the Exchange Agent that remains undistributed to the stockholders of Tenneco
after December 31, 1998, shall be delivered to Acquiror, and any stockholders
of Tenneco who have not theretofore complied with this SECTION 2.6 shall
thereafter look only to Acquiror for payment of their claims for Acquiror
Stock, any Depositary Shares, any cash in lieu of fractional shares of
Acquiror Stock or in lieu of any fractional Depositary Shares and any
dividends or distributions with respect to Acquiror Stock.
(g) NO LIABILITY. None of Acquiror, Subsidiary, Tenneco, the Industrial
Subsidiary or the Shipbuilding Subsidiary (or any of their respective direct
or indirect subsidiaries or Affiliates) shall be liable to any holder of
shares of Tenneco Stock, Acquiror Stock or any Depositary Shares, as the case
may be, for such shares (or dividends or distributions with respect thereto)
or cash for payment in lieu of fractional shares or in lieu of any fractional
Depositary Shares delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. The Industrial Subsidiary, the
Shipbuilding Subsidiary and their respective direct and indirect subsidiaries
and Affiliates shall be deemed third party beneficiaries of this SECTION
2.6(G) and all other provisions of this Agreement necessary or appropriate for
purposes of enforcing this SECTION 2.6(G).
(h) DISSENTING HOLDERS OF $4.50 PREFERRED STOCK AND DISSENTING HOLDERS OF
NEW PREFERRED STOCK. Notwithstanding anything in this Agreement to the
contrary, shares of $4.50 Preferred Stock and New Preferred Stock that are
issued and outstanding immediately prior to the Effective Time and are held by
stockholders who are entitled to appraisal rights in respect thereof under
Section 262 of the DGCL and who have
(i) not voted such shares in favor of the adoption of this Agreement or
otherwise waived or lost their right to demand appraisal of such shares and
(ii) properly demanded appraisal of such shares in accordance with
Section 262 of the DGCL (the "DISSENTING SHARES")
shall not be converted as described in SECTION 2.5(D) above or remain
outstanding as described in SECTION 2.7 hereof, as the case may be, but shall
become the right to receive such consideration as may be determined to be due
to such stockholders pursuant to Section 262 of the DGCL ("APPRAISAL
CONSIDERATION"). If, after the Effective Time, any such stockholder withdraws
his demand for appraisal or fails to perfect or otherwise loses his right of
appraisal, in any case pursuant to the DGCL, his Dissenting Shares shall be
deemed to be converted as of the Effective Time into the right to receive
shares of Acquiror Common Stock (without any interest thereon)
10
as provided in SECTION 2.5(D) hereof or shall be deemed to have remained
outstanding as provided in SECTION 2.7 hereof, as the case may be. Promptly
upon receiving any demands for appraisal, withdrawals of demand for appraisal
or any other instrument served pursuant to Section 262 of the DGCL, Tenneco
shall so notify Acquiror and shall give Acquiror the opportunity to
participate in and direct all negotiations and proceedings with respect to any
such appraisal demands. Tenneco shall not, without the prior written consent
of Acquiror, make any payment with respect to, or settle, offer to settle or
otherwise negotiate, any such appraisal demands. From and after the Effective
Time, the Surviving Corporation shall be solely responsible for the payment of
any and all Appraisal Consideration, and shall indemnify, defend, protect and
hold harmless the Industrial Subsidiary, the Shipbuilding Subsidiary and their
respective direct and indirect subsidiaries from and against any and all
claims, losses, expenses, payments, liabilities and damages (including
attorneys' fees) relating to any Dissenting Shares or claims of stockholders
holding Dissenting Shares. In order to effect the payment of any Appraisal
Consideration, the Surviving Corporation shall establish an escrow with the
Exchange Agent (or other escrow agent reasonably acceptable to the Industrial
Subsidiary) consisting of an adequate amount of cash from the $25,000,000 of
cash required to be on hand at Tenneco as of the Effective Time pursuant to
the Allocation Agreement. The Industrial Subsidiary, the Shipbuilding
Subsidiary and their respective direct and indirect subsidiaries shall be
deemed third party beneficiaries of this SECTION 2.6(H) and all other
provisions of this Agreement necessary or appropriate for purposes of
enforcing this SECTION 2.6(H).
2.7 NEW PREFERRED STOCK. Subject to SECTION 2.6(H) hereof, the shares of New
Preferred Stock outstanding immediately prior to the Effective Time shall not
be converted or otherwise exchanged pursuant to the Merger and shall remain
outstanding immediately after the Effective Time, held by the Persons who were
holders of the New Preferred Stock immediately prior to the Effective Time.
ARTICLE III
CLOSING AND FILING
3.1 CLOSING. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to SECTION
8.1 hereof, and subject to the satisfaction or, if permissible, waiver of the
conditions set forth in ARTICLE VII hereof, the closing of the Merger (the
"CLOSING") shall take place as promptly as practicable (and in any event
within two business days) after satisfaction or waiver of the conditions set
forth in ARTICLE VII hereof, at the offices of Tenneco Inc., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, unless another date, time or place is agreed to in
writing by the parties hereto; provided, however, that if, (i) during the
Black-out Period there occurs an event or series of events that, in the
opinion of either Tenneco or Acquiror, could reasonably be expected to have a
temporary effect on the price of Acquiror Stock, and (ii) but for the
provisions of this proviso the Average Acquiror Price would be greater than
$38.3625 or less than $31.3875 (said dollar amounts to be adjusted on the same
basis as is described in the definition of Average Acquiror Common Equity
Price), then either Tenneco (in the case the Average Acquiror Price would be
greater than $38.3625 as aforesaid) or Acquiror (in the case the Average
Acquiror Price would be less than $31.3875 as aforesaid) may, by written
notice to the other, elect to delay or to restart the commencement of the
Average Period (and thereby the Closing) until such day as such temporary
effect has ended (but in no event shall the Closing be delayed by more than 15
days and in no event beyond the dated specified in SECTION 8.1(II) hereof), as
determined and specified by the notifying party. The date on which the Closing
occurs is referred to in this Agreement as the "CLOSING DATE".
3.2 EFFECTIVE TIME. As promptly as practicable after the satisfaction or, if
permissible, waiver of the conditions set forth in ARTICLE VII hereof, but
subject to the terms of SECTION 3.1 hereof, the parties hereto shall cause the
Merger to be consummated by filing a certificate of merger with the Secretary
of State of the State of Delaware in such form as required by, and executed in
accordance with the relevant provisions of, the DGCL (the date and time of the
acceptance of such filing, or such later date or time as set forth therein,
being the "EFFECTIVE TIME").
11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TENNECO
Tenneco hereby represents and warrants to Acquiror and Subsidiary as
follows:
4.1 ORGANIZATION AND EXISTENCE. Each of Tenneco and the Major Subsidiaries
is a corporation validly existing and in good standing under the laws of the
jurisdiction of its organization with the corporate power and authority to own
its properties and assets and to carry on its business as now being conducted,
except where the failure to be so existing and in good standing or to have
such power and authority would not have a Material Adverse Effect on Tenneco.
4.2 CAPITALIZATION.
(a) As of the dates indicated below, the authorized and outstanding capital
stock of Tenneco was as follows:
AUTHORIZED
AS OF THE
CLASS DATE HEREOF OUTSTANDING AS OF MARCH 31, 1996
----- ----------- --------------------------------
Common Stock 350,000,000 191,354,932 shares (including 17,358,445
shares held in treasury or by subsidiaries
of Tenneco)
Preferred Stock 15,000,000 803,723 shares of $4.50 Preferred Stock;
391,519 shares of $7.40 Preferred Stock
Junior Preferred 50,000,000 none
Stock
(b) Between March 31, 1996 and the Agreement Effective Date, Tenneco has
issued no shares of its capital stock except for shares of Tenneco Common
Stock issued upon the exercise of options granted pursuant to the Option Plans
or to executives of Tenneco outside the Option Plans.
(c) As of March 31, 1996, except for
(i) Rights issued pursuant to the Rights Agreement and
(ii) options to acquire an aggregate of 5,207,655 shares of Tenneco
Common Stock,
there were no outstanding options, warrants, rights, puts, calls, commitments
or other contracts, arrangements, or understandings issued by or binding upon
Tenneco requiring or providing for, and there were no outstanding securities
of Tenneco or its subsidiaries which upon the conversion, exchange or exercise
thereof would require or provide for, the issuance by Tenneco of any new or
additional equity interests in Tenneco or any other securities of Tenneco
which, with notice, lapse of time and/or payment of monies, are or would be
convertible into or exercisable or exchangeable for equity interests in
Tenneco (each, a "TENNECO EQUITY RIGHT"). Between March 31, 1996 and the
Agreement Effective Date, Tenneco has not issued or granted any Tenneco Equity
Right except for
(i) Rights issued in connection with the issuance of Tenneco Common Stock
as described in SECTION 4.2(B) hereof and
(ii) options to purchase 11,000 shares of Tenneco Common Stock granted
pursuant to the 1994 Stock Plan.
(d) As of the Agreement Effective Date all outstanding shares of Tenneco
Stock are, and immediately prior to the Effective Time all outstanding shares
of Tenneco Stock and New Preferred Stock will be, validly issued, fully paid
and nonassessable and free of any preemptive (or similar) right.
4.3 AUTHORITY AND APPROVAL. Tenneco has the corporate power and authority,
and no other corporate proceedings on the part of Tenneco are necessary, to
execute and deliver this Agreement and the Distribution Agreement and to
consummate the transactions contemplated hereby and thereby (subject to
securing the
12
approval of the stockholders of Tenneco as contemplated by SECTION 6.8 hereof,
and formal declaration of the dividends necessary to effectuate the Spinoffs
and the issuance of the New Preferred Stock). This Agreement has been duly
executed and delivered by Tenneco and, assuming this Agreement constitutes a
valid and binding obligation of each of Acquiror and Subsidiary, this
Agreement constitutes a valid and binding obligation of Tenneco, enforceable
against Tenneco in accordance with its terms.
4.4 FINANCIAL STATEMENTS. The audited financial statements of Tenneco and
consolidated subsidiaries as of December 31, 1995 and 1994 and for the three
years ended December 31, 1995, included in Tenneco's 1995 Annual Report on
Form 10-K, as filed with the Commission, (i) were prepared in accordance with
GAAP applied on a consistent basis (except as indicated therein or in the
notes thereto) and (ii) fairly present the financial position of Tenneco and
consolidated subsidiaries as of the dates thereof and the results of their
operations and cash flows for the periods then ended. The unaudited financial
statements of Tenneco and consolidated subsidiaries as of March 31, 1996 and
1995 and for the three-month periods ended on each of such dates, included in
Tenneco's March 31, 1996 Quarterly Report on Form 10-Q as filed with the
Commission, (A) comply in all material respects with the published rules and
regulations of the Commission with respect thereto, (B) were prepared in
accordance with GAAP, except as otherwise permitted under the Exchange Act and
the rules and regulations thereunder, on a consistent basis (except as
indicated therein or in the notes thereto) and (C) fairly present the
financial position of Tenneco and consolidated subsidiaries as of the dates
thereof and the results of their operations and cash flows for the periods
then ended, subject to normal year-end adjustments and any other adjustments
described herein or in the notes or schedules thereto.
The unaudited pro forma financial information of the Energy Business
(including related notes thereto) as of December 31, 1995 included in EXHIBIT
F-1 attached to this Agreement (which were prepared without cash flow
statements and treating the Energy Business as if it were a separate entity
for the purpose of estimates and judgments of materiality) appropriately
reflects all significant pro forma adjustments necessary to and does fairly
present the financial position of the Energy Business as of December 31, 1995
and for the year then ended, except that such financial information was
prepared on the assumption that the Energy Business had no long-term debt as
of December 31, 1995. The historical financial balances included in the
unaudited pro forma financial balances included in EXHIBIT F-1 have been
derived from amounts included in the consolidated balances presented in the
audited financial statements of Tenneco and consolidated subsidiaries included
in Tenneco's December 31, 1995 Annual Report on Form 10-K as filed with the
Commission.
The unaudited pro forma financial information of the Energy Business
(including related notes thereto) as of March 31, 1996 included in EXHIBIT F-2
attached to this Agreement (which were prepared without cash flow statements
and treating the Energy Business as if it were a separate entity for the
purpose of estimates and judgments of materiality) appropriately reflects all
significant pro forma adjustments necessary to and does fairly present the
financial position of the Energy Business as of March 31, 1996, except that
such financial information was prepared on the assumption that the Energy
Business had no long-term debt as of March 31, 1996. The historical financial
balances included in the unaudited pro forma financial balances included in
EXHIBIT F-2 have been derived from amounts included in the consolidated
balances presented in the audited financial statements of Tenneco and
consolidated subsidiaries included in Tenneco's March 31, 1996 Quarterly
Report on Form 10-Q as filed with the Commission.
The financial statements of Tennessee Gas Pipeline Company, Midwestern Gas
Transmission Company and East Tennessee Natural Gas Company as of and for the
years ended December 31, 1995 and 1994 included on pages 110 through 123 of
each company's respective Federal Energy Regulatory Commission Form 2 were
prepared in all material respects in accordance with the accounting
requirements of the Federal Energy Regulatory Commission as set forth in its
applicable Uniform System of Accounts and published accounting releases.
4.5 CONSENTS AND APPROVALS; NO VIOLATIONS. The execution, delivery and,
subject to securing the approval of the stockholders of Tenneco as
contemplated by SECTION 6.8 hereof, formal declaration of the dividends
necessary to effectuate the Spinoffs and the issuance of the New Preferred
Stock, performance by Tenneco of
13
this Agreement and the Distribution Agreement and the consummation by Tenneco
of the transactions contemplated hereby or thereby do not or will not:
(i) conflict with or result in any breach of any provisions of the
certificate of incorporation or bylaws of Tenneco;
(ii) except as contemplated by this Agreement or the Distribution
Agreement, require any filing by Tenneco or any Energy Subsidiary with any
Governmental Authority, or require Tenneco or any Energy Subsidiary to
obtain any permit, authorization, consent or approval from any Governmental
Authority;
(iii) after giving effect to the Debt Realignment, result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license,
contract, agreement, franchise, permit, concession or other instrument,
obligation, understanding, commitment or other arrangement to which Tenneco
or any Energy Subsidiary is a party or by which any of them or any of their
respective material properties or assets may be bound or affected; or
(iv) violate any Law applicable to Tenneco or any Energy Subsidiary;
except, in the case of each of clauses (ii) through (iv) above, for failures
to make filings or obtain permits, authorizations, consents or approvals,
violations, breaches or defaults that could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Tenneco.
4.6 LITIGATION. Except as previously disclosed in writing to Acquiror, as of
the Agreement Effective Date there are no actions, suits, proceedings or, to
the knowledge of Tenneco, governmental investigations or inquiries pending
against Tenneco or any of its subsidiaries or their respective properties,
assets, operations or businesses which could reasonably be expected to delay,
prevent or hinder the consummation of the transactions contemplated hereby or
by the Distribution Agreement, and to the knowledge of Tenneco as of the
Agreement Effective Date, no such actions, suits, proceedings or governmental
investigations or inquiries are threatened.
4.7 TENNECO SEC DOCUMENTS; ACCURACY OF INFORMATION. The information relating
to the Energy Business contained in the Tenneco SEC Documents (A) complied, as
of the date of filing thereof (or, in the case of any registration statement,
on the date it was declared effective), in all material respects with the
applicable requirements of the Exchange Act or Securities Act and (B) did not
contain, as of the date of filing thereof (or, in the case of any registration
statement, on the date it was declared effective), any untrue statement of a
material fact or omit to state any material fact necessary in order to have
the statements made therein, in light of the circumstances under which they
were made, not misleading.
4.8 NO MATERIAL ADVERSE EFFECT. Except as previously disclosed to Acquiror
in writing prior to the date of this Agreement, between December 31, 1995 and
the Agreement Effective Date, there has occurred no Material Adverse Effect on
Tenneco.
4.9 ADVISORS. Except for ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, and ▇.▇.
▇▇▇▇▇▇ Securities Incorporated, which have been retained by Tenneco to assist
and advise Tenneco in connection with the transactions contemplated by this
Agreement and the Distribution Agreement, Tenneco has not employed any broker,
finder or intermediary in connection with such transactions who might be
entitled to a fee or commission upon the consummation of this Agreement, the
Distribution Agreement or the transactions contemplated hereby or thereby. A
copy of the engagement letter between Tenneco and each such advisor has been
provided to Acquiror.
4.10 OPINION OF FINANCIAL ADVISOR. Tenneco has received the opinion of
Lazard, dated as of the Agreement Efffective Date, to the effect that, as of
such date, the consideration to be received in the Merger by Tenneco's
stockholders is fair to Tenneco's stockholders from a financial point of view
(and Tenneco has the right to refer
14
to that opinion, so long as such reference is in form and substance
satisfactory to Lazard, in the Joint Proxy Statement and other appropriate
filings with the Commission and mailings to its stockholders).
4.11 AMENDMENTS TO RIGHTS AGREEMENT. Tenneco has caused the Rights Agreement
to be amended such that
(i) neither a "Triggering Event" nor a "Distribution Date" (in each case
as defined in the Rights Agreement) will occur solely by reason of the
execution of this Agreement and the consummation of the transactions
contemplated hereby, and
(ii) the Rights will expire at the Effective Time.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND SUBSIDIARY
Acquiror and Subsidiary hereby represent and warrant, jointly and severally,
to Tenneco as follows:
5.1 ORGANIZATION AND EXISTENCE. Each of Acquiror and Subsidiary is a
corporation validly existing and in good standing under the laws of the
jurisdiction of its organization with the corporate power and authority to own
its properties and assets and to carry on its business as now being conducted,
except where the failure to be so existing and in good standing or to have
such power and authority would not have a Material Adverse Effect on Acquiror.
5.2 CAPITALIZATION.
(a) ACQUIROR.
(i) As of the Agreement Effective Date, the authorized capital stock of
Acquiror consists of:
(A) 100,000,000 shares of Acquiror Common Stock of which, at June 18,
1996, 35,582,074 shares were issued and outstanding and 1,769,151 shares
were held in treasury (including shares held in Acquiror's Benefits
Protection Trust); and
(B) 25,000,000 shares of Preferred Stock , $.01 par value, none of which
are issued and outstanding.
(ii) As of the Agreement Effective Date, except for rights issued pursuant
to the Shareholders Rights Agreement, dated as of July 7, 1992, between
Acquiror and The First National Bank of Boston and options to acquire an
aggregate of 4,066,487 shares of Acquiror Common Stock, there were no
outstanding options, warrants, rights, puts, calls, commitments or other
contracts, arrangements, or understandings issued by or binding upon Acquiror
requiring or providing for, and there were no outstanding securities of
Acquiror or its subsidiaries which upon the conversion, exchange or exercise
thereof would require or provide for, the issuance by Acquiror of any new or
additional equity interests in Acquiror or any other securities of Acquiror
which, with notice, lapse of time and/or payment of monies, are or would be
convertible into or exercisable or exchangeable for equity interests in
Acquiror (each, an "ACQUIROR EQUITY RIGHT").
(iii) As of the Agreement Effective Date all outstanding shares of the
capital stock of Acquiror are, and immediately prior to the Effective Time all
outstanding shares of the capital stock of Acquiror will be, validly issued,
fully paid and nonassessable and free of any preemptive (or similar) right.
(b) SUBSIDIARY.
(i) The authorized capital stock of Subsidiary consists of 1,000 shares of
common stock, $1.00 par value, all of which are issued and outstanding.
(ii) There are no outstanding options, warrants, rights, puts, calls,
commitments or other contracts, arrangements, or understandings issued by or
binding upon Subsidiary requiring or providing for, and there were
15
no outstanding securities of Subsidiary which upon the conversion, exchange or
exercise thereof would require or provide for, the issuance by Subsidiary of
any new or additional equity interests in Subsidiary or any other securities
of Subsidiary which, with notice, lapse of time and/or payment of monies, are
or would be convertible into or exercisable or exchangeable for equity
interests in Subsidiary.
(iii) All outstanding shares of the capital stock of Subsidiary are, and
immediately prior to the Effective Time all outstanding shares of the capital
stock of Subsidiary will be, validly issued, fully paid and nonassessable and
free of any preemptive (or similar) right.
5.3 AUTHORITY AND APPROVAL. Each of Acquiror and Subsidiary has the
corporate power and authority, and no other corporate proceedings on the part
of Acquiror or Subsidiary are necessary, to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. This Agreement has
been duly executed and delivered by each of Acquiror and Subsidiary and,
assuming this Agreement constitutes a valid and binding obligation of Tenneco,
this Agreement constitutes the valid and binding obligation of Acquiror and
Subsidiary, enforceable against each of them in accordance with its terms.
5.4 FINANCIAL STATEMENTS. Acquiror has heretofore delivered to Tenneco
complete and correct copies of all filings made by Acquiror pursuant to the
Exchange Act since January 1, 1995. The audited consolidated financial
statements of Acquiror included in such filings (i) were prepared in
accordance with GAAP applied on a consistent basis (except as indicated
therein or in the notes thereto) during the periods presented and (ii) fairly
present the financial position of Acquiror and its consolidated subsidiaries
as of the dates thereof and the results of their operations and cash flows for
the periods then ended. The unaudited financial statements included in such
filings
(i) comply in all material respects with the published rules and
regulations of the Commission with respect thereto,
(ii) were prepared in accordance with GAAP, except as otherwise permitted
under the Exchange Act and the rules and regulations thereunder, on a
consistent basis (except as may be indicated therein or in the notes or
schedules thereto) during the periods presented and
(iii) fairly present the financial position of Acquiror and its
consolidated subsidiaries as at the dates thereof and the results of their
operations and cash flows for the periods then ended, subject to normal
year-end adjustments and any other adjustments described therein or in the
notes or schedules thereto.
5.5 CONSENT AND APPROVALS; NO VIOLATION. The execution, delivery and
performance by Acquiror and Subsidiary of this Agreement and the consummation
by Acquiror and Subsidiary of the transactions contemplated hereby do not and
will not:
(i) conflict with or result in any breach of any provisions of the
certificate of incorporation, bylaws or other governing documents of
Acquiror or Subsidiary,
(ii) except as contemplated by this Agreement, require any filing by
Acquiror or any of its subsidiaries (including Subsidiary) with any
Governmental Authority or require Acquiror or any of its subsidiaries
(including Subsidiary) to obtain any permit, authorization, consent or
approval of any Governmental Authority;
(iii) result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right
of termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement, franchise, permit, concession or other
instrument, obligation, understanding, commitment or other arrangement to
which Acquiror or any of its subsidiaries (including Subsidiary) is a party
or by which any of them or any of their respective material properties or
assets may be bound or affected; or
(iv) violate any Law applicable to Acquiror or any of its subsidiaries
(including Subsidiary);
16
except, in the case of each of clauses (ii) through (iv) above, for failures
to make filings or obtain permits, authorizations, consents or approvals,
violations, breaches or defaults which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Acquiror.
5.6 LITIGATION. Except as previously disclosed in writing to Tenneco, as of
the Agreement Effective Date, there are no actions, suits, proceedings or, to
Acquiror's knowledge, governmental investigations or inquiries pending against
Acquiror or any of its subsidiaries (including Subsidiary) or their respective
properties, assets, operations or businesses which could reasonably be
expected to delay, prevent or hinder the consummation of the transactions
contemplated hereby and, to the knowledge of Acquiror, no such actions, suits,
proceedings or governmental investigations or inquiries are threatened.
5.7 ACQUIROR SEC DOCUMENTS; ACCURACY OF INFORMATION. The information
regarding Acquiror and its consolidated subsidiaries contained in the Acquiror
SEC Documents (A) complied, as of the date of filing thereof (or, in the case
of any registration statement, on the date it was declared effective), in all
material respects with the applicable requirements of the Exchange Act or
Securities Act and (B) did not contain, as of the date of filing thereof (or,
in the case of any registration statement, on the date it was declared
effective), any untrue statement of a material fact or omit to state any
material fact necessary in order to have the statements made therein, in light
of the circumstances under which they were made, not misleading.
5.8 NO MATERIAL ADVERSE EFFECT. Except as previously disclosed to Tenneco in
writing prior to the date of this Agreement, between December 31, 1995 and the
Agreement Effective Date, there has occurred no Material Adverse Effect on
Acquiror.
5.9 ADVISORS. Except for ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ("DLJ"), which has
been retained by Acquiror to assist and advise Acquiror in connection with the
transactions contemplated by this Agreement, Acquiror has not employed any
broker, finder or intermediary in connection with such transactions who might
be entitled to a fee or commission upon the consummation of this Agreement or
the transactions contemplated hereby.
5.10 OPINION OF FINANCIAL ADVISOR. Acquiror has received the opinion of DLJ,
dated as of the Agreement Effective Date, to the effect that, as of such date,
the consideration to be paid in the Merger by Acquiror is fair to Acquiror's
stockholders from a financial point of view (and Acquiror has the right to
refer to that opinion, so long as such reference is in form and substance
satisfactory to DLJ, in the Joint Proxy Statement and other appropriate
filings with the Commission and mailings to its stockholders).
5.11 DUE AUTHORIZATION. The shares of Acquiror Stock and any Depositary
Shares issued in connection with the Merger as contemplated by this Agreement
will be duly authorized and will be validly issued, fully paid and
nonassessable.
5.12 NO ACTIVE BUSINESS. Subsidiary has not engaged in any business and does
not have any contractual liabilities, commitments, or obligations (other than
pursuant to this Agreement) or any assets (other than cash representing its
initial capitalization). Subsidiary has been formed solely for purposes of
effectuating the transactions contemplated by this Agreement and having such
transactions treated for federal income tax purposes as an acquisition of the
outstanding Tenneco Stock by Acquiror in exchange for Acquiror Stock through
the Merger of Subsidiary with and into Tenneco pursuant to this Agreement.
5.13 OWNERSHIP OF TENNECO STOCK. Neither Acquiror nor Subsidiary is
(i) an "Interested Stockholder" of Tenneco as defined in Article NINTH of
the Certificate of Incorporation of Tenneco or
(ii) an "interested stockholder" of Tenneco as defined in Section 203 of
the DGCL.
17
As of the Agreement Effective Date, Acquiror and its Affiliates own
(directly or indirectly, beneficially or of record) no shares of Tenneco Stock
and neither Acquiror nor any of its Affiliates own any rights to acquire any
shares of Tenneco Stock, except pursuant to this Agreement.
ARTICLE VI
COVENANTS OF THE PARTIES
6.1 CONDUCT OF TENNECO AND ITS SUBSIDIARIES.
(a) Between the Agreement Effective Date and the Effective Time, unless
Acquiror shall have consented in writing (such consent not to be unreasonably
withheld), and except for
(i) actions taken that either affect solely the Industrial Business or
the Shipbuilding Business or only adversely affect the Energy Business to a
de minimis extent and do not materially delay or prevent consummation of
the transactions contemplated hereby,
(ii) actions taken by Tenneco and its Affiliates and subsidiaries
(including the Energy Subsidiaries) in order to consummate any of the
Merger, the Spinoffs and the other transactions contemplated by this
Agreement or the Distribution Agreement, which actions are taken in good
faith and either are contemplated by this Agreement or the Distribution
Agreement (including the Corporate Restructuring Transactions described
therein) or do not have more than a de minimis effect on Tenneco or do not
materially delay or prevent consummation of the transactions contemplated
hereby, or
(iii) actions or matters set forth in EXHIBIT G attached hereto,
Tenneco shall, and shall cause each of the Energy Subsidiaries to:
(A) use its reasonable best efforts to
(I) operate the Energy Business in good faith and in the ordinary
course, consistent with past practices, including, without limitation,
with respect to the payment and administration of accounts payable and
the collection and administration of accounts receivable, inventory
management and control policies and implementation of capital programs
for the Energy Business in a timely manner,
(II) preserve substantially intact the present business organization
of the Energy Business,
(III) keep available, consistent with the past practices of the
Energy Business, the services of the present officers, employees and
consultants of Tenneco and each of the Energy Subsidiaries (to the
extent they customarily provide services to the Energy Business), and
(IV) preserve the relationships with customers, suppliers and others
having business dealings with the Energy Business,
it being understood that
(x) certain employees of Tenneco and the Energy Subsidiaries will
also be engaged in activities for the Industrial Business and the
Shipbuilding Business, and
(y) the failure of any officer, employee or consultant of the Energy
Business to remain an officer, employee or consultant of the Energy
Business or to become an officer, employee or consultant of Acquiror or
any subsidiary of Acquiror shall not constitute a breach of this
covenant;
(B) not amend or otherwise change the certificate of incorporation or
bylaws of Tenneco (except as may be necessary or appropriate to effect the
transactions contemplated hereby or by the Distribution Agreement);
18
(C) not issue or authorize the issuance of (except, as to Tenneco, in the
ordinary course of business consistent with past practices or as
contemplated in this Agreement) or the Distribution Agreement, any shares
of any class of the capital stock of Tenneco or any Energy Subsidiary
(other than New Preferred Stock) or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such
capital stock, or any other ownership interest (including, without
limitation, any phantom interest), of Tenneco or any of the Energy
Subsidiaries (other than the issuance of Rights and shares of Tenneco
Common Stock either
(I) in connection with any dividend reinvestment plan,
(II) upon the exercise of options granted prior to the Agreement
Effective Date,
(III) pursuant to the terms of any other Tenneco employee benefit
plan with an employee stock fund or employee stock ownership plan
feature,
(IV) in accordance with the Rights Agreement, or
(V) as is otherwise permitted pursuant to this Agreement or the
Distribution Agreement);
(D) not reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any class of the capital stock
of Tenneco or of any of the Energy Subsidiaries other than acquisitions by
a dividend reinvestment plan or by any Tenneco employee benefit plan with
an employee stock fund or employee stock ownership plan feature, consistent
with the terms thereof and applicable securities laws;
(E) not declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any class of the capital stock of Tenneco or any of the Energy
Subsidiaries, except:
(I) in the case of Tenneco, regular dividends (including the regular
dividend for the dividend period in which the Effective Time occurs)
with respect to the $4.50 Preferred Stock, the $7.40 Preferred Stock
and the New Preferred Stock and regular quarterly dividends on the
Tenneco Common Stock at such times and in such amounts as the Board of
Directors of Tenneco in its sole discretion determines;
(II) the Spinoffs;
(III) the issuance of New Preferred Stock; and
(IV) cash dividends declared and paid by any of the Energy
Subsidiaries;
(F) with respect to the individuals who will be executive officers or
employees of the Energy Business after the Effective Time, not:
(I) increase the compensation payable or to become payable to any of
such executive officers or employees except for increases in the
ordinary course of business in accordance with past practices;
(II) grant any severance or termination pay to, or enter into any
employment or severance agreement with, any executive officer of the
Energy Subsidiaries; or
(III) except as contemplated in this Agreement or in the Distribution
Agreement, establish, adopt, enter into or amend or take action to
accelerate any rights or benefits under, any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any such director, executive officer or
employee;
provided, however, that Tenneco may continue to provide benefits under
employee benefit plans and incentive compensation plans that are in effect
on the Agreement Effective Date;
(G) not take, or permit any of its subsidiaries in respect of which it
has the direct or indirect voting power to control to take, any action that
would reasonably likely result in any of the conditions to the
19
Merger set forth in ARTICLE VII of this Agreement not being satisfied or
that would materially impair the ability of Tenneco to consummate the
Spinoffs in accordance with the terms of the Distribution Agreement or the
Merger in accordance with the terms hereof or would materially delay such
consummation or that would disqualify either of the Spinoffs as a tax free
distribution within the meaning of Section 355 of the Code;
(H) not implement any change in its accounting principles, practices or
methods, other than as (X) may be required by GAAP, the Financial
Accounting Standards Board, the Commission or any other Governmental
Authority or oversight agency and (Y) relating solely to the Shipbuilding
Group and/or the Industrial Group;
(I) except in the ordinary course of business, consistent with past
practices, with respect to inventory or services or except where the effect
on the Energy Business would be de minimis, not, with respect to the Energy
Business, transfer, lease, license, sell, mortgage, pledge or dispose of
any property or assets included in the Energy Assets or otherwise encumber
any property or assets included in the Energy Assets;
(J) not release any third party from, or amend, modify or waive any
provisions of, any confidentiality or standstill agreement to which Tenneco
is a party (except any that relate solely to the Industrial Business or the
Shipbuilding Business);
(K) file on or before the due date therefor all tax returns required to
be filed by Tenneco or any Energy Subsidiary, which tax returns shall, to
the extent such tax returns relate to the Energy Business, be (i) complete
and correct in all material respects and (ii) prepared in accordance and on
a basis consistent with the elections, accounting methods, conventions and
principles of tax returns used for the most recent taxable periods for
which tax returns involving similar tax items have been filed; and
(L) not make, change or revoke any tax election relating to the Energy
Business to the extent such election may have more than a de minimis effect
on the Energy Business or Acquiror, or enter into any material agreement or
settlement regarding taxes relating to the Energy Business with any tax
authority to the extent such settlement or agreement may have a more than
de minimis effect on the Energy Business or Acquiror.
(b) Prior to the Effective Time, Tenneco shall cause all stock options
issued under the Option Plans (or to executives outside the Option Plans) to
be
(i) converted to options to acquire the stock of the Industrial Company
or the Shipbuilding Company;
(ii) exercised; and/or
(iii) cancelled.
Tenneco shall also cause all such options not held by employees of the Energy
Business to be so converted if not exercised or cancelled prior to the
Effective Time in accordance with their terms. All such options held by
employees of the Energy Business shall become exercisable prior to the
Effective Time and, if not exercised by the Effective Time, shall be
cancelled.
(c) Between the Agreement Effective Date and the Effective Time, Tenneco
shall cause the Industrial Subsidiary to succeed to sponsorship of the SECT.
To the extent the SECT continues to own Tenneco Stock, the SECT will
participate in the Merger, the Spinoffs and the conversion of shares pursuant
to SECTION 2.5 hereof (and the other transactions contemplated by this
Agreement and/or the Distribution Agreement) as any other stockholder of
Tenneco.
(d) Tenneco shall have the right, and shall use its reasonable best efforts
to, issue shares of New Preferred Stock prior to the Effective Time on the
following basis:
(i) the issuance may be effected through public sale or private placement
(either United States or foreign, but with a placement agent mutually and
reasonably acceptable to both Tenneco and Acquiror), or
20
if such sale or placement is not reasonably practicable under the
circumstances, through a dividend-in-kind to the holders of Tenneco Common
Stock, but shall in any event be in accordance with all applicable
securities and other Laws (and, if publicly issued or issued as a dividend-
in-kind, shall be listed on the NYSE);
(ii) the NPS Value shall be approximately 25% (but in no event 20% or
less) of the sum of:
(x) the NPS Value, plus
(y) the market value of all outstanding Tenneco Common Stock (as
determined as of the Effective Time pursuant to the same procedure as
applies to determining the NPS Value).
(e) Prior to the Effective Time, Tenneco shall cause the elimination of all
intercompany accounts (including accounts and notes receivable and payable)
between members of the Energy Group, the Shipbuilding Group and the Industrial
Group, as the case may be (except trade accounts incurred in the ordinary
course of business), as set forth in the Distribution Agreement.
(f) From and after the Agreement Effective Date, Tenneco shall afford
Acquiror and its officers, employees, representatives and agents the
opportunity to participate with Tenneco in the process of obtaining the
rulings set forth in the IRS Ruling Request, including the right to
participate in the submission of written materials by Tenneco to the Internal
Revenue Service, and in-person and telephonic conferences between Tenneco and
the Internal Revenue Service, to the extent such communications relate to the
IRS Ruling Request. Notwithstanding the foregoing, Tenneco shall have the
right, subject to prior consultation with Acquiror, to determine, in its
reasonable discretion, that Acquiror's participation in certain communications
with the Internal Revenue Service (or any other aspects of the rulings
process) may hinder or delay Tenneco's ability to obtain the rulings requested
in the IRS Ruling Request, in which case Acquiror will be precluded from such
participation; provided, that Tenneco shall promptly inform Acquiror of the
substance of any matter in which Acquiror does not participate.
(g) In the event that, between the Agreement Effective Date and the Closing
Date, the General Counsel or an Executive Vice President of Tenneco becomes
aware that the Energy Business has the realistic opportunity to exercise its
right of first refusal with respect to the acquisition of additional interests
in the Oasis pipeline or otherwise to acquire additional interests in the
Oasis pipeline, Tenneco shall notify Acquiror thereof and shall consult and
cooperate with Acquiror prior to exercising its right of first refusal or
making any acquisition proposal. Any exercise of such right of first refusal
or other acquisition of interests in the Oasis pipeline by the Energy Business
shall be subject to the consent of Acquiror, which consent shall not be
unreasonably withheld or delayed.
6.2 CONDUCT OF THE BUSINESS OF ACQUIROR AND ITS SUBSIDIARIES.
(a) Between the Agreement Effective Date and the Effective Time, neither
Acquiror nor Subsidiary nor any of their Affiliates shall:
(i) take any action that would be reasonably likely to result in any of
the conditions to the Merger set forth in ARTICLE VII of this Agreement not
being satisfied or that would impair the ability of Acquiror or Subsidiary
to consummate the Merger in accordance with the terms hereof or delay such
consummation;
(ii) acquire (directly or indirectly, beneficially or of record), any
shares of Tenneco Stock (or any rights to acquire any such shares, except
pursuant to this Agreement); or
(iii) amend or otherwise change its certificate of incorporation (except
as is contemplated by this Agreement in respect of the designation of the
Acquiror Preferred Stock), bylaws or other organizational documents;
provided, however, that the provisions of this clause (iii) shall not apply
to any Affiliate of Acquiror or Subsidiary if the amendment or other change
would not adversely effect any of the rights or benefits hereunder or under
any of the Ancillary Agreements of Tenneco or the holders of Tenneco Stock
(other than to a de minimis extent) or otherwise materially delay or
prevent the consummation of the transactions contemplated hereby.
(b) Acquiror shall not, and shall not permit any of its subsidiaries
(including Subsidiary) to, take or cause or permit to be taken any action that
would disqualify either of the Spinoffs as a tax-free distribution within the
meaning of Section 355 of the Code.
21
(c) Between the Agreement Effective Date and the Effective Time, Subsidiary
shall not engage in any activities of any nature except as provided in, or in
connection with the transactions contemplated by, this Agreement.
6.3 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Between the date of this Agreement and the Effective Time, and except as
may otherwise be required by applicable law, each of Tenneco and Acquiror
shall (and shall cause its subsidiaries and officers, directors, employees,
auditors and agents to) afford the officers, employees and agents of the other
party (the "RESPECTIVE REPRESENTATIVES") reasonable access at all reasonable
times to its officers, employees, agents, properties, offices, plants and
other facilities, books and records, and shall furnish such Respective
Representatives with all financial, operating and other data and information
as may be reasonably requested, in each case to the extent that such access
and disclosure would not:
(i) violate the terms of any agreement to which the disclosing party or
any of its Affiliates is bound or any applicable law or regulation; or
(ii) impair any attorney-client privilege of the disclosing party.
Notwithstanding the foregoing, Tenneco shall not be required (and shall not
be required to cause its subsidiaries and officers, directors, employees,
auditors and agents) to provide the access, data and information described in
the preceding sentence with respect to the Industrial Business or the
Shipbuilding Business unless Acquiror has a reasonable interest in obtaining
such access, data or information in connection with the Merger.
(b) All information obtained by Tenneco, Acquiror or their Respective
Representatives pursuant to SECTION 6.3(A) hereof shall be kept confidential
in accordance with the confidentiality agreement, dated March 28, 1996,
executed by Acquiror and the confidentiality agreement, dated June 12, 1996,
executed by Tenneco.
(c) The Industrial Subsidiary and the Shipbuilding Subsidiary (and their
respective direct and indirect subsidiaries and Affiliates) shall be deemed
third party beneficiaries of this SECTION 6.3 and all other provisions of this
Agreement necessary or appropriate for purposes of enforcing this SECTION 6.3.
6.4 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) For a period of six years after the Effective Time, Acquiror shall not
cause or permit any amendment, repeal or other modification of the provisions
of
(i) Article IV, Section 14 of the by-laws of the Surviving Corporation,
as set forth in EXHIBIT H attached hereto, or
(ii) Article Eighth of the certificate of incorporation of the Surviving
Corporation,
in either case in any manner that would adversely affect the rights thereunder
of individuals who at any time prior to the Effective Time were directors,
officers or employees of Tenneco or any of its subsidiaries or Affiliates or
who are otherwise entitled to indemnification pursuant to such provisions in
respect of actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by this
Agreement and the Distribution Agreement), unless such modification is
required by the DGCL or applicable federal law, and then only to the extent of
such applicable requirements of the DGCL or federal law. To the extent the
Surviving Corporation is unable for any reason to fulfill its obligations
under the bylaw provisions set forth in EXHIBIT H attached hereto, Acquiror
agrees to pay, perform and discharge all such obligations.
(b) Prior to the Effective Time, Tenneco shall, and from and after the
Effective Time the Acquiror and the Surviving Corporation jointly and
severally shall, indemnify, defend and hold harmless each Person who is now,
has been at any time prior to the date of this Agreement or who becomes prior
to Effective Time an officer, director or employee of Tenneco or any of its
subsidiaries (collectively, the "INDEMNIFIED PARTIES") against all losses,
expenses, claims, damages, liabilities or amounts that are paid in settlement
of, with the approval of the
22
indemnifying party (which approval shall not unreasonably be withheld), or
otherwise in connection with any claim, action, suit, proceeding or
investigation (a "CLAIM"), based in whole or in part on the fact that such
Person is or was a director, officer or employee of Tenneco or any of its
subsidiaries and arising out of actions or omissions occurring at or prior to
the Effective Time (including, without limitation, the transactions
contemplated by this Agreement and the Distribution Agreement), whether or not
such Claim was asserted prior to, at or after the Effective Time, in each case
to the fullest extent permitted under the DGCL or other applicable law (and
shall pay expenses in advance of the final disposition of any such Claim to
each Indemnified Party to the fullest extent permitted under the DGCL or other
applicable law, upon receipt from the Indemnified Party to whom expenses are
advanced of any undertaking to repay such advances required by Section 145(e)
of the DGCL or other applicable law). Notwithstanding anything contained
herein, Tenneco's obligation to indemnify any such person pursuant to this
SECTION 6.4 shall not affect the allocation of liability among the Energy
Group, the Industrial Group and Shipbuilding Group pursuant to the
Distribution Agreement and any corresponding indemnification rights
thereunder.
(c) Without limiting the generality of the foregoing, in the event any Claim
is brought against any Indemnified Party (whether arising before or after the
Effective Time):
(i) the Indemnified Party may retain counsel satisfactory to him with the
consent of Tenneco (or the consent of Acquiror and the Surviving
Corporation after the Effective Time) which consent of Tenneco (or, after
the Effective Time, Acquiror and the Surviving Corporation) with respect to
such counsel retained by the Indemnified Party may not be unreasonably
withheld or delayed;
(ii) Tenneco (or, after the Effective Time, Acquiror and the Surviving
Corporation) shall pay all reasonable fees and expenses of such counsel for
the Indemnified Party promptly as statements therefor are received; and
(iii) Tenneco (or, after the Effective Time, Acquiror and the Surviving
Corporation) will use all reasonable efforts to assist in the vigorous
defense of any such matter, provided that none of Tenneco, Acquiror or the
Surviving Corporation shall be liable for any settlement of any Claim
effected without its written consent, which consent, however, shall not be
unreasonably withheld.
Any Indemnified Party wishing to claim indemnification under this SECTION 6.4,
upon learning of any such Claim, shall notify Tenneco (or, after the Effective
Time, Acquiror and the Surviving Corporation) (but any failure so to notify
shall not relieve Tenneco, Acquiror or the Surviving Corporation from any
liability which it may have under this SECTION 6.4, except to the extent such
failure materially prejudices such party), and shall deliver to Tenneco (or,
after the Effective Time, Acquiror and the Surviving Corporation) any
undertaking required by Section 145(e) of the DGCL or other applicable law.
The Indemnified Parties as a group may retain only one law firm to represent
them with respect to each such Claim unless there is, under applicable
standards of professional conduct, a conflict on any significant issue between
the positions of any two or more Indemnified Parties.
(d) (i) MAINTENANCE OF D&O POLICIES. On or prior to the Closing Date,
Tenneco shall provide Acquiror with copies and a schedule of those Directors'
and Officers' Liability Insurance Policies which Tenneco shall enter into
effective as of the Closing Date (the "D&O POLICIES"). For a period of seven
years after the Effective Time, Acquiror and the Surviving Corporation shall
cause to be maintained in full force and effect the D&O Policies. Acquiror and
the Surviving Corporation shall be jointly and severally responsible for
payment of all premiums due as respects the D&O Policies and shall take all
other actions necessary or appropriate to maintain the D&O Policies in full
force and effect (other than to the extent the available limit of liability of
any such D&O Policy may be reduced or exhausted solely as the result of the
payment of claims thereunder) for the agreed term of seven years after the
Effective Time. If at any time an insurance carrier under any of the D&O
Policies becomes unable or unwilling, or it becomes probable that such
insurance carrier will be unable or unwilling (which determination shall be
made in the reasonable discretion of the Industrial Subsidiary), to fulfill
any of its obligations under any D&O Policy, whether due to such insurance
carrier's dissolution, bankruptcy, insolvency or otherwise, then Acquiror and
the Surviving Corporation shall obtain a directors' and officers' liability
23
insurance policy in substitution (with an insurance carrier acceptable to the
Industrial Subsidiary) of each D&O Policy under which such insurance carrier
was to provide coverage (a "REPLACEMENT D&O POLICY"), which shall provide at
least the same coverage and amounts, and contain terms and provisions which
are no less favorable to the insured parties, as existed under the D&O Policy
so replaced. Acquiror and the Surviving Corporation shall pay any costs
associated with the obtaining and maintenance of any Replacement D&O Policy as
contemplated hereby.
(ii) OWNERSHIP AND ADMINISTRATION OF POLICIES. The parties hereto agree that
the D&O Policies and any Replacement D&O Policy shall be owned by the
Industrial Subsidiary. From and after the Effective Time, the Industrial
Subsidiary shall be solely responsible for all aspects of service and
administration of such policies (other than the payment of any premiums due),
including the notification to insurers, and the management, negotiation and
settlement, of any claims made under the D&O Policies and any Replacement D&O
Policy. From and after the Effective Time, Acquiror and the Surviving
Corporation shall have the right to participate in the negotiation and
participate in and consent to settlement (such consent not to be unreasonably
withheld or delayed) of any claim under the D&O Policies and any Replacement
D&O Policy for which, and then only to the extent, that either is obligated to
indemnify any of the present or former directors or officers of Tenneco or any
of its present or past subsidiaries ("DIRECTORS OR OFFICERS") for liabilities
associated with such claim. The Industrial Subsidiary's responsibilities for
administering and servicing the D&O Policies and any Replacement D&O Policy
shall in no manner restrict, reduce, limit or impair any of the Directors' or
Officers' rights to indemnification from Acquiror, the Surviving Corporation
or their respective successors or assigns in accordance with any applicable
Law, statute, charter or bylaw provision.
(iii) COOPERATION. Acquiror and the Surviving Corporation shall cooperate
with the Directors and Officers in the defense and settlement of any claim
made against them based upon or arising out of any actual or alleged wrongful
act (as such term may be defined in the applicable D&O Policies or Replacement
D&O Policy) occurring at or prior to the Effective Time. Acquiror and the
Surviving Corporation shall provide any reasonable assistance or information
that may be required by a Director or Officer in connection with any such
claim. Neither Acquiror, the Surviving Corporation nor any of their respective
representatives shall cause any action or inaction that could reasonably be
expected to jeopardize or otherwise impair the rights or ability of the
Directors or Officers to recover loss amounts due under the D&O Policies or
any Replacement D&O Policy.
(e) Neither Acquiror nor the Surviving Corporation shall take any action
that could reasonably be expected to jeopardize or otherwise interfere with
the ability of any of the Indemnified Parties to collect any proceeds payable
under any of the D&O Policies.
(f) Each of Tenneco, Acquiror and Subsidiary acknowledges and agrees that
the Industrial Subsidiary's responsibilities hereunder for Claims
Administration and Insurance Administration shall not relieve any Person
submitting an insured claim under any of the D&O Policies of
(i) the primary responsibility for giving notice of such insured claim
accurately, completely and in a timely manner, or
(ii) any other right or responsibility which such Person may have
pursuant to the terms of any of the D&O Policies.
(g) This SECTION 6.4 (and all other provisions of this Agreement necessary
or appropriate for purposes of enforcing this SECTION 6.4) is intended to be
for the benefit of, and shall be enforceable by, the Industrial Subsidiary and
the Indemnified Parties, their heirs and personal representatives and shall be
binding on Tenneco, the Surviving Corporation and Acquiror and each of their
respective successors and assigns.
6.5 NOTIFICATION OF CERTAIN MATTERS. Between the Agreement Effective Date
and the Effective Time, Tenneco and Acquiror shall give prompt notice to the
other of :
(i) the occurrence or nonoccurrence of any event, the occurrence or
nonoccurrence of which would likely cause
24
(A) any of its representations or warranties contained in this
Agreement to be untrue or inaccurate, or
(B) any of its covenants, conditions or agreements contained in this
Agreement not to be complied with or satisfied; and
(ii) its (or in the case of Acquiror, Acquiror's or Subsidiary's) failure
to comply with or satisfy any of its covenants, conditions or agreements to
be complied with or satisfied by it (or, in the case of Acquiror, Acquiror
or Subsidiary) at or prior to the Effective Time;
provided, however, that the delivery of any notice pursuant to this SECTION
6.5 shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
6.6 TAX TREATMENT.
(a) Each of Tenneco, on the one hand, and Acquiror and Subsidiary, on the
other hand, intend the Merger to qualify as a reorganization under Code
Section 368(a)(1)(B) and the Spinoffs to be treated as tax-free distributions
under Code Section 355, and each such party shall use its reasonable best
efforts to cause the Merger and Spinoffs to so qualify. Neither Tenneco, on
the one hand, nor Acquiror or Subsidiary, on the other hand, shall take any
action which might cause
(i) the Merger to fail to qualify as a reorganization under Code Section
368(a)(1)(B),
(ii) the Spinoffs to fail to qualify as tax free distributions under Code
Section 355,
(iii) any other transfer described in the Corporate Restructuring
Transactions that is intended (as described in Tenneco's request for
rulings from the Internal Revenue Service) to qualify as a tax free
transfer under Code Sections 332, 351, 355 or 368 to fail to so qualify, or
(iv) Tenneco or any Energy Subsidiary to recognize any gains relating to
deferred intercompany transactions or excess loss accounts between or among
any members of the affiliated group of corporations of which Tenneco is the
common parent (other than those deferred intercompany gains listed on
EXHIBIT I attached hereto).
(b) In furtherance of SECTION 6.6(A) above, Tenneco shall make the
representations set forth in EXHIBIT J attached hereto, and such other
representations as are reasonably necessary to ensure the tax-free treatment
of the Merger, Spinoffs and related transactions described in SECTION 6.6(A)
above, and shall assure the continuing accuracy of such representations.
(c) In furtherance of SECTION 6.6(A) above, Acquiror and Subsidiary shall
each make the representations set forth in EXHIBIT J attached hereto, and such
other representations as are reasonably necessary to ensure the tax-free
treatment of the Merger, Spinoffs and related transactions described in
SECTION 6.6(A) above, and shall assure the continuing accuracy of such
representations.
(d) The Industrial Subsidiary and the Shipbuilding Subsidiary (and their
respective direct and indirect subsidiaries and Affiliates) shall be deemed
third party beneficiaries of this SECTION 6.6 and all other provisions of this
Agreement necessary or appropriate for purposes of enforcing this SECTION 6.6.
6.7 REGISTRATION STATEMENT; JOINT PROXY STATEMENT; NPS MATERIALS; TENDER AND
EXCHANGE MATERIALS.
(a) As promptly as practicable after the Agreement Effective Date, Tenneco
and Acquiror shall prepare and file, or cause to be prepared and filed, with
the Commission a joint proxy statement (the "JOINT PROXY STATEMENT") and other
proxy solicitation materials relating to the Stockholders' Meeting (as defined
in SECTION 6.8 hereof), and Acquiror shall prepare and file, or cause to be
prepared and filed, with the Commission a registration statement on Form S-4
in which the Joint Proxy Statement shall be included as a prospectus (the
"REGISTRATION STATEMENT"), in connection with the registration under the
Securities Act of the shares of Acquiror Stock (and any Depositary Shares) to
be issued to the stockholders of Tenneco pursuant to the Merger.
25
Each of Acquiror and Tenneco shall furnish or cause to be furnished to the
other party all information concerning itself and its subsidiaries as the
other party may reasonably request in connection with such actions and the
preparation of the Registration Statement and the Joint Proxy Statement (and
in connection with the preparation of the NPS Materials and the Tender and
Exchange Materials). Each of Acquiror and Tenneco hereby agree to take, and to
cause their respective subsidiaries to take,
(i) such actions as may be required to have the Registration Statement
and, to the extent applicable, the NPS Materials and the Tender and
Exchange Materials declared effective under the Securities Act and to have
the Joint Proxy Statement cleared by the Commission, in each case as
promptly as practicable, including by consulting with each other as to, and
responding promptly to, any Commission comments with respect thereto, and
(ii) such actions as may be required to be taken under applicable state
securities or "blue sky" laws in connection with the issuance of shares of
Acquiror Stock (and any Depositary Shares) pursuant to the Merger.
As promptly as practicable after the Registration Statement shall have become
effective, each of Tenneco and Acquiror shall mail the Joint Proxy Statement
to its respective stockholders (and Tenneco and Acquiror shall attempt to
effect their respective mailings on the same date), and the Joint Proxy
Statement shall include the recommendation of the board of directors of
Tenneco in favor of adoption and approval of this Agreement and the Merger and
the Spinoffs, and of the board of directors of Acquiror in favor of approval
of the Stock Issuance (as defined in SECTION 6.8 hereof); provided, however,
that no obligation of Tenneco pursuant to this SECTION 6.7(A) shall be
required to be performed if there is a substantial risk that the performance
thereof would constitute a breach of the fiduciary duties of the board of
directors of Tenneco as determined by the board of directors of Tenneco in
good faith after consultation with and based upon the advice of its
independent legal counsel (who may be its regularly engaged independent legal
counsel).
(b) Acquiror covenants that the information supplied by or on behalf of
Acquiror for inclusion in the Registration Statement and the Joint Proxy
Statement shall not contain 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 not misleading, at any of:
(i) the time the Registration Statement (or any amendment or supplement
thereto) is declared effective;
(ii) the time the Joint Proxy Statement (or any amendment or supplement
thereto) is first mailed to the stockholders of Tenneco and Acquiror;
(iii) the time of each of the Stockholders' Meetings; and
(iv) the Effective Time.
Likewise, Acquiror covenants that the information and data supplied by or on
behalf of Acquiror for inclusion in the NPS Materials and Tender and Exchange
Materials (including, without limitation, all information and financial data
(pro forma or otherwise) relating to the business and operations of Tenneco
following consummation of the Merger supplied by or on behalf of Acquiror)
shall not contain 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 not misleading, at all times through the completion of (A)
in the case of the NPS Materials, the offering and sale of the New Preferred
Stock, and (B) in the case of the Tender and Exchange Materials, the tender
and exchange offers pursuant to the Debt Realignment.
(c) Tenneco covenants that the financial information (including pro forma
financial data and information) supplied or to be supplied by Tenneco or its
representatives for inclusion or incorporation by reference in the
Registration Statement or the Joint Proxy Statement (or the NPS Materials
and/or Tender and Exchange Materials) shall comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto, shall be prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto
26
or, in the case of unaudited financial information, as permitted by the rules
of the Commission) and shall fairly present (subject, in the case of unaudited
financial information, to normal, recurring audit adjustments) the financial
information reflected therein as of the dates thereof or for the periods then
ended. The Joint Proxy Statement shall, as it relates to the Tenneco
Stockholders' Meeting, comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder,
except that no representation is herein made by Tenneco with respect to
statements made in the Joint Proxy Statement based on information supplied by
Acquiror or any of its representatives for inclusion in the Joint Proxy
Statement or with respect to information concerning Acquiror or any of its
subsidiaries (including Subsidiary) incorporated by reference in the Joint
Proxy Statement. If at any time prior to the Effective Time any event or
circumstance relating to Acquiror or any of its subsidiaries (including
Subsidiary), their respective officers or directors, or Acquiror's plans and
intentions regarding its operation of the Surviving Corporation after the
Merger should be discovered by Acquiror or any of its subsidiaries (including
Subsidiary) that should be set forth in an amendment or a supplement to the
Registration Statement or Joint Proxy Statement (or in any of the NPS
Materials or Tender and Exchange Materials), Acquiror shall promptly inform
Tenneco in writing.
(d) Tenneco covenants that the information supplied by or on behalf of
Tenneco for inclusion in the Registration Statement and the Joint Proxy
Statement shall not contain 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 not misleading, at
(i) the time the Registration Statement (or any amendment or supplement
thereto) is declared effective,
(ii) the time the Joint Proxy Statement (or any amendment or supplement
thereto) is first mailed to the stockholders of Tenneco and Acquiror,
(iii) the time of each of the Stockholders' Meetings, and
(iv) the Effective Time.
Likewise, Tenneco covenants that the NPS Materials and Tender and Exchange
Materials shall not contain 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 not misleading, at all times through the
completion of (A) in the case of the NPS Materials, the offering and sale of
the New Preferred Stock, and (B) in the case of the Tender and Exchange
Materials, the tender and exchange offers pursuant to the Debt Realignment;
provided, that the foregoing provisions of this sentence shall not apply to
any information or financial data (including pro forma financial information
and data) supplied by or on behalf of Acquiror, including information and data
relating to the business and operations of Tenneco following consummation of
the Merger.
(e) Acquiror covenants that the financial information (including pro forma
financial data and information regarding Acquiror or Tenneco) supplied or to
be supplied by Acquiror or its representatives for inclusion or incorporation
by reference in the Registration Statement or the Joint Proxy Statement (or
the NPS Materials or Tender and Exchange Materials) shall comply as to form in
all material respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect thereto, shall
be prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited financial information, as permitted by the rules of the
Commission) and shall fairly present (subject, in the case of unaudited
financial information, to normal, recurring audit adjustments) the financial
information reflected therein as of the dates thereof or for the periods then
ended. Each of the Joint Proxy Statement, as it relates to the Acquiror Common
Stockholders' Meeting, and the Registration Statement will comply as to form
in all material respects with the provisions of the Exchange Act and the rules
and regulations thereunder or the Securities Act and the rules and regulations
thereunder, as applicable, except that no representation is herein made by
Acquiror with respect to statements made in the Joint Proxy Statement or
Registration Statement based on information supplied by Tenneco or any of its
representatives for inclusion in the Joint Proxy Statement or Registration
Statement or with respect to information concerning Tenneco or any of its
subsidiaries incorporated by reference in the Joint Proxy Statement or
27
Registration Statement. If at any time prior to the Effective Time any event
or circumstance relating to Tenneco or any of its subsidiaries, or their
respective officers or directors, should be discovered by Tenneco or any of
its subsidiaries which should be set forth in an amendment or a supplement to
the Registration Statement or Joint Proxy Statement (or in any of the NPS
Materials or Tender and Exchange Materials), Tenneco shall promptly inform
Acquiror in writing.
(f) None of the Joint Proxy Statement, the Registration Statement, the NPS
Materials or the Tender and Exchange Materials shall be filed or distributed,
and, prior to the termination of this Agreement, no amendment or supplement to
the Joint Proxy Statement or the Registration Statement shall be filed or
distributed, by or on behalf of Tenneco or Acquiror, without consultation with
the other party and its counsel.
6.8 STOCKHOLDERS' MEETINGS. Tenneco shall call and hold a meeting of its
stockholders (the "Tenneco Stockholders' Meeting") for the purpose of voting
upon the adoption and approval of this Agreement, the Merger and the Spinoffs.
Acquiror shall call and hold a meeting of its stockholders (the "Acquiror
Common Stockholders' Meeting") for the purpose of voting upon the approval of
the issuance of Acquiror Common Stock in connection with the Merger as
contemplated by this Agreement (the "Stock Issuance") (the Acquiror Common
Stockholders' Meeting and the Tenneco Stockholders' Meeting being collectively
referred to herein as the "Stockholders' Meetings"). Each of Tenneco and
Acquiror shall use its reasonable best efforts to schedule and hold their
respective Stockholders' Meetings so that the Acquiror Common Stockholders'
Meeting occurs at least one business day prior to the Tenneco Stockholders'
Meeting, and otherwise so as not to delay the transactions contemplated hereby
(it being intended that the Joint Proxy Statement shall be mailed and the
Stockholders' Meetings shall be scheduled to occur as soon as practicable
after the receipt of the IRS Ruling Letter). Each of Tenneco and Acquiror
shall use its reasonable best efforts to solicit from its stockholders proxies
in favor of the approval and adoption of this Agreement, the Merger and the
Spinoffs or the Stock Issuance, as applicable, and shall take all other action
necessary or advisable to secure the vote or consent of stockholders required
therefor by applicable Law and/or its certificate of incorporation or other
governing instrument or document. The stockholders of Tenneco will vote on the
Spinoffs and the Merger as a single transaction. Notwithstanding the
foregoing, Tenneco shall not be required to take any action if there is a
substantial risk that the subject action would constitute a breach of the
fiduciary duties of the board of directors of Tenneco as determined by the
board of directors of Tenneco in good faith after consultation with and based
upon the advice of independent legal counsel (who may be its regularly engaged
independent legal counsel).
6.9 FURTHER ACTION; REASONABLE BEST EFFORTS.
(a) Upon the terms and subject to the provisions of this Agreement, each of
the parties hereto shall use its reasonable best efforts to take, or cause to
be taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations promptly
to consummate and make effective the transactions contemplated hereby and by
the Distribution Agreement (subject, however, to the vote of the stockholders
of Tenneco and, to the extent required, Acquiror as provided herein),
including, without limitation, using its reasonable best efforts to obtain all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of Governmental Authorities and parties to contracts with Tenneco and,
to the extent required, Acquiror and their respective subsidiaries as are
necessary for the consummation of the transactions contemplated by this
Agreement. Each party hereto shall promptly consult with each other party with
respect to, and provide to each other party all such information or
documentation which shall be reasonably requested with respect to, all filings
made by such party with any Governmental Authority in connection with this
Agreement and the transactions contemplated hereby. In case at any time after
the Effective Time any further action is necessary or desirable to carry out
the purposes of this Agreement, the proper officers and directors of each
party to this Agreement shall use their reasonable best efforts to take all
such action.
(b) Between the Agreement Effective Date and the Closing Date,
(i) Tenneco and Acquiror shall, and shall cause their respective
Affiliates and representatives to, consult, cooperate and work together in
good faith and with reasonable best efforts and all deliberate speed to
attempt jointly to obtain a favorable resolution prior to the Effective
Time with respect to pending
28
regulatory proceedings affecting the Energy Business, including sharing
ideas and information concerning alternative approaches to resolving such
regulatory proceedings and coordinating the timing and content of
communications with customers of the Energy Business, affecting the Energy
Business, and regulatory authorities having jurisdiction over the
operations of the Energy Business; provided, that any settlement (or
proposed settlement) of any such regulatory proceedings shall require the
consent of both Tenneco and Acquiror, such consent not to be arbitrarily
withheld; and
(ii) Tenneco shall, and shall cause its Affiliates and representatives
to, consult and work with Acquiror and its Affiliates and representatives
to attempt to obtain favorable resolutions of material litigation affecting
the Energy Business; provided that, except as otherwise set forth on
EXHIBIT G attached hereto, any settlement (or proposed settlement) of any
such litigation shall require the consent of Acquiror, such consent not to
be arbitrarily withheld.
(c) Except as set forth on EXHIBIT G attached hereto, between the Agreement
Effective Date and the Closing Date, the Energy Business shall not incur any
additional off balance sheet indebtedness for the purpose of monetization of
any Energy Assets. Subject to the terms of the previous sentence, Acquiror and
Tenneco shall consult and cooperate with each other with respect to off-
balance sheet financing opportunities for the Australian assets of the Energy
Business, the Orange Cogeneration Project and the South Sulawesi Project and
any such off-balance sheet financing may be incurred by mutual agreement
between Acquiror and Tenneco.
Between the Agreement Effective Date and the Closing Date, Tenneco shall
attempt to cooperate with Acquiror to the extent reasonably requested by
Acquiror in connection with sales by the Energy Business after the Closing
Date of material Energy Assets; provided that any such transactions shall be
subject to the covenants, restrictions and limitations set forth in SECTION
6.6 hereof.
(d) Between the Agreement Effective Date and the Closing Date, Tenneco
shall, to the extent permitted by law, consult and work in good faith with
Acquiror with respect to the payment and administration of accounts payable,
inventory levels and policies and the collection and administration of
accounts receivable of the Energy Business and the making of capital
expenditures by the Energy Business to preserve the value of the Energy
Business and not to artificially delay payment of accounts payable, accelerate
collections of accounts receivable, alter inventory levels or unreasonably
delay capital expenditures; provided, however, that Tenneco shall have the
right to effect the actions and transactions identified on EXHIBIT G attached
hereto. To the extent permitted by Law, Tenneco shall consult with Acquiror
with respect to other matters pertaining to the operation of the Energy
Business. Each of Tenneco and Acquiror shall designate one or more members of
management to act as coordinators with respect to the matters covered by this
SECTION 6.9.
(e) Each party shall use its reasonable best efforts to not take any action,
or enter into any transaction, that would cause any of its representations or
warranties contained in this Agreement to be untrue or result in a breach of
any covenant made by it in this Agreement.
(f) The Industrial Subsidiary shall be a deemed third party beneficiary of
this SECTION 6.9 and all other provisions of this Agreement necessary or
appropriate for purposes of enforcing this SECTION 6.9.
6.10 PUBLIC ANNOUNCEMENTS. Each party hereto shall consult with each other
before issuing any press release or otherwise issuing any other similar
written public statement with respect to this Agreement or the Merger and
shall not issue any such press release or make any such public statement
without the prior consent of each other party, which shall not be unreasonably
withheld; provided, however, that a party may, without the prior consent of
any other party, issue such press release or other similar written public
statement as may be required by law or any listing agreement with a national
securities exchange to which Tenneco or Acquiror is a party if it has used all
reasonable efforts to consult with such other party and to obtain such party's
consent but has been unable to do so in a timely manner. Further, the parties
shall use their respective reasonable best efforts to coordinate and jointly
schedule and interface with the various Governmental Authorities and ratings
agencies and other applicable bodies and groups involved or otherwise
interested in the transactions contemplated by this Agreement.
29
6.11 LISTING OF ACQUIROR COMMON STOCK AND DEPOSITARY SHARES. Acquiror shall
use its reasonable best efforts to cause the shares of Acquiror Common Stock
and any Depositary Shares to be issued in or in connection with the Merger to
be approved for listing on the NYSE and any other national securities exchange
on which shares of Acquiror Common Stock may at such time be listed, subject
to official notice of issuance prior to the Effective Time.
6.12 RIGHTS AGREEMENT. Except as contemplated by this Agreement, prior to
the Effective Time the Board of Directors of Tenneco shall not, without the
prior written approval of Acquiror,
(i) amend or supplement the Rights Agreement in any manner that would
cause either a "Triggering Event" or a "Distribution Date" (in each case as
defined in the Rights Agreement) to occur or to be deemed to have occurred
solely by reason of the execution of this Agreement and the consummation of
the transactions contemplated hereby, or
(ii) redeem the Rights.
6.13 THE SPINOFFS. Prior to the Closing, Tenneco shall enter into the
Distribution Agreement (with only such amendments or modifications as are not
prejudicial, other than to a de minimis extent, to the Energy Business or do
not materially delay or prevent consummation of the Merger) and shall cause
the Industrial Subsidiary and the Shipbuilding Subsidiary to enter into the
Distribution Agreement (with only such amendments), and Tenneco shall take, or
cause to be taken, all actions and do, or cause to be done, all things
necessary to effect the Spinoffs pursuant to the terms of the Distribution
Agreement (with only such amendments). Notwithstanding the foregoing, after
prior notice to Acquiror, Tenneco may furnish information or enter into
negotiations regarding, or enter into an agreement for, any sale, merger or
other disposition transaction(s) involving either or both of the Shipbuilding
Business and/or the Industrial Business, or any portion of either (an "S/I
TRANSACTION"), which may render either or both of the Spinoffs (or any portion
thereof) impossible or impracticable; provided, that Tenneco shall not solicit
any S/I Transaction involving the Industrial Subsidiary, the Shipbuilding
Subsidiary, the Industrial Business as a whole, the Shipbuilding Business as a
whole or any other S/I Transaction which could be reasonably predicted to
render the Merger impossible or impracticable or materially delay or prevent
consummation thereof. Tenneco may enter into any such S/I Transaction in its
sole discretion if the subject S/I Transaction would not be adverse, other
than to a de minimis extent, to Acquiror or the Energy Business (including
with respect to any covenants or obligations of a party under this Agreement
or the Distribution Agreement) and would not render the Merger impossible or
impracticable or materially delay or prevent consummation thereof. If the S/I
Transaction would be so adverse to Acquiror or the Energy Business, or would
render the Merger impossible or impracticable or materially delay or prevent
consummation thereof, then S/I Transaction may be pursued and/or entered into
only (a) prior to the approval of this Agreement, the Merger and the Spinoffs
by the Tenneco stockholders and (b) if Tenneco's board of directors determines
in good faith, after consultation with and based upon the advice of
independent legal counsel (which may be Tenneco's regularly engaged
independent legal counsel), that there is a substantial risk that the failure
to do so would constitute a breach of its fiduciary duties under applicable
Law.
6.14 ANTITRUST MATTERS.
(a) Tenneco and Acquiror shall file with the Federal Trade Commission and
the Department of Justice, as promptly as practicable but in any event within
20 business days of the Agreement Effective Date, the notification and report
form required for the transactions contemplated hereby and shall promptly
provide any supplemental information which may be reasonably requested in
connection therewith pursuant to the HSR Act, which notification, report and
supplemental information shall comply in all material respects with the
requirements of the HSR Act.
(b) Although the parties do not believe that the Merger has any antitrust
implications, Acquiror shall use all reasonable efforts to resolve antitrust
objections, if any, that may be asserted with respect to the transactions
contemplated hereby by the Federal Trade Commission, the Antitrust Division of
the Department of Justice or any other federal or state agency. Acquiror shall
make such divestitures, or enter into such hold-separate
30
agreements, as may be necessary to prevent the entry of, or effect the
dissolution of, any injunction, temporary restraining order or other order
that has the effect of preventing for any period of time the consummation of
the Merger in any respect. Acquiror shall reimburse Tenneco for reasonable
attorneys' fees and costs incurred by Tenneco in connection with defending any
antitrust investigation or other proceeding brought by any of the above
identified entities.
6.15 EMPLOYEE MATTERS.
(a) Prior to the Effective Time, Tenneco shall enter into the Benefits
Agreement and shall take the actions with respect to compensation and benefits
described elsewhere in this Agreement or in the Distribution Agreement.
(b) Acquiror shall provide, or shall cause the Surviving Corporation (or any
of its subsidiaries, as appropriate) to provide, to the employees and former
employees of the Energy Business and the dependents of either, as applicable,
the benefits described in EXHIBIT K attached hereto.
6.16 DEBT REALIGNMENT. Each of Tenneco and Acquiror shall use its reasonable
best efforts so that, immediately prior to the Spinoffs, the Debt Realignment
has been effected (with only such modifications as are not adverse, except to
a de minimis extent, to Acquiror, the Energy Business, the Industrial
Subsidiary or the Shipbuilding Subsidiary).
6.17 NO SOLICITATIONS. Tenneco shall immediately cease any existing
discussions or negotiations with any third parties conducted prior to the date
hereof with respect to any merger, consolidation, business combination, sale
of the Energy Business, sale of a Major Subsidiary, tender or exchange offer
or similar transaction involving the Energy Business as a whole or any Major
Subsidiary as a whole, other than the transactions contemplated by this
Agreement or the Distribution Agreement (an "ACQUISITION TRANSACTION").
Neither Tenneco nor any of its subsidiaries nor any of their respective
directors and officers shall, and Tenneco shall use its best efforts to ensure
that none of its or its subsidiaries' Affiliates, representatives or agents
shall, directly or indirectly, solicit any person, entity or group concerning
any Acquisition Transaction; provided, however, that, after prior notice to
Acquiror and prior to the approval of this Agreement, the Merger and the
Spinoffs by the Tenneco stockholders, Tenneco may furnish information or enter
into negotiations regarding, or enter into an agreement for, an Acquisition
Transaction if Tenneco's board of directors determines in good faith, after
consultation with and based upon the advice of independent legal counsel
(which may be Tenneco's regularly engaged independent legal counsel), that
there is a substantial risk that the failure to do so would be found to
constitute a breach of its fiduciary duties under applicable Law, but only in
response to a proposal (which may be subject to due diligence) for an
Acquisition Transaction received by Tenneco which the board of directors of
Tenneco determines in good faith after consultation with its financial
advisors is reasonably likely to result in consummation of an Acquisition
Transaction more favorable, from a financial point of view, to the
stockholders of Tenneco than the transactions contemplated hereby, taking into
account the financial responsibility of the party making such proposal, as
then reasonably determinable by Tenneco, and such party's ability, as then
reasonably determinable by Tenneco, to obtain regulatory approvals for such
Acquisition Transaction (a "HIGHER PROPOSAL"). Tenneco shall advise Acquiror
immediately if any proposal of or other indication of interest in a Higher
Proposal is received by Tenneco and the terms and conditions thereof and keep
Acquiror promptly informed of the status thereof.
6.18 PERFORMANCE OF AGREEMENT AND DISTRIBUTION AGREEMENT. After the
Effective Time, Acquiror shall, and shall cause the Surviving Corporation and
the Energy Subsidiaries to, perform their respective obligations under this
Agreement and the Distribution Agreement and their respective obligations
under each and every other agreement to be entered into pursuant to the
Distribution Agreement and/or the Spinoffs, and Acquiror hereby guarantees the
full and timely payment and performance of all of the respective obligations
and covenants of Tenneco, the Surviving Corporation and the Energy
Subsidiaries under this Agreement and the Distribution Agreement and their
respective obligations under each and every other agreement to be entered into
pursuant to the Distribution Agreement and/or the Spinoffs, which are to be
performed from and after the Effective Time. Without limiting the generality
of the foregoing sentence, the foregoing covenant and guarantee of Acquiror
shall
31
specifically be deemed to apply to the obligations of the Surviving
Corporation to make any payments due to the Industrial Subsidiary pursuant to
Section 6 of the Tax Sharing Agreement attached to the Distribution Agreement
in respect of any Tax Benefit attributable to any Debt Discharge Item (as
those terms are defined in the Tax Sharing Agreement). The Industrial
Subsidiary and the Shipbuilding Subsidiary are hereby designated as, and
deemed to be, third party beneficiaries of this SECTION 6.18 (and all other
provisions of this Agreement necessary or appropriate for purposes of
enforcing the terms of this SECTION 6.18). The covenants and guarantees of
Acquiror set forth in this SECTION 6.18 are not in limitation of or
substitution for, but are in addition to, the Guarantees attached hereto as
EXHIBIT L, which shall be executed by Acquiror and delivered to the Industrial
Subsidiary and the Shipbuilding Subsidiary on the Closing Date.
6.19 AFFILIATES OF TENNECO. Tenneco shall promptly deliver to Acquiror a
letter
(i) identifying all Persons who may be deemed affiliates of Tenneco under
Rule 145 of the Securities Act, including, without limitation, all
directors and executive officers of Tenneco, and
(ii) representing to Acquiror that Tenneco has advised the Persons
identified in such letter of the resale restrictions with respect to shares
of Acquiror Common Stock and any Depositary Shares received in connection
with the Merger imposed by applicable securities laws. Tenneco shall use
its reasonable best efforts to obtain from each Person identified in such
letter a written agreement, substantially in the form of EXHIBIT M.
Tenneco shall use its reasonable best efforts to obtain as soon as practicable
from any Person who may be deemed to have become an Affiliate of Tenneco after
Tenneco's delivery of the letter referred to above and prior to the Effective
Time, a written agreement substantially in the form of EXHIBIT M.
6.20 ANTITAKEOVER STATUTES. If any Takeover Statute is or may become
applicable to the transactions contemplated hereby, each of the parties hereto
and the members of its board of directors shall grant such approvals and take
such actions as are necessary so that the transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
any Takeover Statute on any of the transactions contemplated by this
Agreement; provided however, that no party hereto shall be required to take
any action if there is a substantial risk that the subject action would be
held to constitute a breach of the fiduciary duties of the board of directors
of the subject party, as determined by the subject board of directors in good
faith after consultation with and based upon the advice of independent legal
counsel (who may be the subject party's regularly engaged independent
counsel).
6.21 EQUITY ISSUANCE BY ACQUIROR. Acquiror intends, subject to market
conditions, to issue, after the Closing Date, $150,000,000 to $250,000,000 of
equity securities. The initial press release with respect to the transactions
contemplated hereby will include disclosure of Acquiror's intention to effect
such issuances of additional equity securities.
6.22 RUHRGAS AG. Between the Agreement Effective Date and the Closing Date,
Tenneco shall use its reasonable best efforts to repurchase for cash the
equity interest of Ruhrgas AG in Tenneco Energy Resources Corporation,
provided that the terms of any such repurchase shall be acceptable to
Acquiror. Acquiror shall have the right to participate in any discussions or
negotiations with Ruhrgas AG with respect to the foregoing.
6.23 ADDITIONAL COVENANTS OF ACQUIROR.
(a) From the Agreement Effective Date through the Effective Time, Acquiror
shall not take, enter into or propose, or allow any of its subsidiaries to
take, enter into or propose, any action or transaction (other than actions or
transactions expressly permitted under this Agreement) which is primarily for
the purpose of reducing the value of the transactions contemplated by this
Agreement and the Distribution Agreement to the stockholders of Tenneco.
(b) From the Agreement Effective Date through the Effective Time, Acquiror
shall not enter into any internal corporate restructuring involving Acquiror
and one or more of its direct or indirect subsidiaries.
32
(c) During the Black-out Period, except as expressly contemplated by this
Agreement or the Distribution Agreement in order to effect the transactions
described herein or therein:
(i) Acquiror and its subsidiaries shall carry on their respective
businesses in the usual, regular and ordinary course in substantially the
same manner as heretofore conducted and use all reasonable efforts to
preserve intact their present business organizations, and preserve their
relationships with customers, suppliers and others having business dealings
with them to the end that their goodwill and ongoing businesses shall not
be impaired in any material respect at the Effective Time.
(ii) Acquiror shall not, nor shall Acquiror permit any of its
subsidiaries to, nor shall Acquiror or any of its subsidiaries propose to,
(A) declare or pay any dividends on or make other distributions in respect
of any of its capital stock (other than intercompany dividends and regular
quarterly dividends on Acquiror Common Stock), (B) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (C) repurchase or otherwise
acquire any shares of capital stock.
(iii) Except for the issuance of shares of Acquiror Common Stock upon the
exercise of outstanding stock options disclosed in Section 5.2 hereof,
Acquiror shall not issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock of any
class, any debt or securities convertible into, or any rights, warrants or
options to acquire, any such shares or convertible securities or debt.
(iv) Acquiror shall not amend or propose to amend its Certificate of
Incorporation or By-laws or other organizational documents.
(v) Acquiror shall not, nor shall it permit any of its subsidiaries to,
acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof
or otherwise acquire or agree to acquire any assets, in each case which are
material, individually or in the aggregate, to Acquiror and its
subsidiaries taken as a whole.
(vi) Except for sales of inventory and services in the ordinary course of
business, Acquiror shall not, nor shall it permit any of its subsidiaries
to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease,
encumber or otherwise dispose of, any of its assets, which are material,
individually or in the aggregate, to Acquiror and its subsidiaries taken as
a whole.
(d) If the Stock Issuance is not approved by the requisite vote of the
holders of Acquiror Common Stock at the Acquiror Common Stockholders' Meeting,
Acquiror, prior to or as of the Effective Time, shall: (i) enter into the
Depositary Agreement with the Depositary so that the holders of Tenneco Common
Stock are issued Depositary Shares in connection with the Merger and such
holders of Depositary Shares will have rights equivalent to those of holders
of whole shares of Acquiror Preferred Stock (to the extent of their fractional
interest therein); and (ii) issue to the Depositary, and deliver to the
Depositary certificates for, the number of shares of Acquiror Preferred Stock
provided for in the SECTION 2.5 (E) (II) (B) hereof.
(e) From and after the Agreement Effective Date, Acquiror shall use its
reasonable best efforts, and shall cause its subsidiaries and Affiliates to
use their respective reasonable best efforts, to cause each of the "EPNGC
Facilities" (as defined in that certain $3 Billion Revolving Credit and
Competitive Advance Facility Agreement (the "$3 Billion Credit Agreement")
among Tenneco Inc., the several banks and other financial institutions (the
"Bank Group") from time to time parties to the $3 Billion Credit Agreement and
The Chase Manhattan Bank, as agent ("Chase"), to become in full force and
effect no later than the "Effective Date" under Section 3.1 of the $3 Billion
Credit Agreement, and to remain in full force and effect from said Effective
Date through the "Closing Date" under Section 3.2 of the $3 Billion Credit
Agreement. From and after the Agreement Effective Date, Tenneco shall use its
reasonable best efforts, and shall cause its subsidiaries and Affiliates to
use their respective reasonable best efforts, to cause the $3 Billion Credit
Agreement to become in full force and effect in order to effect the
transactions contemplated by the Debt Realignment.
33
ARTICLE VII
CONDITIONS PRECEDENT
7.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party hereto to effect the Merger and the other
transactions contemplated herein shall be subject to the satisfaction, at or
prior to the Closing, of the following conditions, any or all of which may be
waived, in whole or in part, to the extent permitted by applicable law:
(a) EFFECTIVENESS OF THE REGISTRATION STATEMENT. The Registration
Statement shall have been declared effective by the Commission under the
Securities Act, no stop order suspending the effectiveness of the
Registration Statement shall have been issued by the Commission and no
proceedings for that purpose shall have been initiated or, to the knowledge
of Tenneco or Acquiror, threatened by the Commission.
(b) STOCKHOLDER APPROVAL. This Agreement, the Merger and the Spinoffs
(and/or any S/I Transaction, if requiring such approval) shall have been
approved and adopted by the requisite vote of the stockholders of Tenneco
in accordance with the certificate of incorporation of Tenneco and the
DGCL.
(c) HSR ACT. The waiting period under the HSR Act applicable to the
transactions contemplated hereby shall have expired or been terminated.
(d) OTHER APPROVALS. All authorizations, consents, orders and approvals
of, and declarations or filings with, and expirations of waiting periods
imposed by, any Governmental Authority or other Person which if not
obtained or filed would have a Material Adverse Effect on Acquiror or a
Material Adverse Effect on Tenneco shall have been obtained or filed, as
applicable, and shall be in full force and effect.
(e) NO ORDER. No Governmental Authority of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and which
materially restricts, prevents or prohibits consummation of the Merger or
any transaction contemplated by this Agreement; it being understood that
the parties hereto hereby agree to use their reasonable best efforts to
cause any such decree, judgment, injunction or other order to be vacated or
lifted as promptly as possible.
(f) NYSE LISTING. The Acquiror Common Stock and any Depositary Shares
issuable to stockholders of Tenneco in accordance with SECTION 2.5 hereof
shall have been authorized for listing on the NYSE upon official notice of
issuance.
(g) TAX RULING. Tenneco shall have received rulings from the Internal
Revenue Service (the "IRS RULING LETTER"), reasonably acceptable to Tenneco
and Acquiror, to the effect that:
(i) the distribution of the capital stock of the Industrial
Subsidiary on a pro rata basis to the stockholders of Tenneco as
contemplated under the Distribution Agreement will be tax-free for
federal income tax purposes to Tenneco under Section 355(c)(1) of the
Code and to the stockholders of Tenneco under Section 355(a) of the
Code;
(ii) the distribution of the capital stock of the Shipbuilding
Subsidiary on a pro rata basis to the stockholders of Tenneco as
contemplated under the Distribution Agreement will be tax-free for
federal income tax purposes to Tenneco under Section 355(c)(1) of the
Code and to the stockholders of Tenneco under Section 355(a) of the
Code;
(iii) The following distributions will be tax free to the respective
transferor corporations under Section 355(c)(1) or 361a) of the Code
and to the respective stockholders of the transferor corporation under
Section 355(a) of the Code: (A) the distribution by the Shipbuilding
Subsidiary of the capital stock of Tenneco Packaging Inc. to Tenneco
Corporation as contemplated under the Distribution Agreement, (B) the
distribution by Tenneco Corporation of the capital stock of the
Shipbuilding Subsidiary and the Industrial Subsidiary to Tennessee Gas
Pipeline Company as contemplated under
34
the Distribution Agreement and (C) the distribution by Tennessee Gas
Pipeline Company of the capital stock of the Shipbuilding Subsidiary
and the Industrial Subsidiary to Tenneco Inc. as contemplated under the
Distribution Agreement.
(h) SPINOFFS CONSUMMATED. The Distribution Agreement, in substantially the
form attached hereto with such changes as do not adversely affect, other than
to a de minimis extent, the Energy Business, shall have been duly executed and
delivered by each of Tenneco, the Industrial Subsidiary and the Shipbuilding
Subsidiary, and the transactions contemplated thereby, including the Spinoffs
(and/or any S/I Transaction) and the Debt Realignment, shall have been
consummated (with only such changes).
(i) TAX OPINION. Tenneco shall have received an opinion of Jenner & Block,
in form and substance substantially as set forth in EXHIBIT N attached hereto,
dated the Closing Date, which opinion may be based on appropriate
representations of Tenneco and Acquiror that are in form and substance
reasonably satisfactory to Jenner & Block. The condition set forth in this
SECTION 7.1(I) shall be deemed satisfied to the extent the matters referred to
as to be covered by the tax opinion are instead covered by the IRS Ruling
Letter.
(j) NEW PREFERRED STOCK. The New Preferred Stock shall have been issued by
Tenneco and shall be outstanding as set forth in SECTION 6.1(D) hereof and, if
publicly issued or issued as a dividend-in-kind to the stockholders of
Tenneco, shall have been authorized for listing on the NYSE upon official
notice of issuance.
(k) DEBT REALIGNMENT. The Debt Realignment shall have been effected in
accordance with EXHIBIT C attached hereto.
(l) CHARTER AMENDMENT. The Charter Amendment shall have become effective.
7.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF ACQUIROR AND SUBSIDIARY. The
obligations of Acquiror and Subsidiary to consummate the Merger and the other
transactions contemplated herein are also subject to the satisfaction, at the
Closing, of all of the following conditions, any one or more of which may be
waived, in whole or in part, by Acquiror and Subsidiary:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of Tenneco contained in this Agreement, without giving effect to
any notification to Acquiror delivered pursuant to SECTION 6.5 hereof,
shall be true and correct as of the Closing Date as though made on and as
of the Closing Date, except
(i) for changes specifically permitted by this Agreement, and
(ii) that those representations and warranties which address matters
only as of a particular date shall remain true and correct as of such
date,
except in any case for such failures to be true and correct which would
not, individually or in the aggregate, have a Material Adverse Effect on
Tenneco.
(b) AGREEMENTS AND COVENANTS. Tenneco shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the
Closing.
(c) OFFICERS' CERTIFICATES. Acquiror shall have received certificates,
dated the Closing Date, of
(i) the President or any Vice President of Tenneco certifying as to
the matters specified in SECTIONS 7.2(A) and (B) hereof and
(ii) the Secretary of Tenneco certifying as to (A) the content and
continuing effectiveness as of the Closing Date of the resolutions of
the board of directors of Tenneco approving this Agreement and the
transactions contemplated hereby, and (B) the fact that this Agreement
and the transactions contemplated hereby have been duly approved by the
requisite vote of the stockholders of Tenneco in accordance with the
certificate of incorporation of Tenneco and the DGCL and that such
approval is in full force and effect.
35
(d) CERTAIN LEGISLATION. There shall not have occurred any announcement
or introduction of legislation by an Appropriate Person as a result of
which Acquiror reasonably determines, in good faith after consultation with
Tenneco and its advisors, that there exists a reasonable likelihood that
the Spinoffs or the Merger would not be tax free for federal income tax
purposes to Tenneco and Acquiror. For purposes of this SECTION 7.2(D), an
"Appropriate Person" is a member of the House Ways and Means Committee or
the Senate Finance Committee, the President or a President-elect, a
cabinet-level member of the Executive Branch, an Assistant Secretary of the
Treasury, the Reporting Assistant Secretary of the Treasury for Tax Policy,
the Tax Legislation Counsel, the Chief of Staff of the Joint Committee of
Taxation or a current or presumptive Majority or Minority Leader of the
House or Senate.
7.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF TENNECO. The obligations of
Tenneco to consummate the transactions contemplated hereby are also subject to
the satisfaction, at the Closing, of all of the following conditions, any one
or more of which may be waived, in whole or in part, by Tenneco:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of Acquiror and Subsidiary contained in this Agreement, without
giving effect to any notification made by Acquiror to Tenneco pursuant to
SECTION 6.5 hereof, shall be true and correct as of the Closing Date, as
though made on and as of the Closing Date, except
(i) for changes specifically permitted by this Agreement, and
(ii) that those representations and warranties which address matters
only as of a particular date shall remain true and correct as of such
date,
except in any case for such failures to be true and correct which would not,
individually or in the aggregate, have a Material Adverse Effect on Acquiror.
(b) AGREEMENTS AND COVENANTS. Each of Acquiror and Subsidiary shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it
at or prior to the Closing.
(c) OFFICERS' CERTIFICATES. Tenneco shall have received certificates,
dated the Closing Date, of
(i) the President or any Vice President of each of Acquiror and
Subsidiary certifying as to the matters specified in SECTIONS 7.3(A)
and (B) hereof and
(ii) the Secretaries or Assistant Secretaries of Acquiror and
Subsidiary certifying as to (A) the content and continuing
effectiveness as of the Closing Date of the resolutions of the sole
stockholder of Subsidiary and of the boards of directors of Acquiror
and Subsidiary approving this Agreement and the transactions
contemplated hereby, and (B) the fact that the Stock Issuance has been
duly approved, if required, by the requisite vote of the stockholders
of Acquiror in accordance with the rules and regulations of the NYSE,
any other applicable Law and the certificate of incorporation and/or
other governing document or instrument of Acquiror, and that such
approval is in full force and effect, or, alternatively, that no such
vote of the stockholders is so required.
ARTICLE VIII
TERMINATION
8.1 GROUNDS FOR TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after adoption and approval of
this Agreement, the Merger and the Spinoffs by the stockholders of Tenneco and
approval of the Stock Issuance by the stockholders of Acquiror:
(i) by the mutual written agreement of Tenneco and Acquiror authorized by
their respective boards of directors;
36
(ii) by Tenneco or by Acquiror if the Merger shall not have been
consummated prior to June 30, 1997 unless such eventuality shall be due to
the failure of the party seeking to terminate this Agreement to perform or
observe any of the covenants, agreements and conditions hereof to be
performed or observed by such party on or prior to the Closing Date;
(iii) by Tenneco or by Acquiror if Tenneco enters into an S/I Transaction
pursuant to the last sentence of SECTION 6.13 above;
(iv) by Acquiror if
(A) there has been a material breach on the part of Tenneco in the
representations, warranties or covenants of Tenneco set forth herein,
or any failure on the part of Tenneco to comply with its obligations
hereunder or any other events or circumstances shall have occurred such
that, in any such case, any of the conditions to the consummation of
the Merger set forth in SECTIONS 7.1 or 7.2 hereof could not be
satisfied on or prior to the termination date contemplated by paragraph
(ii) of this SECTION 8.1,
(B) Tenneco's stockholders entitled to vote thereat do not adopt and
approve this Agreement, and the Merger and the Spinoffs as contemplated
by Section 7.1(B) hereof at the Tenneco Stockholders' Meeting,
(C) the board of directors of Tenneco withdraws, amends, or modifies
in a manner materially adverse to Acquiror its favorable recommendation
of this Agreement or the Merger, or approves an agreement for or
recommends to the stockholders of Tenneco an Acquisition Transaction,
provided that any action taken by Tenneco pursuant to PARAGRAPH (V)(A)
of this SECTION 8.1 or any public announcement by Tenneco relating
thereto shall not give rise to any right of termination by Acquiror, or
(D) there has occurred since the Agreement Effective Date of any
event, change or effect which, in the aggregate with all other events,
changes or effects (giving effect to both positive and negative events,
changes and events), reduces the value of the Energy Business as of the
Agreement Effective Date by more than $75,000,000, but excluding any
negative events, changes or effects which result from (A) any action by
Acquiror or any of its subsidiaries, Affiliates, officers, employees,
agents or representatives, (B) changes in general economic, financial
(including, without limitation, equity and debt) markets or industrial
conditions, and (C) any ruling by the Federal Energy Regulatory
Commission Administrative Law Judge in the proceedings regarding the
Energy Business pending as of the Agreement Effective Date before the
Federal Energy Regulatory Commission Administrative Law Judge, or
(v) by Tenneco if
(A) there has been a material breach on the part of Acquiror or
Subsidiary in the representations, warranties or covenants of Acquiror
or Subsidiary set forth herein, or any failure on the part of Acquiror
or Subsidiary to comply in any material respect with its obligations
hereunder or any other events or circumstances shall have occurred such
that, in any such case, any of the conditions to the consummation of
the Merger set forth in SECTIONS 7.1 or 7.3 hereof could not be
satisfied on or prior to the termination date contemplated by paragraph
(ii) of this SECTION 8.1,
(B) Tenneco's stockholders entitled to vote thereat do not adopt and
approve this Agreement,the Merger and the Spinoffs as contemplated by
SECTION 7.1(B) hereof at the Tenneco Stockholders' Meeting,
(C) the board of directors of Acquiror withdraws, amends, or modifies
in a manner materially adverse to Tenneco its favorable recommendation
of this Agreement, the Merger or the Stock Issuance, or approves an
agreement for or recommends to the stockholders of Acquiror an
Acquisition Transaction, provided that any action taken by Acquiror
pursuant to PARAGRAPH (IV)(A) of this SECTION 8.1 or any public
announcement by Acquiror relating thereto shall not give rise to any
right of termination by Tenneco, or
37
(D) there has occurred since the Agreement Effective Date any event,
change or effect which, in the aggregate with all other events, changes
or effects (giving effect to both positive and negative events, changes
and events), reduces the value of Acquiror as of the Agreement
Effective Date by more than $75,000,000, but excluding any negative
events, changes or effects which result from (i) any action by Tenneco
or any of its subsidiaries, Affiliates, officers, employees, agents or
representatives, and (ii) changes in general economic, financial
(including, without limitation, equity and debt) market or industrial
conditions; or
(vi) by Tenneco or by Acquiror (but only prior to the approval of this
Agreement by Tenneco's stockholders) if
(1) Tenneco receives a Higher Proposal that it advises Acquiror in
writing Tenneco wishes to accept and
(2) Acquiror does not make, within five business days of receipt of
written notice of Tenneco's desire to accept such Higher Proposal, an
offer that the board of directors of Tenneco believes, in good faith
after consultation with its financial advisors, is at least as
favorable, from a financial point of view, to the stockholders of
Tenneco as the Higher Proposal.
8.2 EFFECT OF TERMINATION. If this Agreement is terminated by Tenneco or by
Acquiror as permitted under SECTION 8.1 hereof, except as provided in SECTION
10.1(B) such termination shall be without liability to the terminating party,
or any stockholder, director, officer, employee, agent, consultant or
representative of such party, but such termination shall not relieve any other
party of any damages or other amounts for which it would otherwise be liable.
8.3 WAIVER. Any time prior to the Effective Time any party hereto, by action
taken or authorized by its board of directors, may, to the extent legally
allowed:
(i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties of the
other parties contained herein or in any document delivered pursuant
hereto, and
(iii) waive compliance by any of the other parties hereto with any of the
agreements or conditions contained herein. Any waiver of rights by any
party hereto shall be valid only if set forth in a written instrument
signed on behalf of such party.
ARTICLE IX
EXTENT AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS
9.1 SCOPE OF REPRESENTATIONS. Except as set forth in ARTICLES IV and V
hereof, the parties make no representations or warranties whatsoever, and each
party disclaims all liability and responsibility for any other representation,
warranty, statement or information made or communicated (orally or in writing)
to another party (including, but not limited to, any opinion, information or
advice which may have been provided to Acquiror or Subsidiary by any officer,
stockholder, director, employee, agent or consultant of Tenneco, Lazard or any
other agent or representative of Tenneco). Acquiror acknowledges and affirms
that it has made its own independent investigation, analysis and evaluation of
Tenneco and its subsidiaries, their properties and assets, operations,
business and prospects, and that it is relying exclusively upon such
investigation, analysis and evaluation in entering into this Agreement.
9.2 SURVIVAL. The representations, warranties, covenants and agreements set
forth in this Agreement and in any certificate delivered in connection
herewith shall survive until the Effective Time and, except for SECTIONS 2.3,
2.6, 6.2(B), 6.3(B), 6.4, 6.6, 6.9(A) AND (F), 6.10, 6.14(B), 6.15, 6.18, 9.1
AND 9.2 and ARTICLE X hereof and
38
EXHIBIT J attached hereto, shall terminate and expire at the Effective Time
and shall be of no force or effect thereafter. If the Merger is consummated,
no party to this Agreement (or any of its present or former Affiliates) shall
have any liability to any other party (or any of its present or former
Affiliates) for any breaches of this Agreement that occurred prior to the
Effective Time, whether or not known at the Effective Time.
ARTICLE X
MISCELLANEOUS
10.1 EXPENSES.
(a) All legal and other costs and expenses shall be paid by Acquiror,
Subsidiary or Tenneco, as the case may be, depending upon which party incurred
such expenses. Subsequent to the Merger, Acquiror shall cause the Surviving
Corporation promptly to pay any and all such costs and expenses (including,
without limitation, the fees and expenses of the Exchange Agent and Tenneco's
financial advisors, and all legal, accounting and actuarial fees and expenses
incurred by Tenneco in connection with this Agreement and the transactions
contemplated hereby) incurred by Tenneco prior to the Effective Time which
have not been paid as of such time.
(b) In the event that this Agreement shall be terminated pursuant to SECTION
8.1(III), 8.1(IV)(B), 8.1(V)(B) or 8.1(VI), Tenneco shall pay to Acquiror, as
liquidated damages, in exchange for a complete release of any liabilities of
Tenneco hereunder, the amount of $25,000,000 plus actual out of pocket
expenses (up to $10,000,000) incurred by Acquiror to third parties in
connection with the transactions contemplated hereby, payable to an account
specified by Acquiror in writing by wire transfer of immediately available
funds within 5 business days after the effective date of the subject
termination (except that (i) no such amounts shall be payable unless
concurrently therewith, Tenneco receives the aforesaid complete release (other
than with respect to the items referred to in clause (ii), as to which
Acquiror shall deliver a complete release concurrently with the receipt of
payment therefor) and (ii) the aforesaid payment for Acquiror's out of pocket
expenses shall not be payable unless and until 5 business days after receipt
of reasonably satisfactory documentation of the subject expenses).
Notwithstanding the foregoing, Tenneco shall have no obligations under this
SECTION 10.1(B) due to any termination of this Agreement pursuant to either
SECTION 8.1(IV)(B) or 8.1(V)(B) unless Tenneco's Board of Directors has
withdrawn, amended or modified in a manner materially adverse to Acquiror
(other than by reason of a matter referred to in SECTION 8.1(V)(A) hereof) its
recommendation concerning the Merger or the Spinoffs prior to the vote of
Tenneco's stockholders which is the subject of SECTION 8.1(IV)(B) or
8.1(V)(B), as the case may be.
(c) Acquiror shall cause the Surviving Corporation to pay any New York State
Tax on Gains Derived from Certain Real Property Transfers (the "Gains Tax"),
New York State Real Estate Transfer Tax and New York City Real Property
Transfer Tax (the "Transfer Taxes") and any similar taxes in any other
jurisdiction (and any penalties and interest with respect to such taxes) that
become payable in connection with the Merger, on behalf of the stockholders of
Tenneco. Tenneco and Acquiror shall cooperate in the preparation, execution
and filing of any required returns with respect to such taxes (including
returns on behalf of the stockholders of Tenneco) and in the determination of
the portion of the consideration allocable to the real property of Tenneco and
the Tenneco subsidiaries in New York State and City (or in any other
jurisdiction, if applicable). In order to effect the payment of any transfer
taxes subject to this SECTION 10.1(C), Tenneco shall establish a separately
maintained escrow account consisting of an adequate amount of cash from the
$25,000,000 of cash required to be on hand at Tenneco as of the Effective Time
pursuant to the Allocation Agreement. The terms of the Joint Proxy Statement
shall provide that the stockholders of Tenneco shall be deemed to have agreed
to be bound by the allocation established pursuant to this SECTION 10.1(C) in
the preparation of any return with respect to the Gains Tax and the Transfer
Taxes and any similar taxes, if applicable.
(d) This SECTION 10.1 (and all other provisions of this Agreement necessary
or appropriate for purposes of enforcing this SECTION 10.1) shall be
enforceable by the Industrial Subsidiary, which is hereby deemed a third party
beneficiary hereof.
39
10.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or mailed by
registered or certified mail, return receipt requested, to the parties at the
following addresses:
(A) If to Tenneco, to:
Tenneco Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
(B) If to the Acquiror or Subsidiary, to:
El Paso Natural Gas Company
One ▇▇▇▇ ▇▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Chairman and Chief Executive Officer
10.3 REMEDIES. Any party having any rights under any provision of this
Agreement will have all rights and remedies set forth in this Agreement and
all rights and remedies which such party may have been granted at any time
under any other agreement or contract and all of the rights which such party
may have under any law. Any party having any rights or remedies under this
Agreement will be entitled to enforce such rights specifically, without
posting a bond or other security, to recover damages by reason of any breach
of any provision of this Agreement and to exercise all other rights granted by
law.
10.4 CONSENT TO AMENDMENTS. Prior to the Effective Time, whether before or
after approval and adoption of this Agreement by the stockholders of Tenneco,
the provisions of this Agreement may be amended by a written agreement
executed and delivered by the parties hereto, subject to applicable law (and
shall be so amended if expressly required by the terms of this Agreement).
After the Effective Time, the provisions of this Agreement may be amended only
by a written agreement executed and delivered by Acquiror, the Surviving
Corporation and the Industrial Subsidiary. Any purported amendment to this
Agreement that does not strictly comply with the foregoing provisions of this
SECTION 10.4 shall be null and void ab initio. This SECTION 10.4 (and all
other provisions of this Agreement necessary or appropriate for purposes of
enforcing this SECTION 10.4) shall be enforceable by the Industrial
Subsidiary, which is hereby deemed a third party beneficiary hereof.
10.5 SUCCESSORS AND ASSIGNORS. No party hereto may assign or delegate any of
such party's rights or obligations under or in connection with this Agreement
without the written consent of the other parties hereto, and any attempted
assignment without such consent shall be null and void ab initio. All
covenants and agreements contained in this Agreement by or on behalf of any of
the parties hereto will be binding upon and enforceable against the respective
successors and assigns of such party and will be enforceable by and will inure
to the benefit of the respective successors and permitted assigns of such
party.
10.6 SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
10.7 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same Agreement.
10.8 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
40
10.9 NO THIRD-PARTY BENEFICIARIES. Except as expressly provided in SECTIONS
2.6(G), 2.6(H), 6.3, 6.4, 6.6, 6.9, 6.18, 10.1 and 10.4 hereof, this Agreement
will not confer any rights or remedies upon any person other than the parties
hereto and their respective successors and permitted assigns.
10.10 ENTIRE AGREEMENT. Except for the Confidentiality Agreements identified
in SECTION 6.3(B) hereof, this Agreement constitutes the entire agreement
among the parties and supersedes any prior understandings, agreements or
representations by or among the parties, written or oral, that may have
related in any way to the subject matter hereof.
10.11 CONSTRUCTION. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent and no rule
of strict construction will be applied against any party. The use of the word
"including" in this Agreement means "including without limitation" and is
intended by the parties to be by way of example rather than limitation.
10.12 INCORPORATION OF EXHIBITS. The Exhibits identified in this Agreement
are incorporated herein by reference and made a part hereof.
10.13 GOVERNING LAW. ALL QUESTIONS AND/OR DISPUTES CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS
HERETO SHALL BE GOVERNED BY THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS,
OF THE STATE OF DELAWARE. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES TO BE SUBJECT TO, AND HEREBY CONSENTS
AND SUBMITS TO, THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND OF
THE FEDERAL COURTS SITTING IN THE STATE OF DELAWARE.
41
IN WITNESS WHEREOF, the undersigned have executed this Agreement, as of the
date first written above.
TENNECO INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By __________________________________
Title: Vice President
EL PASO NATURAL GAS COMPANY
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
By __________________________________
Title: Senior Vice President and
General Counsel
EL PASO MERGER COMPANY
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
By __________________________________
Title: Vice President
42