-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dpzy9CzrRk1iXpjTwO2ySx2E0999IRT8GndLQQ5AbXOua6DiubjoNdwqotjqKBoA sqSK5GbHzsp69hWvNtMZ8A== 0000950137-99-004217.txt : 19991119 0000950137-99-004217.hdr.sgml : 19991119 ACCESSION NUMBER: 0000950137-99-004217 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 28 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACTIV CORP CENTRAL INDEX KEY: 0001089976 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS FOAM PRODUCTS [3086] IRS NUMBER: 362552989 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-15157 FILM NUMBER: 99760108 BUSINESS ADDRESS: STREET 1: 1900 WEST FIELD CT CITY: LAKE FOREST STATE: IL ZIP: 60045 BUSINESS PHONE: 8474822000 MAIL ADDRESS: STREET 1: 1900 WEST FIELD CT CITY: LAKE FOREST STATE: IL ZIP: 60045 FORMER COMPANY: FORMER CONFORMED NAME: TENNECO PACKAGING INC DATE OF NAME CHANGE: 19990706 10-Q 1 FORM 10-Q 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-Q (mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 1-15157 --------------------------- PACTIV CORPORATION (FORMERLY TENNECO PACKAGING INC.) (Exact name of registrant as specified in its charter) DELAWARE 36-2552989 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1900 WEST FIELD COURT 60045 LAKE FOREST, ILLINOIS (Zip Code) (Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (847) 482-2000 ------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X] Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Common stock, par value $.01 per share: 168,372,798 shares as of November 4, 1999. (See Note 9 to Notes to Combined Financial Statements.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS
PAGE ---- PART I--FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The Businesses of Pactiv Corporation Combined Statements of Income (Loss).............. 3 Combined Statements of Cash Flows................. 4 Combined Balance Sheets........................... 5 Statements of Changes in Combined Equity.......... 6 Combined Statements of Comprehensive Income (Loss)............................................ 7 Notes to Combined Financial Statements............ 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations......... 14 Item 3. Quantitative and Qualitative Disclosures About Market Risk........................................... 23 PART II--OTHER INFORMATION Item 1. Legal Proceedings*............................. 24 Item 2. Changes in Securities*......................... 24 Item 3. Defaults Upon Senior Securities*............... 24 Item 4. Submission of Matters to a Vote of Security Holders*.............................................. 24 Item 5. Other Information*............................. 24 Item 6. Exhibits and Reports on Form 8-K............... 24
- ------------ * No response to this item is included herein for the reason that it is inapplicable or the answer to such item is negative. GENERAL INFORMATION This Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, represents Pactiv Corporation's (formerly Tenneco Packaging Inc.) first quarterly report following a series of restructuring transactions completed by Tenneco Inc. on November 4, 1999. Pactiv Corporation is a supplier of specialty packaging products with operations in 19 countries. Pactiv Corporation includes the assets, liabilities, and operations of Tenneco Inc.'s specialty packaging and paperboard packaging businesses as well as certain of Tenneco Inc.'s corporate and administrative service operations. Management's Discussion and Analysis of Financial Condition and Results of Operations, which follows the financial statements and footnotes, contains a description of the transactions as well as a discussion of the results of operations for the quarter. CAUTIONARY STATEMENT AND "SAFE HARBOR" OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This Quarterly Report on Form 10-Q contains forward-looking statements regarding: (i) strategic alternatives including the planned sale of the interest in the containerboard joint venture company; (ii) the restructuring plan; (iii) expected effective tax rates; (iv) capital resources; and (v) the Year 2000 issue (relating to potential equipment and computer failures by or at the change in the century). See "Strategic Alternatives Analysis," "Restructuring and Other Charges," "Quarters Ended September 30, 1999 and 1998 and Nine Months Ended September 30, 1999 and 1998--Income Taxes," "Liquidity and Capital Resources," and "Year 2000" under "Management's Discussion and Analysis of Financial Condition and Results of Operations." These forward-looking statements are based on currently available competitive, financial and economic data and management's views and assumptions regarding future events (as defined below.) Because forward-looking statements involve risks and uncertainties, the plans, actions and actual results could differ materially. Among the factors that could cause plans, actions and results to differ materially from current 1 3 expectations are: (i) the general economic, political and competitive conditions in markets and countries where Pactiv operates, including currency fluctuations and other risks associated with operating in foreign countries and changes in distribution channels; (ii) governmental actions, including the ability to receive regulatory approvals and the timing of such approvals; (iii) changes in capital availability or costs; (iv) results of analysis regarding strategic alternatives; (v) changes in consumer demand and prices, including decreases in demand for Pactiv products and its customers' products and the resulting negative impact on revenues and margins from such products; (vi) the cost of compliance with changes in regulations, including environmental regulations; (vii) workforce factors such as strikes or labor interruptions; (viii) material substitutions or increases in the costs of raw materials; (ix) Pactiv's ability to integrate operations of acquired businesses quickly and in a cost-effective manner; (x) new technologies; (xi) the ability of Pactiv and those with whom it conducts business to timely resolve the Year 2000 issue, unanticipated costs of, problems with or delays in resolving the Year 2000 issue, and the costs and impacts if the Year 2000 issue is not timely resolved; (xii) changes by the Financial Accounting Standards Board or other accounting regulatory bodies of authoritative generally accepted accounting principles or policies; (xiii) the timing and occurrence (or non-occurrence) of transactions and events which may be subject to circumstances beyond Pactiv's control; and (xiv) the company's ability to recognize forecasted savings from its restructuring programs on a timely basis. 2 4 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS THE BUSINESSES OF PACTIV CORPORATION COMBINED STATEMENTS OF INCOME (LOSS) (UNAUDITED) (MILLIONS EXCEPT PER SHARE AMOUNTS)
THREE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- --------------- 1999 1998 1999 1998 ---- ---- ---- ---- REVENUES Net sales and operating revenues -- Specialty.............................................. $754 $701 $2,158 $2,062 Other.................................................. -- (5) -- 5 ---- ---- ------ ------ 754 696 2,158 2,067 Gain (loss) on sale of businesses and assets, net......... (1) (1) (22) (2) Other income (expense), net............................... 2 (6) 5 3 ---- ---- ------ ------ 755 689 2,141 2,068 ---- ---- ------ ------ COSTS AND EXPENSES Cost of sales (exclusive of depreciation shown below)..... 526 473 1,450 1,404 Engineering, research, and development.................... 9 6 27 19 Selling, general, and administrative...................... 104 92 310 266 Depreciation and amortization............................. 47 44 141 132 ---- ---- ------ ------ 686 615 1,928 1,821 ---- ---- ------ ------ INCOME BEFORE INTEREST EXPENSE, INCOME TAXES, AND MINORITY INTEREST.................................................. 69 74 213 247 Interest expense (net of interest capitalized)......... 38 33 106 100 Income tax expense..................................... 27 25 51 62 Minority interest...................................... -- 1 -- 1 ---- ---- ------ ------ INCOME FROM CONTINUING OPERATIONS........................... 4 15 56 84 Income (loss) from discontinued operations, net of income tax....................................................... 8 25 (155) 62 ---- ---- ------ ------ Income (loss) before extraordinary loss..................... 12 40 (99) 146 Extraordinary loss, net of income tax....................... -- -- (7) -- ---- ---- ------ ------ Income (loss) before cumulative effect of change in accounting principle...................................... 12 40 (106) 146 Cumulative effect of change in accounting principle, net of income tax................................................ -- -- (32) -- ---- ---- ------ ------ NET INCOME (LOSS)........................................... $ 12 $ 40 $ (138) $ 146 ==== ==== ====== ====== EARNINGS (LOSS) PER SHARE Basic earnings per share of common stock -- Continuing operations..................................... $.01 $.09 $ .33 $ .50 Discontinued operations................................... .05 .15 (.93) .37 Extraordinary loss........................................ -- -- (.04) -- Cumulative effect of change in accounting principle....... -- -- (.19) -- ---- ---- ------ ------ $.06 $.24 $ (.83) $ .87 ==== ==== ====== ====== Diluted earnings per share of common stock -- Continuing operations..................................... $.01 $.09 $ .33 $ .50 Discontinued operations................................... .05 .15 (.93) .37 Extraordinary loss........................................ -- -- (.04) -- Cumulative effect of change in accounting principle....... -- -- (.19) -- ---- ---- ------ ------ $.06 $.24 $ (.83) $ .87 ==== ==== ====== ======
The accompanying notes to combined financial statements are an integral part of these combined statements of income. 3 5 THE BUSINESSES OF PACTIV CORPORATION COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED) (MILLIONS)
NINE MONTHS ENDED SEPTEMBER 30, ---------------- 1999 1998 ------- ----- OPERATING ACTIVITIES Income from continuing operations........................... $ 56 $ 84 Adjustments to reconcile income from continuing operations to cash provided by continuing operations -- Depreciation and amortization........................... 141 132 Deferred income taxes................................... 78 112 (Gain) loss on sale of businesses and assets, net....... 22 2 Allocated interest, net of tax.......................... 68 64 Changes in components of working capital -- Increase in receivables............................... (64) (38) Increase in inventories............................... (45) (8) (Increase) decrease in prepayments and other current assets............................................... 7 (5) Decrease in payables.................................. (50) (9) Decrease in taxes accrued............................. (29) (17) Increase (decrease) in interest accrued............... (1) -- Increase (decrease) in other current liabilities...... (21) 13 Other................................................... (79) (54) ------- ----- Cash provided by continuing operations...................... 83 276 Cash provided (used) by discontinued operations............. (76) 137 ------- ----- Net cash provided by operating activities................... 7 413 ------- ----- INVESTING ACTIVITIES Net proceeds related to the sale of discontinued operations................................................ 312 -- Net proceeds from sale of businesses and assets............. 30 13 Expenditures for plant, property, and equipment............. (114) (146) Acquisitions of businesses and assets....................... (7) (81) Expenditures for plant, property, and equipment and business acquisitions -- discontinued operations................... (1,129) (74) Investments and other....................................... 3 (41) ------- ----- Net cash used by investing activities....................... (905) (329) ------- ----- FINANCING ACTIVITIES Issuance of long-term debt.................................. 1,760 2 Retirement of long-term debt................................ (29) (15) Net increase (decrease) in short-term debt excluding current maturities of long-term debt.............................. (8) 12 Cash contributions from (distributions to) Tenneco, net..... (810) (90) ------- ----- Net cash provided (used) by financing activities............ 913 (91) ------- ----- Effect of foreign exchange rate changes on cash and temporary cash investments................................ 2 -- ------- ----- Increase (decrease) in cash and temporary cash investments............................................... 17 (7) Cash and temporary cash investments, January 1.............. 7 11 ------- ----- Cash and temporary cash investments, September 30........... $ 24 $ 4 ======= ===== Cash paid during the period for interest.................... $ 3 $ 2 Cash paid during the period for income taxes (net of refunds).................................................. $ 28 $ 13 NON-CASH INVESTING AND FINANCING ACTIVITIES Common equity interest received related to the sale of containerboard operations................................. $ 194 $ -- Principal amount of long-term debt assumed by buyers of containerboard operations................................. $(1,760) $ --
- ------------------------- Note: Cash and temporary cash investments include highly liquid investments with a maturity of three months or less at the date of purchase. The accompanying notes to combined financial statements are an integral part of these combined statements of cash flows. 4 6 THE BUSINESSES OF PACTIV CORPORATION COMBINED BALANCE SHEETS (UNAUDITED) (MILLIONS)
SEPTEMBER 30, DECEMBER 31, 1999 1998 ------------- ------------ ASSETS Current assets: Cash and temporary cash investments....................... $ 24 $ 7 Receivables -- Customer notes and accounts, net....................... 324 336 Affiliated companies................................... -- 44 Income taxes........................................... 26 15 Other.................................................. 40 52 Inventories -- Finished goods......................................... 288 246 Work in process........................................ 60 51 Raw materials.......................................... 54 63 Materials and supplies................................. 51 52 Deferred income taxes..................................... 30 6 Prepayments and other..................................... 21 45 ------ ------ 918 917 ------ ------ Other assets: Long-term notes receivable, net........................... 16 22 Goodwill and intangibles, net............................. 1,024 1,052 Pension assets............................................ 822 742 Other..................................................... 155 143 ------ ------ 2,017 1,959 ------ ------ Plant, property, and equipment, at cost..................... 2,106 2,057 Less -- Reserves for depreciation......................... 578 501 ------ ------ 1,528 1,556 ------ ------ Net assets of discontinued operations....................... 118 366 ------ ------ $4,581 $4,798 ====== ====== LIABILITIES AND COMBINED EQUITY Current liabilities: Short-term debt (including current maturities of long-term debt).................................................. $ 457 $ 595 Payables -- Trade.................................................. 249 255 Affiliated companies................................... 98 6 Taxes accrued............................................. 30 13 Accrued liabilities....................................... 207 188 Other..................................................... 92 85 ------ ------ 1,133 1,142 Long-term debt.............................................. 1,528 1,312 Deferred income taxes....................................... 305 291 Postretirement benefits..................................... 152 163 Deferred credits and other liabilities...................... 59 100 Commitments and contingencies Minority interest........................................... 21 14 Combined equity............................................. 1,383 1,776 ------ ------ $4,581 $4,798 ====== ======
The accompanying notes to combined financial statements are an integral part of these combined balance sheets. 5 7 THE BUSINESSES OF PACTIV CORPORATION STATEMENTS OF CHANGES IN COMBINED EQUITY (UNAUDITED) (MILLIONS)
NINE MONTHS ENDED SEPTEMBER 30, ---------------- 1999 1998 ------ ------ Balance, January 1.......................................... $1,776 $1,839 Net income (loss)......................................... (138) 146 Accumulated other comprehensive income (loss)............. (20) 21 Allocated interest, net of tax............................ 68 64 Change in allocated corporate debt........................ 459 (73) Cash contributions from (distributions to) Tenneco, net... (810) (90) Noncash contributions from (distributions to) Tenneco, net.................................................... 48 (82) ------ ------ Balance, September 30....................................... $1,383 $1,825 ====== ======
The accompanying notes to combined financial statements are an integral part of these statements of changes in combined equity. 6 8 THE BUSINESSES OF PACTIV CORPORATION COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (MILLIONS)
THREE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------- 1999 1998 ----------------------------- ----------------------------- ACCUMULATED ACCUMULATED OTHER OTHER COMPREHENSIVE COMPREHENSIVE COMPREHENSIVE COMPREHENSIVE INCOME INCOME INCOME INCOME ------------- ------------- ------------- ------------- NET INCOME.............................................. $ 12 $ 40 ---- ---- ACCUMULATED OTHER COMPREHENSIVE INCOME: CUMULATIVE TRANSLATION ADJUSTMENT Balance, July 1....................................... $(26) $(26) Translation of foreign currency statements.......... 9 9 26 26 ---- ---- Balance, September 30................................. (17) -- ---- ---- ADDITIONAL MINIMUM PENSION LIABILITY ADJUSTMENT Balance, July 1....................................... (2) -- ---- ---- Balance, September 30................................. (2) -- ---- ---- Balance, September 30................................... $(19) $ -- ==== ---- ==== ---- Other comprehensive income.............................. 9 26 ---- ---- COMPREHENSIVE INCOME.................................... $ 21 $ 66 ==== ====
NINE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------- 1999 1998 ----------------------------- ----------------------------- ACCUMULATED ACCUMULATED OTHER OTHER COMPREHENSIVE COMPREHENSIVE COMPREHENSIVE COMPREHENSIVE INCOME INCOME INCOME INCOME ------------- ------------- ------------- ------------- NET INCOME (LOSS)....................................... $(138) $146 ----- ---- ACCUMULATED OTHER COMPREHENSIVE INCOME: CUMULATIVE TRANSLATION ADJUSTMENT Balance, January 1.................................... $ 3 $(21) Translation of foreign currency statements.......... (20) (20) 21 21 ---- ---- Balance, September 30................................. (17) -- ---- ---- ADDITIONAL MINIMUM PENSION LIABILITY ADJUSTMENT Balance, January 1.................................... (2) -- ---- ---- Balance, September 30................................. (2) -- ---- ---- Balance, September 30................................... $(19) $ -- ==== ----- ==== ---- Other comprehensive income (loss)....................... (20) 21 ----- ---- COMPREHENSIVE INCOME (LOSS)............................. $(158) $167 ===== ====
The accompanying notes to combined financial statements are an integral part of these combined statements of comprehensive income (loss). 7 9 THE BUSINESSES OF PACTIV CORPORATION NOTES TO COMBINED FINANCIAL STATEMENTS (UNAUDITED) (1) The accompanying combined financial statements represent the financial position, results of operations, and cash flows for all of the businesses of Pactiv Corporation ("Pactiv"), formerly named Tenneco Packaging Inc. ("Packaging") prior to the Spin-off as defined in Note 2 below, owned directly or indirectly by Tenneco Inc. ("Tenneco") and its subsidiaries. Pactiv includes the assets, liabilities, and operations of Tenneco's specialty packaging and paperboard packaging businesses as well as certain of Tenneco's corporate and administrative service operations. Unless the context otherwise requires, the term "Tenneco" refers to: (i) for periods prior to the Spin-off, Tenneco's automotive and packaging businesses and corporate and administrative service operations and (ii) for periods after the Spin-off, Tenneco's automotive business. In the opinion of Pactiv, the accompanying unaudited combined financial statements of Pactiv contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations, cash flows, changes in equity, and comprehensive income for the periods indicated. The unaudited interim combined financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles. (2) In July 1998, Tenneco's Board of Directors authorized management to develop a broad range of strategic alternatives to separate the automotive, paperboard packaging, and specialty packaging businesses. Subsequently, Tenneco completed the following actions: - In January 1999, Tenneco reached an agreement to contribute the containerboard assets of its paperboard packaging segment to a new joint venture, Packaging Corporation of America ("PCA"), with Madison Dearborn Partners, Inc. The contribution to the joint venture was completed in April 1999. Pactiv received consideration of cash and debt assumption totaling approximately $2 billion and a 45 percent common equity interest in the joint venture (now 43 percent due to subsequent management equity issuances) recorded at a value of approximately $200 million. - In April 1999, Tenneco reached an agreement to sell the paperboard packaging segment's other assets, its folding carton operation, to Caraustar Industries. This transaction closed in June 1999. - Also in April 1999, Tenneco announced that its Board of Directors had approved the separation of its automotive and packaging businesses into two separate, independent companies. - In June 1999, Tenneco's Board of Directors approved a plan to sell Pactiv's remaining interest in its containerboard joint venture. Subsequent to that decision, equity market conditions in the paper and forest products sector have deteriorated and Pactiv's plans to divest the remaining interest in PCA have been temporarily suspended. - In August 1999, Tenneco received a letter ruling from the Internal Revenue Service that the separation of the automotive and packaging businesses would be tax-free for U.S. federal income tax purposes to Tenneco and its shareowners. - On November 4, 1999, Tenneco completed the separation of Pactiv through a dividend of the common stock of Pactiv to Tenneco shareowners ("Spin-off"). As a result of the decision to sell Pactiv's remaining interest in PCA, Pactiv's paperboard packaging segment is presented as a discontinued operation in the accompanying combined financial statements. Reference is made to Note 3 for information related to discontinued operations. Before the Spin-off, Tenneco realigned substantially all of its existing debt through a combination of tender offers, exchange offers, and other refinancings. Tenneco's debt realignment was financed by borrowings 8 10 THE BUSINESSES OF PACTIV CORPORATION NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) by Tenneco Automotive under new credit facilities, the issuance by Tenneco Automotive of subordinated debt, and Pactiv's issuance of debt and borrowings by Pactiv under new credit facilities. At the Spin-off date, Pactiv had total funded debt of approximately $2.1 billion, comprised of new public debt securities and drawings under its new credit facilities. The $164 million increase in debt from the amounts reflected in Pactiv's September 30, 1999, financial statements resulted primarily from the payment of transaction costs associated with the Spin-off. The debt of Pactiv was rated investment grade by both Standard & Poors and Moody's debt rating agencies. The debt is described in more detail in the Liquidity section of Management's Discussion and Analysis of Financial Condition and Results of Operations contained herein. Pactiv has modified or entered into certain contractual agreements with Tenneco related to its becoming a separate publicly held company. These agreements include a distribution agreement, a tax sharing agreement, a human resources agreement, an insurance agreement, and a transition services agreement. These agreements provide, among other things, that (i) Pactiv has become the sponsor of the Tenneco Retirement Plan, the Tenneco Supplemental Executive Retirement Plan, and the Tenneco Thrift Plan; and (ii) Pactiv will provide certain administrative services, including information processing, payroll, accounts payable, benefits administration, accounting, cash management, and travel-related services to Tenneco for a specified period of time based on contracted fee arrangements. (3) In January 1999, Tenneco reached an agreement to contribute the containerboard assets of its paperboard packaging segment to a new joint venture, PCA, with Madison Dearborn Partners, Inc. The contribution to the joint venture was completed in April 1999. Pactiv received consideration of cash and debt assumption totaling approximately $2 billion plus a 45 percent common equity interest in the joint venture (now 43 percent due to subsequent management equity issuances) recorded at a value of approximately $200 million. The containerboard assets contributed to the joint venture represented substantially all of the assets of Pactiv's paperboard packaging segment and included four mills, 67 corrugated products plants, and an ownership or leasehold interest in approximately 950,000 acres of timberland. Prior to the transaction, Pactiv borrowed approximately $1.8 billion and used approximately $1.2 billion of those borrowings to acquire assets used by the containerboard business under operating leases and timber cutting rights and to purchase containerboard business accounts receivable that had previously been sold to a third party. The remainder of the borrowings was remitted to Tenneco and used to repay a portion of Tenneco's short-term debt. Pactiv then contributed the containerboard business assets and transferred responsibility for the new indebtedness and the containerboard business liabilities to the joint venture in exchange for $247 million in cash and the 45 percent interest in the joint venture. As a result of the transaction, Pactiv recognized a pre-tax loss of $293 million, $178 million after-tax, or $1.07 per diluted common share, in the first quarter of 1999, based on the amount by which the carrying amount of the containerboard assets exceeded the fair value of those assets, less selling costs. The fair value of the containerboard assets was based on the fair value of the consideration received by Pactiv from the joint venture. Under a transition services agreement, Pactiv provides office space rental and certain administrative services, including information processing, payroll, benefits administration, office building administration and accounting to PCA for a specified period of time based on contracted fee arrangements. In April 1999, Tenneco reached an agreement to sell the paperboard packaging segment's other assets, its folding carton operations, to Caraustar Industries. Pactiv received cash proceeds of $73 million from this transaction which closed in June 1999. As a result of the sale, Pactiv recognized a pre-tax gain of $14 million, $9 million after-tax, or $.05 per diluted common share, which is included in discontinued operations in the second quarter of 1999. 9 11 THE BUSINESSES OF PACTIV CORPORATION NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) Revenues and income for the paperboard packaging discontinued operations are shown in the following table:
THREE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- -------------- 1999 1998 1999 1998 ----- ----- ----- ------ (MILLIONS) Net sales and operating revenues....................... $-- $415 $ 445 $1,185 === ==== ===== ====== Income before income taxes and interest allocation..... $ 8 $ 35 $ 30 $ 101 Income tax expense..................................... -- 12 11 38 --- ---- ----- ------ Income before interest allocation...................... 8 23 19 63 Allocated interest expense, net of income tax.......... -- 8 5 20 --- ---- ----- ------ Income from discontinued operations before disposition.......................................... 8 15 14 43 Gain (loss) on disposition, net of income tax.......... -- 10 (169) 19 --- ---- ----- ------ Income (loss) from discontinued operations............. $ 8 $ 25 $(155) $ 62 === ==== ===== ======
(4) In the fourth quarter of 1998, Tenneco's Board of Directors approved an extensive restructuring plan designed to reduce administrative and operational overhead costs in Tenneco's business. As a result, Pactiv recorded a pre-tax charge to income from continuing operations of $32 million, $20 million after-tax ($.12 per diluted common share). Of the pre-tax charge, $10 million related to operational restructuring actions and $22 million related to a staff and cost reduction plan, which covered employees in both the operating unit and corporate operations. The operational restructuring plans for Pactiv involved the elimination of production lines at two plants, resulting in the reduction of 104 positions, and the decision to exit four joint ventures. The staff and cost reduction plan involved the elimination of 184 administrative positions in Pactiv's business unit and corporate operations. The fixed assets for the production lines, as well as the joint venture investments, were written down to their fair value, less disposition costs, in the fourth quarter of 1998. Fair value for the production lines was estimated at scrap value, less removal costs. Fair value for the joint venture investments were determined to be zero as Pactiv relinquished its interests. No significant net cash proceeds are expected to be received upon the disposal of these assets, which should be completed by the fourth quarter of 1999. Annual depreciation expense was reduced by approximately $1 million as a result of the elimination of the production lines. As of September 30, 1999, approximately 240 employees have been terminated. This restructuring is being executed according to Pactiv's initial plan, and Pactiv expects to complete substantially all restructuring actions by the fourth quarter of 1999. In the first quarter of 1999, Tenneco adopted a plan to realign its headquarters functions. This plan involved the severance of approximately 40 employees, and the closing of the Greenwich, Connecticut, headquarters facility. Tenneco reached an agreement to sell its headquarters facility and recorded an impairment charge based on the selling price, less selling costs. The carrying value of the facility before the impairment was $43 million. Annual depreciation expense was reduced by approximately $3 million as a result of the sale. The charge for this plan was $29 million pre-tax, $17 million after-tax, or $.10 per diluted common share. Tenneco received approximately $30 million in the second quarter of 1999 related to the sale of these assets. 10 12 THE BUSINESSES OF PACTIV CORPORATION NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) Amounts related to the restructuring plans described above are shown in the following table:
NINE MONTHS ENDED SEPTEMBER 30, 1999 ------------------------------------- BALANCE AT CHARGED BALANCE AT DECEMBER 31, RESTRUCTURING CASH TO ASSET SEPTEMBER 30, 1998 CHARGE PAYMENTS ACCOUNTS 1999 ------------ ------------- -------- -------- ------------- (MILLIONS) Severance............... $15 $16 $17 $-- $14 Asset impairments....... -- 13 -- 13 -- --- --- --- --- --- $15 $29 $17 $13 $14 === === === === ===
Pactiv's management is evaluating Pactiv's strategy in light of its competitive position as a new stand-alone public company and, as part of this evaluation, is analyzing its business operations and assets. Specifically, the evaluation includes a review of Pactiv's strategic and competitive position in market segments and operations where results are not meeting management's expectations. Although plans are still being developed and have not been finalized or approved, potential options could include the disposition, restructuring or rationalization of assets and operations. Pactiv expects to complete its evaluation in the fourth quarter of 1999. Pactiv currently estimates that its evaluation could result in an aggregate pre-tax charge of up to approximately $175 million, of which approximately 10% could be cash. (5) Pactiv and its combined subsidiaries are parties to various legal proceedings arising from their operations. Pactiv believes that the outcome of these proceedings, individually and in the aggregate, will not have a material effect on the combined financial position or results of operations of Pactiv. (6) Pactiv and its combined subsidiaries are subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which they operate. Pactiv has provided reserves for compliance with these laws and regulations where it is probable that a liability exists and where Pactiv can make a reasonable estimate of the liability. The estimated liabilities recorded are subject to change as more information becomes available regarding the magnitude of possible clean-up expenditures and the timing, varying costs, and effectiveness of alternative clean-up technologies. However, Pactiv believes that any additional costs which arise as more information becomes available will not have a material effect on the combined financial condition or results of operations of Pactiv. (7) In the first quarter of 1999, Pactiv recorded an extraordinary loss for extinguishment of debt of $7 million (net of a $3 million income tax benefit), or $.04 per diluted common share. The loss related to early retirement of debt associated with the sale of the containerboard assets. (8) In March 1998, the American Institute of Certified Public Accountants ("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use," which establishes new accounting and reporting standards for the costs of computer software developed or obtained for internal use. This statement requires prospective application for fiscal years beginning after December 15, 1998. Pactiv adopted SOP 98-1 on January 1, 1999. The impact of this new standard did not have a significant effect on Pactiv's combined financial position or results of operations. In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-Up Activities," which requires costs of start-up activities to be expensed as incurred. This statement became effective for fiscal years beginning after December 15, 1998. The statement requires previously capitalized costs related to start-up activities to be expensed as a cumulative effect of a change in accounting principle when the statement is adopted. Pactiv previously capitalized certain costs in connection with the start-up of new foreign operations and its shared administrative service operations. Pactiv adopted SOP 98-5 on January 1, 1999, and recorded a related after-tax charge of $32 million (net of a $9 million tax benefit), or $.19 per diluted common share. 11 13 THE BUSINESSES OF PACTIV CORPORATION NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) This change in accounting principle decreased the loss before cumulative effect of change in accounting principle by $6 million (net of $4 million in income tax expense), or $.04 per diluted common share for the nine months ended September 30, 1999. If the new accounting method had been applied retroactively, income before cumulative effect of change in accounting principle for the nine months ended September 30, 1998, would have been lower by $11 million (net of a $7 million tax benefit), or $.06 per diluted common share. For the three months ended September 30, 1999, the change in accounting principle increased income before cumulative effect of change in accounting principle by $2 million (net of $2 million in income tax expense), or $.01 per diluted common share. If the new accounting principle had been applied retroactively, income before cumulative effect of change in accounting principle for the three months ended September 30, 1998, would have been lower by $4 million (net of a $2 million income tax benefit), or $.02 per diluted common share. In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("FAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement establishes new accounting and reporting standards requiring that all derivative instruments (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement requires that changes in the derivative's fair value be recognized currently in earnings unless special hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative's gains and losses to offset results related to the hedged item in the income statements and requires that a company must formally document, designate, and assess the effectiveness of transactions that receive hedge accounting treatment. This statement cannot be applied retroactively and is effective for all fiscal years beginning after June 15, 2000. Pactiv is currently evaluating the new standard but has not yet determined the impact it will have on its financial position or results of operations. (9) In connection with the Spin-off, Tenneco shareowners received one share of Pactiv common stock for each share of Tenneco common stock held as of October 29, 1999. As of September 30, 1999, basic and diluted earnings per share for Pactiv have been calculated using Tenneco's historical weighted average shares outstanding and weighted average shares outstanding adjusted to include estimates of additional shares that would be issued if potentially dilutive common shares had been issued, respectively. Potentially dilutive securities include stock options, restricted stock, and performance shares. Tenneco's basic and diluted average common shares outstanding were as follows:
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, -------------------------- -------------------------- 1999 1998 1999 1998 ----------- ----------- ----------- ----------- Basic..................... 167,459,483 167,985,657 167,115,070 168,929,776 Diluted................... 167,725,321 168,282,244 167,458,449 169,383,927
(10) Pactiv is a manufacturer with a single operating segment as described below: Specialty Packaging -- Manufacture and sale of specialty packaging and consumer products for foodservice, consumer, protective, flexible, and institutional/industrial markets. In conjunction with the Spin-off, Pactiv management is evaluating the realignment of its operating segments. Pactiv evaluates operating performance based primarily on income before interest expense, income taxes, and minority interest. Individual operating segments have not been aggregated within this reportable segment. Products are transferred between geographic areas on a basis intended to reflect as nearly as possible the "market value" of the products. 12 14 THE BUSINESSES OF PACTIV CORPORATION NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED) The following table summarizes certain segment information of Pactiv:
SEGMENT RECLASS ----------------- & SPECIALTY OTHER ELIMS COMBINED --------- ----- ------- -------- (MILLIONS) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 Revenues from external customers.................. $ 754 $ -- $ -- $ 754 Income (loss) before interest, income taxes, and minority interest............................... 71 (2) -- 69 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 Revenues from external customers.................. $ 701 $ -- $ (5) $ 696 Income (loss) before interest, income taxes, and minority interest............................... 86 (12) -- 74 AT SEPTEMBER 30, 1999, AND FOR THE NINE MONTHS THEN ENDED Revenues from external customers.................. $2,158 $ -- $ -- $2,158 Income (loss) before interest, income taxes, and minority interest............................... 261 (48)(a) -- 213 Extraordinary loss................................ -- (7) -- (7) Cumulative effect of change in accounting principle....................................... (17) (15) -- (32) Total assets...................................... 3,296 1,447(b) (162) 4,581 Net assets of discontinued operations............. -- 118 -- 118 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 Revenues from external customers.................. $2,062 $ 5 $ -- $2,067 Income (loss) before interest, income taxes, and minority interest............................... 261 (14) -- 247
- --------------- Notes: (a) Includes a $29 million restructuring charge (see Note 4). (b) The Other segment's total assets include: (1) pension plan assets retained by Pactiv related to benefits provided to certain employees of Tenneco's and Pactiv's discontinued operations, (2) Pactiv's administrative and corporate service operations assets, and (3) net assets of the discontinued paperboard packaging segment. The above notes are an integral part of the foregoing financial statements. 13 15 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS STRATEGIC ALTERNATIVES ANALYSIS In July 1998, Tenneco's Board of Directors authorized management to develop a broad range of strategic alternatives to separate the automotive, paperboard packaging, and specialty packaging businesses. Subsequently, Tenneco completed the following actions: - In January 1999, Tenneco reached an agreement to contribute the containerboard assets of its paperboard packaging segment to a new joint venture, Packaging Corporation of America (PCA), with Madison Dearborn Partners, Inc. The contribution to the joint venture was completed in April 1999. Pactiv received consideration of cash and debt assumption totaling approximately $2 billion and a 45 percent common equity interest in the joint venture (now 43 percent due to subsequent management equity issues) recorded at a value of approximately $200 million. - In April 1999, Tenneco reached an agreement to sell the paperboard packaging segment's other assets, its folding carton operation, to Caraustar Industries. This transaction closed in June 1999. - Also in April 1999, Tenneco announced that its Board of Directors had approved the separation of its automotive and packaging businesses into two separate, independent companies. - In June 1999, Tenneco's Board of Directors approved a plan to sell Pactiv's remaining interest in its containerboard joint venture. Subsequent to that decision, equity market conditions in the paper and forest products sector have deteriorated and Pactiv's plans to divest the remaining interest in PCA have been temporarily suspended. - In August 1999, Tenneco received a letter ruling from the Internal Revenue Service that the separation of the automotive and packaging businesses would be tax-free for U.S. federal income tax purposes to Tenneco and its shareholders. - On November 4, 1999, Tenneco completed the separation of Pactiv through a dividend of the common stock of Pactiv to Tenneco shareowners ("Spin-off"). As a result of the decision to sell Pactiv's remaining interest in PCA, Pactiv's paperboard packaging segment is presented as a discontinued operation in the Combined Financial Statements of The Businesses of Pactiv Corporation contained elsewhere in this document. Refer to Note 3 for further information. Before the Spin-off, Tenneco realigned substantially all of its existing debt through a combination of tender offers, exchange offers, and other refinancings. Tenneco's debt realignment was financed by borrowings by Tenneco Automotive under a new credit facility, the issuance by Tenneco Automotive of subordinated debt, Pactiv's issuance of debt and borrowings by Pactiv under new credit facilities. At the Spin-off date, Pactiv had total funded debt of approximately $2.1 billion, comprised of new public debt securities and drawings under its new credit facilities. The $164 million increase in debt from the amounts reflected in Pactiv's September 30, 1999 financial statements resulted primarily from the payment of transaction costs associated with the Spin-off. The debt of Pactiv was rated investment grade by both Standard & Poor's and Moody's debt rating agencies. The debt is described in more detail in the Liquidity section below. Pactiv has modified or entered into certain contractual arrangements with Tenneco related to its becoming a separate publicly held company. These agreements include a distribution agreement, a tax sharing agreement, a human resources agreement, an insurance agreement, and a transition services agreement. These agreements provide, among other things, that (i) Pactiv has become the sponsor of the Tenneco Retirement Plan, the Tenneco Supplemental Executive Retirement Plan, and the Tenneco Thrift Plan; and (ii) Pactiv will provide certain administrative services, including information processing, payroll, accounts payable, benefits administration, accounting, cash-management, and travel related services to Tenneco for a specified period of time based on contracted fee arrangements. 14 16 RESTRUCTURING AND OTHER CHARGES In the fourth quarter of 1998, Tenneco's Board of Directors approved an extensive restructuring plan designed to reduce administrative and operational overhead costs in Tenneco's business. As a result, Pactiv recorded a pre-tax charge to income from continuing operations of $32 million, $20 million after-tax ($.12 per diluted common share.) Of the pre-tax charge, $10 million related to operational restructuring actions and $22 million related to a staff and cost reduction plan, which covered employees in both the operating unit and corporate operations. Pactiv's operational restructuring plans involved the elimination of production lines at two plants, resulting in the reduction of 104 positions, and the decision to exit four joint ventures. The staff and cost reduction plan involved the elimination of 184 administrative positions in Pactiv's business unit and corporate operations. The fixed assets for the production lines, as well as the joint venture investments, were written down to their fair value, less disposition costs, in the fourth quarter of 1998. Fair value for the production lines was estimated at scrap value, less removal costs. Fair value for the joint venture investments was determined to be zero as Pactiv relinquished its interests. No significant net cash proceeds are expected to be received upon the disposal of these assets, which should be complete by the fourth quarter of 1999. Annual depreciation expense was reduced by approximately $1 million as a result of the elimination of the production lines. As of September 30, 1999, approximately 240 employees had been terminated. This restructuring is being executed according to Pactiv's initial plan, and Pactiv expects to complete substantially all restructuring actions by the fourth quarter of 1999. In the first quarter of 1999, Tenneco adopted a plan to realign its headquarters functions. This plan involved the severance of approximately 40 employees and the closing of the Greenwich, Connecticut headquarters facility. Tenneco reached an agreement to sell its headquarters facility and recorded an impairment charge based on the selling price, less selling costs. The carrying value of the facility before the impairment was $43 million. Annual depreciation was reduced by $3 million as a result of the sale. The charge for this plan was $29 million pre-tax, $17 million after-tax, or $.10 per diluted common share. Tenneco received approximately $30 million in the second quarter of 1999 related to the sale of these assets. Amounts related to the restructuring plans described above are shown in the following table:
NINE MONTHS ENDED SEPTEMBER 30, 1999 ----------------------------------- BALANCE AT CHARGED BALANCE AT DECEMBER 31, RESTRUCTURING CASH TO ASSET SEPTEMBER 30, 1998 CHARGE PAYMENTS ACCOUNTS 1999 ------------ ------------- -------- -------- ------------- (MILLIONS) Severance................................... $15 $16 $17 $-- $14 Asset impairments........................... -- 13 -- 13 -- --- --- -- --- --- $15 $29 $17 $13 $14 === === == === ===
Pactiv expects to realize annual savings of $53 million and $11 million after completing the fourth quarter 1998 and first quarter 1999 restructuring actions, respectively, which is expected to occur in the fourth quarter of 1999. Pactiv's management is evaluating Pactiv's strategy in light of its competitive position as a new stand-alone public company and, as part of this evaluation, is analyzing its business operations and assets. Specifically, the evaluation includes a review of Pactiv's strategic and competitive position in market segments and operations where results are not meeting management's expectations. Although plans are still being developed and have not been finalized or approved, potential options could include the disposition, restructuring or rationalization of assets and operations. Pactiv expects to complete its evaluation in the fourth 15 17 quarter of 1999. Pactiv currently estimates that its evaluation could result in an aggregate pre-tax charge of up to approximately $175 million, of which approximately 10% could be cash. QUARTERS ENDED SEPTEMBER 30, 1999 AND 1998 RESULTS OF CONTINUING OPERATIONS Net Sales and Operating Revenues
THIRD QUARTER ---------------------------- 1999 1998 % CHANGE ---- ---- -------- (MILLIONS) Specialty........................................... $ 754 $ 701 8% Intergroup sales and other.......................... -- (5) NM ------ ------ $ 754 $ 696 8% ====== ======
Specialty revenue grew 8% due to a combination of broad based unit volume growth and higher selling prices. Revenues of the consumer products and foodservice/food packaging business grew 8% while revenues of the protective and flexible packaging business grew 7%. The second half 1998 acquisitions of Sentinel Products, a producer of polyolefin foams, and Champion International's Belvidere, Illinois dual-ovenable paperboard tray manufacturing facility generated approximately $10 million of the revenue increase. Income (Loss) Before Interest Expense, Income Taxes, and Minority Interest ("Operating Income")
THIRD QUARTER ---------------------------- 1999 1998 % CHANGE ---- ---- -------- (MILLIONS) Specialty............................................ $ 71 $ 86 (17%) Other................................................ (2) (12) NM ----- ----- $ 69 $ 74 (7%) ===== =====
Specialty operating income declined $15 million or 17% as selling price increases lagged behind a rapid escalation in raw material prices, principally polyethylene. In addition, consumer advertising and promotional expenditures increased to support the growth of the Hefty One Zip(R) product. Specialty also incurred $3 million of overhead expense related to the restructuring of the company. Other operating loss of $2 million was a $10 million improvement, reflecting lower overhead costs at its business services operations and the winding down of the Tenneco corporate headquarters in Greenwich, Connecticut. Operating Income as a Percentage of Revenue Operating income as a percentage of revenue for the third quarters of 1999 and 1998 were as follows:
THIRD QUARTER ---------------------- 1999 1998 % CHANGE ---- ---- -------- Specialty.............................................. 9.4% 12.3% (24%) Total.................................................. 9.2% 10.6% (13%)
Specialty operating income as a percentage of revenue declined to 9.4% in the third quarter 1999 from 12.3% in the third quarter 1998 as selling price increases lagged behind a rapid escalation in raw materials, principally polyethylene. Total operating income as a percentage of revenue declined to 9.2% from 10.6% for the same reason. 16 18 Interest Expense, net of interest capitalized Interest expense from continuing operations increased from $33 million in the third quarter of 1998 to $38 million in the 1999 third quarter. See further discussion under "Nine Months Ended September 30, 1999 and 1998 -- Interest Expense, net of interest capitalized" and "Liquidity." For the quarter ended September 30, 1998, Pactiv allocated $9 million in interest expense to the discontinued paperboard packaging operations. For the comparable period in 1999, no interest expense was allocated to discontinued operations. Adjusting for this allocation, interest expense was $4 million lower in the third quarter of 1999 than the comparable period in 1998. The lower interest expense was primarily attributable to debt reduction related to the receipt of proceeds from the sale of Pactiv's containerboard interest early in the second quarter of 1999. Income Taxes Pactiv's effective tax rate for the three months ended September 30, 1999 was 87 percent compared to 61 percent for the comparable 1998 period. The third quarter 1999 effective tax rate includes the impact of a nonrecurring intercompany tax allocation adjustment related to the separation of Pactiv from its predecessor parent, Tenneco Inc. Excluding the impact of this one-time adjustment, Pactiv's earnings per diluted share from continuing operations would have been $.10 for the three months ended September 30, 1999. DISCONTINUED OPERATIONS Income from discontinued operations for the three months ended September 30, 1999, was $8 million, reflecting Pactiv's 43% interest in PCA. Discontinued operations generated income of $25 million during the three months ended September 30, 1998, including a $10 million gain on the sale of non-strategic timberlands, net of income tax. NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 RESULTS OF CONTINUING OPERATIONS Net Sales and Operating Revenues
NINE MONTHS ENDED SEPTEMBER 30, ------------------------------ 1999 1998 % CHANGE ---- ---- -------- (MILLIONS) Specialty........................................... $2,158 $2,062 5% Intergroup sales and other.......................... -- 5 NM ------ ------ $2,158 $2,067 4% ====== ======
Specialty revenue grew 5% due to unit volume growth of 7% partially offset by lower selling prices and unfavorable foreign exchange rates. Revenues of the consumer products and foodservice/food packaging business grew 4% while revenues of the protective and flexible packaging business grew 6%. The second half 1998 acquisitions of Sentinel Products, a producer of polyolefin foams, and Champion International's Belvidere, Illinois dual-ovenable paperboard tray manufacturing facility generated approximately $31 million of the revenue increase. 17 19 Income (Loss) Before Interest Expense, Income Taxes, and Minority Interest ("Operating Income")
NINE MONTHS ENDED SEPTEMBER 30, ---------------------------- 1999 1998 % CHANGE ---- ---- -------- (MILLIONS) Specialty............................................ $ 261 $ 261 -- Other................................................ (48) (14) NM ----- ----- $ 213 $ 247 (14%) ===== =====
Specialty operating income was unchanged as the favorable impact of unit volume growth was offset entirely by lower margins. Margins deteriorated as selling price increases lagged behind a rapid escalation in raw material prices, principally polyethylene. The first nine months' operating income included $8 million of non-recurring Year 2000 and systems implementation costs and $6 million of overhead costs related to the separation of the paperboard segment. Other operating loss for both periods reflected unallocated corporate overhead and costs at Pactiv's data center and administrative services operations. In addition, the first nine months of 1999 included a $29 million restructuring charge recorded in the first quarter to realign Tenneco's headquarters functions. Refer to Note 4 for further information. Operating Income as a Percentage of Revenue Operating income as a percentage of revenue for the first nine months of 1999 and 1998 was as follows:
NINE MONTHS ENDED SEPTEMBER 30, ------------------------ 1999 1998 % CHANGE ---- ---- -------- Specialty............................................ 12.1% 12.7% (5%) Total................................................ 9.9% 11.9% (17%)
Specialty operating income as a percentage of revenue declined to 12.1% in the first nine months 1999 from 12.7% in the first nine months 1998 as operating income was unchanged and revenue grew 5%. Total operating income as a percentage of revenue declined to 9.9% from 11.9% due to the specialty segment decline discussed above plus the first quarter restructuring charge of $29 million. Refer to Note 4 for further discussion. Excluding the first quarter 1999 restructuring charge, operating income as a percentage of revenue was as follows:
NINE MONTHS ENDED SEPTEMBER 30, ------------------------ 1999 1998 % CHANGE ---- ---- -------- Specialty............................................ 12.1% 12.7% (5%) Total................................................ 11.2% 11.9% (6%)
Interest Expense, net of interest capitalized Tenneco's historical practice has been to incur indebtedness for its consolidated group at the parent company level or at a limited number of subsidiaries, rather than at the operating company level, and to centrally manage various cash functions. Consequently, corporate debt of Tenneco and its related interest expense has been allocated to Pactiv based on the portion of Tenneco's investment in Pactiv which is deemed to be debt, generally based upon the ratio of Pactiv's net assets to Tenneco consolidated net assets plus debt. Interest expense was allocated at a rate equivalent to the weighted-average cost of all corporate debt. Although interest expense, and the related tax effects, have been allocated to Pactiv for financial reporting on a historical basis, Pactiv has not been billed for these amounts. The changes in allocated corporate debt and the after-tax allocated interest have been included as a component of Pactiv's combined equity. Although management believes that the historical allocation of corporate 18 20 debt and interest is reasonable, it is not necessarily indicative of Pactiv's debt upon completion of the realignment of Tenneco's debt nor debt and interest that may be incurred by Pactiv as a separate public company. See further discussion under "Liquidity". Interest expense from continuing operations increased from $100 million for the nine months ended September 30, 1998 to $106 million in the comparable 1999 period. For the nine months ended September 30, 1998, Pactiv allocated $29 million in interest expense to the discontinued paperboard packaging operations. For the comparable period in 1999, $9 million in interest expense was allocated to discontinued operations. Adjusting for this allocation, interest expense was $14 million lower in the first three quarters of 1999 than the comparable period in 1998. The lower interest expense was primarily attributable to debt reduction related to the receipt of proceeds from the sale of Pactiv's containerboard interest early in the second quarter of 1999. Income Taxes Pactiv's effective tax rate for the nine months ended September 30, 1999 was 48 percent, compared to 42 percent for the comparable 1998 period. The 1999 year-to-date effective tax rate reflected the effects of the reorganization and separation of Pactiv as a stand-alone company and the impact of nondeductible goodwill amortization on a lower income level. Pactiv expects the annual normalized effective tax rate to be 41 to 42 percent after 1999. DISCONTINUED OPERATIONS AND EXTRAORDINARY CHARGE Loss from discontinued operations for the nine months ended September 30, 1999, was $155 million. This included a loss on the contribution of the containerboard assets of $178 million, net of an income tax benefit of $115 million, or $1.07 per diluted common share. Discontinued operations generated income of $62 million for the nine months ended September 30, 1998. The current year's first nine months also included an extraordinary charge to cover the cost of early retirement of debt in connection with the contribution of the containerboard assets of $7 million, net of income tax benefit of $3 million, or $.04 per diluted common share. CHANGES IN ACCOUNTING PRINCIPLES In March 1998, the American Institute of Certified Public Accountants ("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use," which establishes new accounting and reporting standards for the costs of computer software developed or obtained for internal use. This statement requires prospective application for fiscal years beginning after December 15, 1998. Pactiv adopted SOP 98-1 on January 1, 1999. The impact of this new standard did not have a significant effect on Pactiv's financial position or results of operations. In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-Up Activities," which requires costs of start-up activities to be expensed as incurred. This statement became effective for fiscal years beginning after December 15, 1998. This statement requires previously capitalized costs related to start-up activities to be expensed as a cumulative effect of a change in accounting principle when the statement is adopted. Pactiv previously capitalized costs related to the start-up of new foreign operations and its administrative service operations. Pactiv adopted SOP 98-5 on January 1, 1999, and recorded a related after-tax charge of $32 million, net of a $9 million tax benefit, or $.19 per diluted common share. This change in accounting principle decreased the loss before cumulative effect of change in accounting principle by $6 million, net of $4 million in income tax expense, or $.04 per diluted common share, for the nine months ended September 30, 1999. If the new accounting method had been applied retroactively, income before cumulative effect of change in accounting principle for the nine months ended September 30, 1998, would have been lower by $11 million, net of a $7 million income tax benefit, or $.06 per diluted common share. For the three months ended September 30, 1999, the change in accounting principle increased income before cumulative effect of change in accounting principle by $2 million (net of $2 million in income tax expense), or 19 21 $.01 per diluted common share. If the new accounting principle had been applied retroactively, income before cumulative effect of change in accounting principle for the three months ended September 30, 1998, would have been lower by $4 million (net a of $2 million income tax benefit), or $.02 per diluted common share. In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement establishes new accounting and reporting standards requiring that all derivative instruments, including derivative instruments embedded in other contracts, be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement requires that changes in the derivative's fair value be recognized currently in earnings unless special hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative's gains and losses to offset results related to the hedged item in the income statement, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting treatment. This statement cannot be applied retroactively and is effective for all fiscal years beginning after June 15, 2000. Pactiv is currently evaluating the new standard but has not yet determined the impact it will have on its financial position or results of operations. LIQUIDITY AND CAPITAL RESOURCES Capitalization
SEPTEMBER 30, DECEMBER 31, % 1999 1998 CHANGE ------------- ------------ ------ (MILLIONS) Short-term debt and current maturities of long-term debt............................... $ 457 $ 595 (23%) Long-term debt............................... 1,528 1,312 16% Debt allocated to discontinued operations.... -- 548 NM ------ ------ Total debt.............................. 1,985 2,455 (19%) Minority interest............................ 21 14 50% Combined equity.............................. 1,383 1,776 (22%) ------ ------ Total capitalization.................... $3,389 $4,245 (20%) ====== ======
Pactiv's ratio of debt to total capitalization was 58.6 percent and 57.8 percent at September 30, 1999, and at December 31, 1998, respectively. Debt allocated from Tenneco to Pactiv declined due to the contribution by Pactiv of its containerboard assets to the joint venture. Equity declined as a result of distributions to Tenneco and the net loss for the first nine months, which included the loss on the containerboard assets as well as the charge associated with the plan to realign the Greenwich, Connecticut, headquarters facility. See the Statements of Changes in Combined Equity in the Combined Financial Statements of The Businesses of Pactiv Corporation contained elsewhere in this document for a description of factors affecting equity. Cash Flows
NINE MONTHS ENDED SEPTEMBER 30, ----------------- 1999 1998 ---- ---- (MILLIONS) Cash provided (used) by: Operating activities...................................... $ 7 $ 413 Investing activities...................................... (905) (329) Financing activities...................................... 913 (91)
Cash flow provided by continuing operating activities declined by $193 million for the first nine months of 1999 compared to the same period in 1998, primarily due to higher working capital levels. This was mainly attributable to higher receivables, lower payables and a build in inventories during 1999. 20 22 Cash flow from Pactiv's discontinued paperboard operations declined by $213 million in the first nine months of 1999 compared to the 1998 period. This was primarily attributable to the purchase of containerboard business accounts receivable in contemplation of the contribution of the containerboard business to the joint venture in April 1999. Additionally, lower linerboard and medium prices resulted in lower operating cash flow for the containerboard business. Excluding the effects of the discontinued paperboard operations, cash used by investing activities was lower during the first nine months of 1999 by $167 million compared to the first nine months of 1998. Reduced capital spending, lower systems related expenditures and lower acquisition activity contributed to the decline. As described above, Packaging borrowed approximately $1.8 billion in the second quarter of 1999 in connection with the formation of the containerboard joint venture and used approximately $1.2 billion of that amount to purchase leased assets and timber cutting rights of that business. The remaining proceeds from these borrowings, plus additional cash proceeds of approximately $306 million from the containerboard and folding carton transactions, were used to retire Tenneco's short-term debt in the second quarter. Accordingly, absent the borrowings described above, cash used by financing activities was $847 million for the first nine months of 1999. Packaging contributed the containerboard business and transferred responsibility for $1.8 billion in new debt to the new joint venture. The debt reduction which resulted from this contribution is shown on the statements of cash flows as a non-cash financing activity. CAPITAL COMMITMENTS Packaging estimates that expenditures aggregating approximately $110 million will be required after December 31, 1998, to complete facilities and projects authorized at that date, and substantial commitments have been made in connection with those projects. LIQUIDITY Historically, Pactiv's excess net cash flows from operating and investing activities have been used by its parent, Tenneco, to meet consolidated debt and other obligations. Conversely, when Pactiv's cash requirements have been in excess of cash flows from operations, Tenneco has utilized its consolidated credit facilities to fund Pactiv's obligations. Also, depending on market and other conditions, Pactiv has utilized external sources of capital to meet specific funding requirements. Pactiv's management believes that, after the Spin-off, Pactiv's cash flows from operations combined with available borrowing capacity under the new credit facilities described below, will generally be sufficient to meet its future capital requirements for the following year. Before the Spin-off, Tenneco realigned substantially all of its debt through a combination of tender offers, exchange offers, and other refinancings. Tenneco's debt realignment was financed in part by the exchange of public debt securities issued by Pactiv and borrowings by Pactiv under its new credit facilities, which are described below. At the Spin-off, Pactiv had total funded debt of approximately $2.1 billion, comprised of new public debt securities and drawings under its new credit facilities. The $164 million increase in debt at the Spin-off date from the amount that was reflected in Pactiv's September 30, 1999, financial statements resulted primarily from the payment of transaction costs associated with the Spin-off. The terms of the new public debt securities are substantially identical to the terms of the corresponding series of Tenneco's original securities for which they were exchanged, except that (1) Pactiv is the issuer and (2) interest rates are approximately 50 basis points higher. The terms of the new securities will not restrict Pactiv's ability to declare dividends, authorize capital expenditures, or incur additional unsecured debt. In addition, Pactiv has entered into a five-year, $750 million long-term revolving credit facility and a $250 million 364-day revolving credit facility in connection with the Spin-off. Initial borrowings under these facilities of $644 million at the time of the Spin-off were used to fund a portion of the debt realignment. After the Spin-off, additional borrowings may be used for general corporate purposes. These facilities do not impose any general restrictions on Pactiv's ability to declare dividends or restrict capital expenditures. They do, however, include limitations on incurring liens and subsidiary debt, disposing of all or substantially all of its 21 23 assets and discontinuing its primary businesses. These facilities require Pactiv to satisfy specified financial ratios, as well as to comply with other customary covenants and agreements. Borrowings under these facilities will bear interest at a floating rate based on LIBOR, adjusted for reserve requirements, plus a specified margin, or based on a specified prime or reference rate plus a specified margin, at Pactiv's option. Borrowings under these facilities may also bear interest based on competitive bids. In connection with the Spin-off, Pactiv exercised its right to a one time draw under a $1.5 billion term loan agreement in the amount of $300 million. Pursuant to the terms of this agreement, Pactiv is no longer entitled to make further borrowings. The borrowing under this facility will be due 18 months after funding or upon Pactiv's sale of its remaining interest in PCA, whichever occurs first and bear interest at a floating rate based on LIBOR, adjusted for reserve requirements, plus a specified margin or based on a specified prime or reference rate plus a specific margin, at Pactiv's option. This financing includes covenants similar to those described above for the revolving credit facilities. Under certain conditions, the lender has the option to syndicate all or a portion of the loan no later than 120 days after the Spin-off, and in connection therewith and after consultation with Pactiv, could change the loan pricing, covenants, maturity, structure or other terms if advisable to ensure a successful syndication. Pactiv has entered into a $175 million syndicated lease facility with a third party lessor and various lenders, the proceeds of which will be used to restructure or replace certain existing operating leases and public warehouse arrangements and to facilitate additional leasing arrangements for other operating facilities. The syndicated lease facility contains customary terms and conditions, including a residual value guarantee, default provisions and financial covenants. YEAR 2000 Many computer software systems, as well as some hardware and equipment utilizing date-sensitive data, were designed to use a two-digit date field. Consequently, these systems, hardware and equipment will not be able to properly recognize dates beyond the year 1999. This is referred to herein as the "Year 2000 issue". Pactiv's significant technology transformation projects have addressed the Year 2000 issue in those areas where replacement systems are being installed for other business reasons. Where existing systems and equipment are expected to remain in place beyond 1999, Pactiv has a detailed process in place to identify and assess Year 2000 issues and to remediate, replace or establish alternative procedures addressing non-Year 2000 compliant systems, hardware and equipment. Pactiv has substantially completed inventorying its systems and equipment, including computer systems and business applications, as well as date-sensitive technology embedded in its equipment and facilities. Pactiv continues to plan for and undertake remediation, replacement or establishment of alternative procedures for non-compliant Year 2000 systems and equipment; and test remediated, replaced or alternative procedures for systems and equipment. Pactiv believes that approximately 99 percent of its major business applications systems and approximately 90 percent of its manufacturing equipment are in Year 2000 compliance as of September 30, 1999. Pactiv has confirmed that none of its products are date-sensitive. Remediation, replacement or establishment of alternative procedures for systems and equipment and testing have been and are being undertaken on a business priority basis. Pactiv's administrative services operation is 99% complete with its Year 2000 remediation, replacement and testing activities for information technology infrastructure. Subsequent to the Spin-off, Pactiv will provide information technology infrastructure to Tenneco as part of a transition services agreement. Based upon current estimates, Pactiv believes that costs to address Year 2000 issues and implement the necessary changes to its existing systems and equipment, including costs incurred to date, will approximate $30 million. As of September 30, 1999, approximately $23 million of the costs had been incurred. Such expenditures are being expensed as they are incurred. Where Pactiv has determined that replacing, rather than changing, existing computer systems or equipment is more effective and efficient, particularly where additional functionality is available, related assets have been capitalized. 22 24 Pactiv has also contacted its major suppliers, financial institutions, and others with whom it conducts business to determine whether they will be able to resolve in a timely manner Year 2000 compliance problems possibly affecting Pactiv. A majority of these entities, including critical suppliers, have responded by advising as to the status of their efforts and indicated that they expect to become Year 2000 compliant in a timely manner. Based on these responses, critical vendors have been assigned a risk rating. This process is ongoing. Pactiv intends to continue corresponding with critical high risk third parties to obtain information and updates on their Year 2000 compliance efforts, and to assess the Year 2000 readiness of new suppliers, financial institutions and others with whom it begins to conduct business. If Pactiv is unable to complete in a timely and cost-effective fashion the remaining remediation or replacement of critical systems or equipment not yet in compliance, or develop alternative procedures, or if those with whom Pactiv conducts business are unsuccessful in implementing timely solutions, Year 2000 issues could have a material adverse effect on Pactiv's condition or results of operations. Possible worst case scenarios include interruptions in Pactiv's ability to manufacture its products, process and ship orders, and bill and collect from customers due to internal system failures or the system failures of its suppliers or customers. Pactiv believes it will be able to resolve its own Year 2000 issues in a timely manner. As part of its planning and readiness activities, Pactiv is completing Year 2000 contingency plans for critical business processes such as banking, data center operations and just-in-time manufacturing operations. Contingency plans are being completed on a business unit basis, where needed, to respond to previously undetected Year 2000 problems and business interruption from suppliers. Contingency plans will include alternative suppliers, as necessary, as well as assuring the availability of key personnel at year end to address unforeseen Year 2000 problems. EURO CONVERSION The European Monetary Union resulted in the adoption of a common currency, the Euro, among eleven European nations. The Euro is being adopted over a three-year transition period which commenced on January 1, 1999. In October 1997, Tenneco established a cross-functional euro committee, comprised of representatives of Tenneco's operationing divisions, including Pactiv, as well as its corporate offices. That Committee had two principal objectives: (1) to determine the impact of the Euro on Tenneco's business operations; and (2) to recommend and facilitate implementation of those steps necessary to ensure that Tenneco would be fully prepared for the Euro's introduction. As of January 1, 1999, Pactiv had implemented those Euro conversion procedures that it had determined to be necessary and prudent to adopt by that date, and is on track to becoming fully "Euro ready" on or before the conclusion of the three-year Euro transition period. Pactiv believes that the costs associated with transitioning to the Euro will not be material to its combined financial position or the results of its operations. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Before the Spin-off, Tenneco realigned substantially all of its debt through a combination of tender offers, exchange offers, and other refinancings. Tenneco's debt realignment was financed in part by the exchange of public debt securities issued by Pactiv and borrowings by Pactiv under its new credit facilities. The new credit facilities carry interest rates that change with market rates of interests. See Item 2, "Management's Discussion and Analysis of Financial Conditions and Results of Operations -- Liquidity" for further information. 23 25 PART II OTHER INFORMATION ITEMS 1-5. NONE ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. The exhibits filed herewith are listed in the exhibit index which follows the signature page and immediately precedes the exhibits filed. (b) Reports on Form 8-K. None. 24 26 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PACTIV CORPORATION By: /s/ ANDREW A. CAMPBELL ---------------------------------- Andrew A. Campbell Vice President Finance and Chief Financial Officer Date: November 17, 1999 25 27 EXHIBIT INDEX TO QUARTERLY ON FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1999
EXHIBIT NUMBER DESCRIPTION ------- ----------- 2 -- Distribution Agreement by and between Tenneco Inc. and Pactiv Corporation (formerly known as Tenneco Packaging Inc.), (incorporated herein by reference to Exhibit 2 to Pactiv Corporation's Current Report on Form 8-K dated November 11, 1999, File No. 1-15157). 3.1(a) -- Restated Certificate of Incorporation of the registrant dated November 4, 1999. 3.1(b) -- Certificate of Amendment, dated November 4, 1999. 3.1(c) -- Certificate of Designation of Series A Junior Participating Preferred Stock of Pactiv Corporation, dated November 4, 1999. 3.2 -- Amended and Restated By-laws of Pactiv Corporation (formerly known as Tenneco Packaging Inc.). 4.1 -- Specimen Stock Certificate of Pactiv Corporation Common Stock. 4.2 -- Qualified Offer Plan Rights Agreement, dated as of November 4, 1999, by and between Pactiv Corporation and First Chicago Trust Company of New York, as Rights Agent. 4.3(a) -- Indenture, dated September 29, 1999, by and between Pactiv Corporation (formerly known as Tenneco Packaging Inc.) and The Chase Manhattan Bank, as Trustee (incorporated herein by reference to Exhibit 4.1 to Tenneco Packaging Inc.'s Registration Statement on Form S-4, File No. 333-82923). 4.3(b) -- First Supplemental Indenture, dated as of November 4, 1999, to Indenture dated as of September 29, 1999, between the registrant and The Chase Manhattan Bank, as Trustee. 4.3(c) -- Second Supplemental Indenture, dated as of November 4, 1999, to Indenture dated as of September 29, 1999, between the registrant and The Chase Manhattan Bank, as Trustee. 4.3(d) -- Third Supplemental Indenture, dated as of November 4, 1999, to Indenture dated as of September 29, 1999, between the registrant and The Chase Manhattan Bank, as Trustee. 4.3(e) -- Fourth Supplemental Indenture, dated as of November 4, 1999, to Indenture dated as of September 29, 1999, between the registrant and The Chase Manhattan Bank, as Trustee. 4.3(f) -- Fifth Supplemental Indenture, dated as of November 4, 1999, to Indenture dated as of September 29, 1999, between the registrant and The Chase Manhattan Bank, as Trustee. 4.4 -- Registration Rights Agreement, dated as of November 4, 1999, by and between Pactiv Corporation (formerly known as Tenneco Packaging Inc.) and the trustees under the Pactiv Corporation Rabbi Trust. \ 10.1 -- Human Resources Agreement, dated as of November 4, 1999, by and between Tenneco Inc. and Pactiv Corporation (formerly known as Tenneco Packaging Inc.) (incorporated herein by reference to Exhibit 99.1 to Tenneco Inc.'s Current Report on Form 8-K dated November 4, 1999, File No. 1-12387). 10.2 -- Tax Sharing Agreement, dated as of November 3, 1999, by and between Tenneco Inc. and Pactiv Corporation (formerly known as Tenneco Packaging Inc.) (incorporated herein by reference to Exhibit 99.2 to Tenneco Inc.'s Current Report on Form 8-K dated November 4, 1999, File No. 1-12387).
26 28
EXHIBIT NUMBER DESCRIPTION ------- ----------- 10.3 -- Amended and Restated Transition Services Agreement, dated as of November 4, 1999, by and between Tenneco Inc. and Pactiv Corporation (formerly known as Tenneco Packaging Inc.) (incorporated herein by reference to Exhibit 10.21 to Tenneco Automotive Inc.'s Quarterly Report on Form 10-Q for quarterly period ended September 30, 1999, File No. 1-12387). 10.4 -- Trademark Transition License Agreement, dated as of November 4, 1999, by and between Tenneco Inc. and Pactiv Corporation (formerly known as Tenneco Packaging Inc.) 10.5 -- Pactiv Corporation (formerly known as Tenneco Packaging Inc.) Executive Incentive Compensation Plan. 10.6 -- Pactiv Corporation (formerly known as Tenneco Packaging Inc.) Supplemental Executive Retirement Plan. 10.7 -- Pactiv Corporation (formerly known as Tenneco Packaging Inc.) Change in Control Severance Benefit Plan for Key Executives. 10.8 -- Pactiv Corporation (formerly known as Tenneco Packaging Inc.) Deferred Compensation Plan. 10.9 -- Pactiv Corporation (formerly known as Tenneco Packaging Inc.) Stock Ownership Plan. 10.10 -- Professional Services Agreement, dated August 22, 1996, by and between Tenneco Business Services Inc. and Newport News Shipbuilding Inc. (incorporated herein by reference to Exhibit 10.28 of Tenneco Inc.'s Form 10, File No. 1-12387). 10.11 -- Pactiv Corporation Rabbi Trust. 10.12 -- Tenneco Rabbi Trust Agreement. 10.13(a) -- Contribution Agreement, dated as of January 25, 1999, by and among Tenneco Packaging Inc., PCA Holdings LLC and Packaging Corporation of America (the "Contribution Agreement") (incorporated herein by reference to Exhibit 10.30 to Tenneco Inc.'s Current Report on Form 8-K dated April 12, 1999, File No. 1-12387). 10.13(b) -- Letter Agreement, dated as of April 12, 1999, by and among Tenneco Packaging Inc., PCA Holdings LLC and Packaging Corporation of America, amending the Contribution Agreement (incorporated herein by reference to Exhibit 10.31 to Tenneco Inc.'s Current Report on Form 8-K dated April 12, 1999, File No. 1-12387). 10.14 -- Stockholders Agreement, as amended, dated as of April 12, 1999, by and among Tenneco Packaging Inc., PCA Holdings LLC and Packaging Corporation of America (incorporated herein by reference to Exhibit 10.32 to Tenneco Inc.'s Current Report on Form 8-K dated April 12, 1999, File No. 1-12387). 10.15 -- Registration Rights Agreement, as amended, dated as of April 12, 1999, by and among Tenneco Packaging Inc., PCA Holdings LLC and Packaging Corporation of America (incorporated herein by reference to Exhibit 10.33 to Tenneco Inc.'s Current Report on Form 8-K dated April 12, 1999, File No. 1-12387). 10.16 -- Release Agreement dated as of October 18, 1999, by and between Dana G. Mead and Tenneco Management Company, and Modification of Release Agreement dated as of October 18, 1999, by and among Dana G. Mead, Tenneco Inc. and Tenneco Management Company (incorporated herein by reference to Exhibit 10.18 to Tenneco Automotive Inc.'s Quarterly Report on Form 10-Q for quarterly period ended September 30, 1999, File No. 1-12387). 10.17 -- Employment Agreement, dated as of March 11, 1997, by and between Richard L. Wambold and Tenneco Inc.
27 29
EXHIBIT NUMBER DESCRIPTION ------- ----------- 10.18 -- Short Term Credit Agreement, dated as of September 29, 1999, among Tenneco Packaging Inc., Bank of America, N.A., as Administrative Agent, Credit Suisse First Boston, as Syndication Agent, Bank One, NA and Banque Nationale de Paris, as Co-Documentation Agents, and the other financial institutions party thereto (incorporated herein by reference to Exhibit 4.4 to Tenneco Packaging Inc.'s Registration Statement on Form S-4, File No. 333-82923). 10.19 -- Long Term Credit Agreement, dated as of September 29, 1999, among Tenneco Packaging Inc., Bank of America, N.A., as Administrative Agent, Credit Suisse First Boston, as Syndication Agent, Bank One, NA and Banque Nationale de Paris, as Co-Documentation Agents, and the other financial institutions party thereto (incorporated herein by reference to Exhibit 4.3 to Tenneco Packaging Inc.'s Registration Statement on Form S-4, File No. 333-82923). 10.20 -- Term Loan Agreement, dated as of November 3, 1999, between Pactiv Corporation (formerly known as Tenneco Packaging Inc.) and Bank of America. 10.21 -- Letter of Agreement dated September 10, 1999, by and among Tenneco Inc., Bank of America, N.A., and Bank of America Securities LLC, related to Term Loan Agreement, dated as of November 3, 1999, by and between Pactiv Corporation (formerly known as Tenneco Packaging Inc.) and Bank of America. 10.22 -- Participation Agreement, dated as of October 28, 1999, among Pactiv Corporation (formerly known as Tenneco Packaging Inc.), First Security Bank, N.A., Bank of America, as Administrative Agent, and the other financial institutions party thereto. 11 -- None. 12 -- Computation of Ratio of Earnings to Fixed Charges. 15 -- None. 18 -- None. 22 -- None. 23 -- None. 24 -- None. 27.1 -- Financial Data Schedule, September 30, 1999. 27.2 -- Financial Data Schedule, September 30, 1998. 28 -- None. 99 -- None.
28 EX-3.1(A) 2 RESTATED CERTIFICATE OF INCORPORATION 1 EXHIBIT 3.1(a) RESTATED CERTIFICATE OF INCORPORATION OF TENNECO PACKAGING INC. * * * * * The present name of the corporation is Tenneco Packaging Inc. The corporation was incorporated under the name of PKG Corporation by the filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware on April 19, 1965. This Restated Certificate of Incorporation of the corporation, which both restates and further amends the provisions of the corporation's Certificate of Incorporation, was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware and by the written consent of its sole stockholder in accordance with Section 228 of the General Corporation Law of the State of Delaware. The Certificate of Incorporation of the corporation is hereby amended and restated to read in its entirety as follows: FIRST: The name of the corporation is Tenneco Packaging Inc. SECOND: The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: A. The total number of shares of all classes of stock which the corporation shall be authorized to issue is 400,000,000 shares, divided into 350,000,000 shares of Common Stock, par value $.01 per share (herein called "Common Stock"), and 50,000,000 shares of Preferred Stock, par value $.01 per share (herein called "Preferred Stock"). B. The Board of Directors of the corporation (the "Board of Directors") is hereby expressly authorized, by resolution or resolutions thereof, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of 2 Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. C. Except as may otherwise be provided in this Restated Certificate of Incorporation (including any certificate filed with the Secretary of State of the State of Delaware establishing the terms of a series of Preferred Stock in accordance with Section B of this Article FOURTH) or by applicable law, each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote, and no holder of any series of Preferred Stock, as such, shall be entitled to any voting powers in respect thereof. D. Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors in its discretion shall determine. E. Upon the dissolution, liquidation or winding up of the corporation, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock, the holders of the Common Stock shall be entitled to receive the assets of the corporation available for distribution to its stockholders ratably in proportion to the number of shares held by them. F. The corporation shall be entitled to treat the person in whose name any share of its stock is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not the corporation shall have notice thereof, except as expressly provided by applicable law. G. Ownership of shares of any class of the capital stock of the corporation shall not entitle the holders thereof to any preemptive right to subscribe for or purchase or to have offered to them for subscription or purchase any additional shares of capital stock of any class of the corporation or any securities convertible into any class of capital stock of the corporation, whether now or hereafter authorized, however acquired, issued or sold by the corporation, it being the purpose and intent hereof that the Board of Directors shall have full right, power and authority to offer for subscription or sell or to make any disposal of any or all unissued shares of the capital stock of the corporation or any securities convertible into stock or any or all shares of stock or convertible securities issued and thereafter acquired by the corporation, for such consideration, in money or property, as the Board of Directors in its sole discretion shall determine. -2- 3 FIFTH: A. The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors consisting of not less than five nor more than sixteen directors, with the exact number of directors constituting the entire Board of Directors to be determined from time to time by resolution adopted by the affirmative vote of a majority of the entire Board of Directors. B. The Board of Directors shall be authorized to adopt, make, amend, alter, change, add to or repeal the By-Laws of the corporation, subject to the power of the stockholders to amend, alter, change, add to or repeal the By-Laws made by the Board of Directors. C. Unless and except to the extent that the By-Laws of the corporation shall so require, the election of directors of the corporation need not be by written ballot. SIXTH: A. In addition to any affirmative vote required by law or this Restated Certificate of Incorporation or the By-Laws of the corporation, and except as otherwise expressly provided in Section B of this Article SIXTH, a Business Combination (as hereinafter defined) with, or proposed by or on behalf of, any Interested Stockholder (as hereinafter defined) or any Affiliate or Associate (as hereinafter defined) of any Interested Stockholder or any person who thereafter would be an Affiliate or Associate of such Interested Stockholder shall, except as otherwise prohibited by applicable law, require the affirmative vote of not less than 662/3% of the votes entitled to be cast by the holders of all the then outstanding shares of Voting Stock (as hereinafter defined), voting together as a single class, excluding Voting Stock beneficially owned by any Interested Stockholder. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage or separate class vote may be specified, by law or in any agreement with any national securities exchange or otherwise. B. The provisions of Section A of this Article SIXTH shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote, if any, as is required by law or by any other provision of this Restated Certificate of Incorporation or the By-Laws of the corporation, or any agreement with any national securities exchange, if all of the conditions specified in either of the following Paragraphs 1 or 2 are met or, in the case of a Business Combination not involving the payment of consideration to the holders of the corporation's outstanding Capital Stock (as hereinafter defined), if the condition specified in the following Paragraph 1 is met: -3- 4 1. The Business Combination shall have been approved, either specifically or as a transaction which is within an approved category of transactions, by a majority (whether such approval is made prior to or subsequent to the acquisition of, or announcement or public disclosure of the intention to acquire, beneficial ownership of the Voting Stock that caused the Interested Stockholder to become an Interested Stockholder) of the Continuing Directors (as hereinafter defined). 2. All of the following conditions shall have been met: a. the aggregate amount of cash and the Fair Market Value (as hereinafter defined), as of the date of the consummation of the Business Combination, of consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the highest amount determined under clauses (i) and (ii) below: (i) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by or on behalf of the Interested Stockholder for any share of Common Stock in connection with the acquisition by the Interested Stockholder of beneficial ownership of shares of Common Stock (x) within the two-year period immediately prior to the first public announcement of the proposed Business Combination (the "Announcement Date") or (y) in the transaction in which it became an Interested Stockholder, whichever is higher, in either case as adjusted for any subsequent stock split, stock dividend, subdivision or reclassification with respect to Common Stock; and (ii) the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (the "Determination Date"), whichever is higher, as adjusted for any subsequent stock split, stock dividend, subdivision or reclassification with respect to Common Stock. b. The aggregate amount of cash and the Fair Market Value, as of the date of the consummation of the Business Combination, of consideration other than cash to be received per share by holders of shares of any class or series of outstanding Capital Stock, other than Common -4- 5 Stock, shall be at least equal to the highest amount determined under clauses (i), (ii), (iii) and (iv) below: (i) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by or on behalf of the Interested Stockholder for any share of such class or series of Capital Stock in connection with the acquisition by the Interested Stockholder of beneficial ownership of shares of such class or series of Capital Stock (x) within the two-year period immediately prior to the Announcement Date, or (y) in the transaction in which it became an Interested Stockholder, whichever is higher, in either case as adjusted for any subsequent stock split, stock dividend, subdivision or reclassification with respect to such class or series of Capital Stock; (ii) the Fair Market Value per share of such class or series of Capital Stock on the Announcement Date or on the Determination Date, whichever is higher, as adjusted for any subsequent stock split, stock dividend, subdivision or reclassification with respect to such class or series of Capital Stock; (iii) (if applicable) the price per share equal to the Fair Market Value per share of such class or series of Capital Stock determined pursuant to the immediately preceding clause (ii), multiplied by the ratio of (x) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by or on behalf of the Interested Stockholder for any share of such class or series of Capital Stock in connection with the acquisition by the Interested Stockholder of beneficial ownership of shares of such class or series of Capital Stock within the two-year period immediately prior to the Announcement Date, as adjusted for any subsequent stock split, stock dividend, subdivision or reclassification with respect to such class or series of Capital Stock to (y) the Fair Market Value per share of such class or series of Capital Stock on the first day in such two-year period on which the Interested Stockholder acquired beneficial ownership of any share of such class or series of Capital Stock, as adjusted for any subsequent stock split, stock dividend, subdivision -5- 6 or reclassification with respect to such class or series of Capital Stock; and (iv) (if applicable) the highest preferential amount per share to which the holders of shares of such class or series of Capital Stock would be entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the corporation regardless of whether the Business Combination to be consummated constitutes such an event. The provisions of this Paragraph 2 shall be required to be met with respect to every class or series of outstanding Capital Stock, whether or not the Interested Stockholder has previously acquired beneficial ownership of any shares of a particular class or series of Capital Stock. c. The consideration to be received by holders of a particular class or series of outstanding Capital Stock shall be in cash or in the same form as previously has been paid by or on behalf of the Interested Stockholder in connection with its direct or indirect acquisition of beneficial ownership of shares of such class or series of Capital Stock. If the consideration so paid for shares of any class or series of Capital Stock varied as to form, the form of consideration for such class or series of Capital Stock shall be either cash or the form used to acquire beneficial ownership of the largest number of shares of such class or series of Capital Stock previously acquired by the Interested Stockholder. d. After the Determination Date and prior to the consummation of such Business Combination: (i) except as approved by a majority of the Continuing Directors, there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) payable in accordance with the terms of any outstanding Capital Stock; (ii) there shall have been no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any stock split, stock dividend or subdivision of the Common Stock), except as approved by a majority of the Continuing Directors; (iii) there shall have been an increase in the annual rate of dividends paid on the Common Stock as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction that has the effect of reducing the number of outstanding shares of -6- 7 Common Stock, unless the failure so to increase such annual rate is approved by a majority of the Continuing Directors; and (iv) such Interested Stockholder shall not have become the beneficial owner of any additional shares of Capital Stock except as part of the transaction that results in such Interested Stockholder becoming an Interested Stockholder and except in a transaction that, after giving effect thereto, would not result in any increase in the Interested Stockholder's percentage beneficial ownership of any class or series of Capital Stock. e. A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (the "Act") (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to all stockholders of the corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions). The proxy or information statement shall contain on the first page thereof, in a prominent place, any statement as to the advisability (or inadvisability) of the Business Combination that the Continuing Directors, or any of them, may choose to make and, if deemed advisable by a majority of the Continuing Directors, the opinion of an investment banking firm selected by a majority of the Continuing Directors as to the fairness (or not) of the terms of the Business Combination from a financial point of view to the holders of the outstanding shares of Capital Stock other than the Interested Stockholder and its Affiliates or Associates (as hereinafter defined), such investment banking firm to be paid a reasonable fee for its services by the corporation. f. Such Interested Stockholder shall not have made any major change in the corporation's business or equity capital structure without the approval of a majority of the Continuing Directors. C. The following definitions shall apply with respect to this Article SIXTH: 1. The term "Business Combination" shall mean: a. any merger or consolidation of the corporation or any Subsidiary (as hereinafter defined) with (i) any Interested Stockholder or (ii) any other company (whether -7- 8 or not itself an Interested Stockholder) which is or after such merger or consolidation would be an Affiliate or Associate of an Interested Stockholder; or b. any sale, lease, exchange, mortgage, pledge, transfer or other disposition or security arrangement, investment, loan, advance, guarantee, agreement to purchase, agreement to pay, extension of credit, joint venture participation or other arrangement (in one transaction or a series of transactions) with or for the benefit of any Interested Stockholder or any Affiliate or Associate of any Interested Stockholder involving any assets, securities or commitments of the corporation, any Subsidiary or any Interested Stockholder or any Affiliate or Associate of any Interested Stockholder which (except for any arrangement, whether as employee, consultant or otherwise, other than as a director, pursuant to which any Interested Stockholder or any Affiliate or Associate thereof shall, directly or indirectly, have any control over or responsibility for the management of any aspect of the business or affairs of the corporation, with respect to which arrangements the value tests set forth below shall not apply), together with all other such arrangements (including all contemplated future events), has an aggregate Fair Market Value and/or involves aggregate commitments of $25,000,000 or more or constitutes more than five percent of the book value of the total assets (in the case of transactions involving assets or commitments other than capital stock) or five percent of the stockholders' equity (in the case of transactions in capital stock) of the entity in question (the "Substantial Part"), as reflected in the most recent fiscal year-end consolidated balance sheet of such entity existing at the time the stockholders of the corporation would be required to approve or authorize the Business Combination involving the assets, securities and/or commitments constituting any Substantial Part; or c. the adoption of any plan or proposal for the liquidation or dissolution of the corporation or for any amendment to the corporation's By-Laws; or d. any reclassification of securities (including any reverse stock split), or recapitalization of the corporation, or any merger or consolidation of the corporation with any of its Subsidiaries or any other transaction (whether or not with or otherwise involving an Interested Stockholder) that has the effect, directly or indirectly, of increasing the proportionate share of any class or series of Capital Stock, or any securities -8- 9 convertible into Capital Stock or into equity securities of any Subsidiary, that is beneficially owned by any Interested Stockholder or any Affiliate or Associate of any Interested Stockholder, or e. any agreement, contract or other arrangement providing for any one or more of the actions specified in the foregoing clauses (a) to (d). 2. The term "Capital Stock" shall mean all capital stock of the corporation authorized to be issued from time to time under Article FOURTH of this Restated Certificate of Incorporation, and the term "Voting Stock" shall mean all Capital Stock which by its terms may be voted on all matters submitted to stockholders of the corporation generally. 3. The term "person" shall mean any individual, firm, company or other entity and shall include any group comprised of any person and any other person with whom such person or any Affiliate or Associate of such person has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of Capital Stock. 4. The term "Interested Stockholder" shall mean any person (other than (i) the corporation or any Subsidiary, any profit-sharing, employee stock ownership or other employee benefit plan of the corporation or any Subsidiary or any trustee or fiduciary with respect to any such plan or holding Voting Stock for the purpose of funding any such plan or funding other employee benefits for employees of the corporation or any Subsidiary when acting in such capacity, and (ii) until immediately following the Distribution (as defined in the Distribution Agreement, dated as of November 4, 1999, by and between the corporation and the corporation known as of the date thereof as Tenneco Inc., a Delaware corporation ("Old Tenneco")), Old Tenneco or any subsidiary of Old Tenneco) who (a) is or has announced or publicly disclosed a plan or intention to become the beneficial owner of Voting Stock representing five percent or more of the votes entitled to be cast by the holders of all then outstanding shares of Voting Stock; or (b) is an Affiliate or Associate of the corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner of Voting Stock representing five percent or more of the votes entitled to be cast by the holders of all then outstanding shares of Voting Stock. 5. A person shall be a "beneficial owner" of any Capital Stock (a) which such person or any of its Affiliates or -9- 10 Associates beneficially owns, directly or indirectly; (b) which such person or any of its Affiliates or Associates has, directly or indirectly, (i) the right to acquire (whether such right is exercisable immediately or subject only to the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or understanding; or (c) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Capital Stock. For the purposes of determining whether a person is an Interested Stockholder pursuant to Paragraph 4 of this Section C, the number of shares of Capital Stock deemed to be outstanding shall include shares deemed beneficially owned by such person through application of this Paragraph 5 of Section C, but shall not include any other shares of Capital Stock that may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. Notwithstanding the foregoing, for purposes of this Article SIXTH, a person shall not be deemed a "beneficial owner" of any Capital Stock which such person has the right to acquire upon exercise of the Rights issued pursuant to the Qualified Offer Plan Rights Agreement, dated as of November 4, 1999, between the corporation and First Chicago Trust Company of New York (including any successor rights plan thereto, the "Rights Agreement"), if such person would not be deemed the beneficial owner of such Capital Stock under the terms of such Rights Agreement. 6. The terms "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 under the Act as in effect on December 11, 1996 (the term "registrant" in said Rule 12b-2 meaning in this case the corporation). 7. The term "Subsidiary" means any company of which a majority of any class of equity securities are beneficially owned by the corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in Paragraph 4 of this Section C, the term "Subsidiary" shall mean only a company of which a majority of each class of equity security is beneficially owned by the corporation. 8. The term "Continuing Director" means any member of the Board of Directors, while such person is a member of the Board of Directors, who is not an Affiliate or Associate or representative of the Interested Stockholder and was a member -10- 11 of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Continuing Director while such successor is a member of the Board of Directors, who is not an Affiliate or Associate or representative of the Interested Stockholder and is recommended or elected to succeed the Continuing Director by a majority of Continuing Directors. 9. The term "Fair Market Value" means (a) in the case of cash, the amount of such cash; (b) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on The Nasdaq Stock Market or any similar system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by a majority of the Continuing Directors in good faith; and (c) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined in good faith by a majority of the Continuing Directors. 10. In the event of any Business Combination in which the corporation survives, the phrase "consideration other than cash to be received" as used in Paragraphs 2.a and 2.b of Section B of this Article SIXTH shall include the shares of Common Stock and/or the shares of any other class or series of Capital Stock retained by the holders of such shares. D. A majority of the Continuing Directors shall have the power and duty to determine for the purposes of this Article SIXTH, on the basis of information known to them after reasonable inquiry, all questions arising under this Article SIXTH, including, without limitation, (a) whether a person is an Interested Stockholder, (b) the number of shares of Capital Stock or other securities beneficially owned by any person, (c) whether a person is an Affiliate or Associate of another, (d) whether a Proposed Action is with, or proposed by, or on behalf of an Interested Stockholder or an Affiliate or Associate of an Interested Stockholder, (e) whether the assets that are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of $25,000,000 or -11- 12 more, and (f) whether the assets or securities that are the subject of any Business Combination constitute a Substantial Part. Any such determination made in good faith shall be binding and conclusive on all parties. E. Nothing contained in this Article SIXTH shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law. F. The fact that any Business Combination complies with the provisions of Section B of this Article SIXTH shall not be construed to impose any fiduciary duty, obligation or responsibility on the Board of Directors, or any member thereof, to approve such Business Combination or recommend its adoption or approval to the stockholders of the corporation, nor shall such compliance limit, prohibit or otherwise restrict in any manner the Board of Directors, or any member thereof, with respect to evaluations of or actions and responses taken with respect to such Business Combination. G. For the purposes of this Article SIXTH, a Business Combination or any proposal to amend or repeal, or to adopt any provision of this Restated Certificate of Incorporation inconsistent with, this Article SIXTH (collectively, "Proposed Action"), is presumed to have been proposed by or on behalf of an Interested Stockholder or an Affiliate or Associate of an Interested Stockholder or a person who thereafter would become such if (1) after the Interested Stockholder became such, the Proposed Action is proposed following the election of any director of the corporation who with respect to such Interested Stockholder would not qualify to serve as a Continuing Director or (2) such Interested Stockholder, Affiliate, Associate or person votes for or consents to the adoption of any such Proposed Action, unless as to such Interested Stockholder, Affiliate, Associate or person a majority of the Continuing Directors makes a good faith determination that such Proposed Action is not proposed by or on behalf of such Interested Stockholder, Affiliate, Associate or person, based on information known to them after reasonable inquiry. H. Notwithstanding any other provisions of this Restated Certificate of Incorporation or the By-Laws of the corporation (and notwithstanding the fact that a lesser percentage or separate class vote may be specified by law, this Restated Certificate of Incorporation or the By-Laws of the corporation), any proposal to amend or repeal, or to adopt any provision of this Restated Certificate of Incorporation inconsistent with, this Article SIXTH which is proposed by or on behalf of an Interested Stockholder or an Affiliate or Associate of an Interested Stockholder shall require the affirmative vote of the holders of not less than 66 2/3% -12- 13 of the votes entitled to be cast by the holders of all the then outstanding shares of Voting Stock, voting together as a single class, excluding Voting Stock beneficially owned by any Interested Stockholder, provided, however, that this Section H shall not apply to, and such 662/3% vote shall not be required for, any amendment or repeal of, or the adoption of any provision inconsistent with, this Article SIXTH unanimously recommended by the Board of Directors if all of such directors are persons who would be eligible to serve as Continuing Directors within the meaning of Paragraph 8 of Section C of this Article SIXTH. SEVENTH: A director of the corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal. EIGHTH: Subject to the provisions of this Restated Certificate of Incorporation and applicable law, the corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed herein or by applicable law, and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article EIGHTH. IN WITNESS WHEREOF, the undersigned has executed this Restated Certificate of Incorporation this 4th day of November, 1999. TENNECO PACKAGING INC. By: /s/ Richard L. Wambold ---------------------------- Richard L. Wambold President -13- EX-3.1(B) 3 CERTIFICATE OF AMENDMENT 1 EXHIBIT 3.1(b) CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF TENNECO PACKAGING INC. Tenneco Packaging Inc., a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify that: 1. The Restated Certificate of Incorporation of the Corporation is hereby amended by deleting Article FIRST thereof and inserting the following in lieu thereof: "FIRST. The name of the Corporation is Pactiv Corporation." 2. The foregoing amendment was duly adopted in accordance with the provisions of Sections 242 and 228 (by the written consent of the sole stockholder of the Corporation) of the General Corporation Law of the State of Delaware. 3. This Certificate of Amendment, and the amendment effected hereby, shall become effective at 4:01 p.m., Eastern Standard Time, on November 4, 1999. 2 IN WITNESS WHEREOF, Tenneco Packaging Inc. has caused this Certificate to be executed by its duly authorized officer, on this 4th day of November, 1999. TENNECO PACKAGING INC. By: /s/ Richard L. Wambold ---------------------- Richard L. Wambold President EX-3.1(C) 4 CERTIFICATE OF DESIGNATION OF SERIES A 1 EXHIBIT 3.1(c) CERTIFICATE OF DESIGNATION OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF PACTIV CORPORATION PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE PACTIV CORPORATION a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY: That pursuant to the authority vested in the Board of Directors in accordance with the provisions of the Restated Certificate of Incorporation of the said Corporation, the said Board of Directors adopted the following resolution creating a series of 750,000 shares of Preferred Stock designated as "Series A Junior Participating Preferred Stock": RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the Restated Certificate of Incorporation, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows: SERIES A JUNIOR PARTICIPATING PREFERRED STOCK 1. Designation and Amount. There shall be a series of Preferred Stock that shall be designated as "Series A Junior Participating Preferred Stock," and the number of shares constituting such series shall be 750,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, however, that no decrease shall reduce the number of shares of Series A Junior Participating Preferred Stock to less than the number of shares then issued and outstanding plus the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Corporation. 2. Dividends and Distribution. (A) Subject to the prior and superior rights of the holders of any shares of any class or series of stock of the Corporation ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock, in preference to the holders of shares of any class or series of stock of the Corporation ranking junior to the Series A Junior Participating Preferred Stock in respect thereof, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of January, April, July 2 and October, in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $25.00 or (b) the Adjustment Number (as defined below) times the aggregate per share amount of all cash dividends, and the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $.01 per share, of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. The "Adjustment Number" shall initially be 1000. In the event the Corporation shall at any time after November 4, 1999 (i) declare and pay any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock). (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof. 3. Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights: -2- 3 (A) Each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment Number on all matters submitted to a vote of the stockholders of the Corporation. (B) Except as required by law, by Section 3(C) and by Section 10 hereof, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. (C) If, at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether or not consecutive) payable on any share or shares of Series A Junior Participating Preferred Stock are in default, the number of directors constituting the Board of Directors of the Corporation shall be increased by two. In addition to voting together with the holders of Common Stock for the election of other directors of the Corporation, the holders of record of the Series A Junior Participating Preferred Stock, voting separately as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each subsequent annual meeting of stockholders), unless all dividends in arrears on the Series A Junior Participating Preferred Stock have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the Corporation, the holders of any Series A Junior Participating Preferred Stock being entitled to cast a number of votes per share of Series A Junior Participating Preferred Stock as is specified in paragraph (A) of this Section 3. Until the default in payments of all dividends which permitted the election of said directors shall cease to exist, any director who shall have been so elected pursuant to the provisions of this Section 3(C) may be removed at any time without cause only by the affirmative vote of the holders of the shares of Series A Junior Participating Preferred Stock at the time entitled to cast a majority of the votes entitled to be cast for the election of any such director at a special meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when such default shall cease to exist, the holders of the Series A Junior Participating Preferred Stock shall be divested of the foregoing special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon the termination of the foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to said special voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be reduced by two. The voting rights granted by this Section 3(C) shall be in addition to any other voting rights granted to the holders of the Series A Junior Participating Preferred Stock in this Section 3. 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not: (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock; -3- 4 (ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; or (iii) purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of Series A Junior Participating Preferred Stock, or to such holders and holders of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. 5. Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to any conditions and restrictions on issuance set forth herein. 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received an amount per share (the "Series A Liquidation Preference") equal to the greater of (i) $500.00 plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, or (ii) the Adjustment Number times the per share amount of all cash and other property to be distributed in respect of the Common Stock upon such liquidation, dissolution or winding up of the Corporation. (B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series A Junior Participating Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably to the holders of the Series A Junior Participating Preferred Stock and the holders of such parity shares in proportion to their respective liquidation preferences. -4- 5 (C) Neither the merger or consolidation of the Corporation into or with another corporation nor the merger or consolidation of any other corporation into or with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 6. 7. Consolidation, Merger, Etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the outstanding shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. 8. No Redemption. Shares of Series A Junior Participating Preferred Stock shall not be subject to redemption by the Corporation. 9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Preferred Stock as to the payment of dividends and as to the distribution of assets upon liquidation, dissolution or winding up, unless the terms of any such series shall provide otherwise, and shall rank senior to the Common Stock as to such matters. 10. Amendment. At any time that any shares of Series A Junior Participating Preferred Stock are outstanding, the Restated Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class. 11. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock. IN WITNESS WHEREOF, the undersigned has executed this Certificate this 4th day of November, 1999. PACTIV CORPORATION By: /s/ Don P. Carpenter --------------------------------- Name: Don P. Carpenter Title: Vice President -5- EX-3.2 5 AMENDED & RESTATED BY-LAWS 1 EXHIBIT 3.2 AMENDED AND RESTATED BYLAWS OF PACTIV CORPORATION ARTICLE I PLACE OF STOCKHOLDER MEETINGS Section 1. All meetings of the stockholders of the corporation shall be held at such place or places, within or without the State of Delaware, as may from time to time be fixed by the Board of Directors of the corporation (the "Board"), or as shall be specified or fixed in the respective notices or waivers of notice thereof. ANNUAL MEETING Section 2. The Annual Meeting of Stockholders shall be held on such date and at such time as may be fixed by the Board and stated in the notice thereof, for the purpose of electing directors and for the transaction of only such other business as is properly brought before the meeting in accordance with these Bylaws. SPECIAL MEETING Section 3. Subject to the rights of the holders of any series of preferred stock, par value $.01 per share, of the corporation (the "Preferred Stock") to elect additional directors under specified circumstances, special meetings of the stockholders shall be called by the Board. Special meetings shall be held at such date and at such time as the Board may designate. NOTICE OF MEETING Section 4. Written notice of each meeting of stockholders, stating the place, date and hour of the meeting, and the purpose or purposes thereof, shall be given not less than ten nor more than sixty days before the date of such meeting to each stockholder entitled to vote thereat. QUORUM Section 5. Unless otherwise provided by statute, the holders of shares of stock entitled to cast a majority of votes at a meeting, present either in person or by proxy, shall constitute a quorum at such meeting. The Secretary of the corporation or in his absence an Assistant Secretary or an appointee of the 2 presiding officer of the meeting, shall act as the Secretary of the meeting. VOTING Section 6. Except as otherwise provided by law or the Restated Certificate of Incorporation, each stockholder entitled to vote at any meeting shall be entitled to one vote, in person or by proxy, for each share held of record on the record date fixed as provided in Section 4 of Article V of these Bylaws for determining the stockholders entitled to vote at such meeting. At all meetings of stockholders for the election of directors a plurality of the votes cast shall be sufficient to elect. All other elections and questions shall, unless otherwise provided by the Restated Certificate of Incorporation, these Bylaws, the rules or regulations of any stock exchange applicable to the corporation, or applicable law or pursuant to any regulation applicable to the corporation or its securities, be decided by the affirmative vote of the holders of a majority in voting power of the shares of stock of the corporation which are present in person or by proxy and entitled to vote thereon. Elections of directors need not be by written ballot; provided, however, that by resolution duly adopted, a vote by written ballot may be required. PROXIES Section 7. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument revoking the proxy or by delivering a proxy in accordance with applicable law bearing a later date to the Secretary of the corporation. In order to be exercised at a meeting of stockholders, proxies shall be delivered to the Secretary of the corporation or his representative at or before the time of such meeting. INSPECTORS Section 8. At each meeting of the stockholders the polls shall be opened and closed, the proxies and ballots shall be received and be taken in charge and all questions touching the qualification of voters and the validity of proxies and the -2- 3 acceptance or rejection of votes shall be decided by three Inspectors, two of whom shall have power to make a decision. Such Inspectors shall be appointed by the Board before the meeting, or in default thereof by the presiding officer at the meeting, and shall be sworn to the faithful performance of their duties. If any of the Inspectors previously appointed shall fail to attend or refuse or be unable to serve, substitutes shall be appointed by the presiding officer. CONDUCT OF MEETINGS Section 9. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the chairman of the meeting. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. ADVANCE NOTICE Section 10. (A) (1) Nominations of persons for election to the Board of Directors of the corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the corporation's notice of meeting (or any supplement thereto), (b) by or at the direction of the Board of Directors or (c) by any stockholder of the corporation who was a stockholder of record of the corporation at the time the notice provided for in this Section 10 is delivered to the Secretary of the corporation, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 10. -3- 4 (2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Section 10, the stockholder must have given timely notice thereof in writing to the Secretary of the corporation and any such proposed business other than the nominations of persons for election to the Board of Directors must constitute a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the ninetieth day nor earlier than the close of business on the one hundred twentieth day prior to the first anniversary of the preceding year's annual meeting (provided, however, that in the event that the date of the annual meeting is more than thirty days before or more than seventy days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the one hundred twentieth day prior to such annual meeting and not later than the close of business on the later of the ninetieth day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made by the corporation). For purposes of the first annual meeting of stockholders of the corporation held after 1999, the anniversary date shall be deemed to be May 9, 2000. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth: (a) as to each person whom the stockholder proposes to nominate for election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder (and such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the By-laws of the corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the corporation's books, and of such beneficial owner, (ii) the class and number of shares of capital stock of the corporation which are owned -4- 5 beneficially and of record by such stockholder and such beneficial owner, (iii) a representation that the stockholder is a holder of record of stock of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination, and (iv) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation's outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies from stockholders in support of such proposal or nomination. The corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the corporation. (3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 10 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the corporation at an annual meeting is increased and there is no public announcement by the corporation naming the nominees for the additional directorships at least one hundred days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Section 10 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the corporation. (B) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the corporation's notice of meeting (1) by or at the direction of the Board of Directors or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the corporation who is a stockholder of record at the time the notice provided for in this Section 10 is delivered to the Secretary of the corporation, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 10. In the event the corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the corporation's notice of meeting, if the stockholder's notice -5- 6 required by paragraph (A)(2) of this Section 10 shall be delivered to the Secretary at the principal executive offices of the corporation not earlier than the close of business on the one hundred twentieth day prior to such special meeting and not later than the close of business on the later of the ninetieth day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. (C) (1) Only such persons who are nominated in accordance with the procedures set forth in this Section 10 shall be eligible to be elected at an annual or special meeting of stockholders of the corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 10. Except as otherwise provided by law, the chairman of the meeting shall have the power and duty (a) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 10 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder's nominee or proposal in compliance with such stockholder's representation as required by clause (A)(2)(c)(iv) of this Section 10) and (b) if any proposed nomination or business was not made or proposed in compliance with this Section 10, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. (2) For purposes of this Section 10, "public announcement" shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. (3) Notwithstanding the foregoing provisions of this Section 10, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 10. Nothing in this Section 10 shall be deemed to affect any rights (a) of stockholders to request inclusion of proposals in the corporation's proxy statement pursuant to Rule 14a-8 under the -6- 7 Exchange Act or (b) of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the certificate of incorporation. ARTICLE II BOARD OF DIRECTORS NUMBER; METHOD OF ELECTION; TERMS OF OFFICE AND QUALIFICATION Section 1. The business and affairs of the corporation shall be managed under the direction of the Board. The number of directors which shall constitute the entire Board shall not be less than five nor more than sixteen and shall be determined from time to time by resolution adopted by a majority of the entire Board. Any director may resign his office at any time by delivering his resignation in writing to the corporation, and the acceptance of such resignation unless required by the terms thereof shall not be necessary to make such resignation effective. No person who shall have attained the age of 73 shall be eligible for election or reelection, as the case may be, as a director of the corporation. MEETINGS Section 2. The Board may hold its meetings and have an office in such place or places within or without the State of Delaware as the Board by resolution from time to time may determine. The Board may in its discretion provide for regular or stated meetings of the Board. Notice of regular or stated meetings need not be given. Special meetings of the Board shall be held whenever called by direction of the Chief Executive Officer, the President or any two of the directors. Notice of any special meeting shall be given by the Secretary to each director either by mail or by telegram, facsimile, telephone or other electronic communication or transmission. If mailed, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, at least three days before such meeting. If by telegram, such notice shall be deemed adequately delivered when the telegram is delivered to the telegraph corporation at least twenty-four hours before such meeting. If by facsimile, telephone or other electronic communication or transmission, such notice shall be transmitted at least twenty-four hours before such meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting. Except as otherwise provided by applicable law, at any meeting at which every director shall be present, even though without notice, any business may be transacted. No notice of any adjourned meeting need be given. The Board shall meet immediately after election, following the Annual Meeting of Stockholders, for the purpose of -7- 8 organizing, for the election of corporate officers as hereinafter specified, and for the transaction of any other business which may come before it. No notice of such meeting shall be necessary. QUORUM Section 3. Except as otherwise expressly required by these Bylaws or by statute, a majority of the directors then in office (but not less than one-third of the total number of directors constituting the entire Board) shall be present at any meeting of the Board in order to constitute a quorum for the transaction of business at such meeting, and the vote of a majority of the directors present at any such meeting at which quorum is present shall be necessary for the passage of any resolution or for an act to be the act of the Board. In the absence of a quorum, a majority of the directors present may adjourn such meeting from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. COMPENSATION OF BOARD OF DIRECTORS Section 4. Each director (other than a director who is a salaried officer of the corporation or of any subsidiary of the corporation), in consideration of his serving as such, shall be entitled to receive from the corporation such amount per annum and such fees for attendance at meetings of the Board or of any committee of the Board (a "Committee"), or both, as the Board shall from time to time determine. The Board may likewise provide that the corporation shall reimburse each director or member of a Committee for any expenses incurred by him on account of his attendance at any such meeting. Nothing contained in this Section shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor. ARTICLE III COMMITTEES OF THE BOARD COMMITTEES Section 1. The Board shall elect from the directors an Executive Committee, an Audit Committee and any other Committee which the Board may by resolution prescribe. Any such other Committee shall be comprised of such persons and shall possess such authority as shall be set forth in such resolution. -8- 9 PROCEDURE Section 2. (1) Each Committee shall fix its own rules of procedure and shall meet where and as provided by such rules. Unless otherwise stated in these Bylaws, a majority of a Committee shall constitute a quorum. (2) In the absence or disqualification of a member of any Committee, the members of such Committee present at any meeting, and not disqualified from voting, whether or not they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Fees in connection with such appointments shall be established by the Board. REPORTS TO THE BOARD Section 3. All completed actions by the Executive and Audit Committees shall be reported to the Board at the next succeeding Board meeting and shall be subject to revision or alteration by the Board, provided, that no acts or rights of third parties shall be affected by any such revision or alteration. EXECUTIVE COMMITTEE Section 4. The Board shall elect an Executive Committee comprised of the Chief Executive Officer and not less than [FOUR] additional members of the Board. During the interval between the meetings of the Board, the Executive Committee shall possess and may exercise all the powers of the Board in the management and direction of all the business and affairs of the corporation (except the matters hereinafter assigned to the Compensation Committee) including, without limitation, the power and authority to declare dividends and to authorize the issuance of stock, in such manner as the Executive Committee shall deem best for the interests of the corporation in all cases in which specific directions shall not have been given by the Board. AUDIT COMMITTEE Section 5. The Board shall elect from among its members an Audit Committee consisting of at least [THREE] members. The Board shall appoint a chairman of said Committee who shall be one of its members. The Audit Committee shall have such authority and duties as the Board by resolution shall prescribe. In no event shall a director who is also an officer or employee of the corporation or any of its subsidiary companies serve as a member of such Committee. The Chief Executive Officer shall have the right to attend (but not vote at) each meeting of such Committee. ARTICLE IV -9- 10 OFFICERS GENERAL PROVISIONS Section 1. The corporate officers of the corporation shall consist of the following: a Chairman and/or a President, one of whom shall be designated Chief Executive Officer and each of whom shall be chosen from the Board; one or more Vice Chairman, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and Assistant Vice Presidents; a General Counsel, a Secretary, one or more Assistant Secretaries, a Treasurer, one or more Assistant Treasurers, a Controller, and such other officers as the Board may from time to time designate. Insofar as permitted by statute, the same person may hold two or more offices. All officers chosen by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article IV. The Chairman and/or President, each Vice Chairman, Executive Vice President, Senior Vice President and Vice President, the General Counsel, the Secretary and any Assistant Secretary, the Treasurer and any Assistant Treasurer, and the Controller shall be elected by the Board. Each such officer shall hold office until his successor is elected or appointed and qualified or until his earlier death, resignation or removal. Any officer may be removed, with or without cause, at any time by the Board. A vacancy in any office may be filled for the unexpired portion of the term in the same manner as provided in these Bylaws for election or appointment to such office. POWERS AND DUTIES OF THE CHIEF EXECUTIVE OFFICER Section 2. The Chief Executive Officer shall have general charge and management of the affairs, property and business of the corporation, subject to the Board, the Executive Committee and the provisions of these Bylaws. The Chief Executive Officer or in his absence such other individual as the Board may select, shall preside at all meetings of the stockholders. He shall also preside at meetings of the Board and the Executive Committee, and in his absence the Board or the Executive Committee, as the case may be, shall appoint one of their number to preside. The Chief Executive Officer shall perform all duties assigned to him in these Bylaws and such other duties as may from time to time be assigned to him by the Board. He shall have the power to appoint and remove, with or without cause, such officers, other than those elected by the Board as provided for in these Bylaws, as in his judgment may be necessary or proper for the transaction of the business of the corporation, and shall determine their duties, all subject to ratification by the Board. POWERS AND DUTIES OF OTHER OFFICERS -10- 11 Section 3. The Chairman shall perform such duties as may from time to time be assigned to him by the Board, the Executive Committee or the Chief Executive Officer. Section 4. Each Vice Chairman shall perform such duties as may from time to time be assigned to him by the Board, the Executive Committee or the Chief Executive Officer. Section 5. The President shall perform such duties as may from time to time be assigned to him by the Board, the Executive Committee or the Chief Executive Officer. Section 6. Each Executive Vice President shall perform such duties as may from time to time be assigned to him by the Board, the Executive Committee or the Chief Executive Officer. Section 7. Each Senior Vice President shall perform such duties as may from time to time be assigned to him by the Board, the Executive Committee or the Chief Executive Officer. Section 8. Each Vice President and Assistant Vice President shall perform such duties as may from time to time be assigned to him by the Board, the Executive Committee, the Chief Executive Officer or an Executive Vice President. Section 9. The General Counsel shall have general supervision and control of all of the corporation's legal business. He shall perform such other duties as may be assigned to him by the Board, the Executive Committee or the Chief Executive Officer. Section 10. The Secretary or an Assistant Secretary shall record the proceedings of all meetings of the Board, the Executive Committee of the Board and the stockholders, in books kept for that purpose. The Secretary shall be the custodian of the corporate seal, and he or an Assistant Secretary shall affix the same to and countersign papers requiring such acts; and he and the Assistant Secretaries shall perform such other duties as may be required by the Board, the Executive Committee or the Chief Executive Officer. Section 11. The Treasurer and Assistant Treasurers shall have care and custody of all funds of the corporation and disburse and administer the same under the direction of the Board, the Executive Committee or the Chief Executive Officer and shall perform such other duties as the Board, the Executive Committee or the Chief Executive Officer shall assign to them. Section 12. The Controller shall maintain adequate records of all assets, liabilities and transactions of the corporation and see that audits thereof are currently and regularly made; and he shall perform such other duties as may be required by the Board, the Executive Committee or the Chief Executive Officer. -11- 12 SALARIES AND APPOINTMENTS Section 13. The salaries of corporate officers shall be fixed by the Compensation Committee provided for in Section 5 of Article III hereof, except that the fixing of salaries below certain levels, determinable from time to time by the Compensation Committee, may in the discretion of the Committee be delegated to the Chief Executive Officer, subject to the approval of the Board. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 14. (1) The corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a "Covered Person") who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, including appeals (a "proceeding"), by reason of the fact that he, or a person for whom he is the legal representative, is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys' fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in paragraph (3) of this Section 14, the corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized by the Board. (2) The corporation shall pay the expenses (including attorneys' fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Section 14 or otherwise. (3) If a claim for indemnification or payment of expenses under this Section 14 is not paid in full within thirty days after a written claim therefor by the Covered Person has been received by the corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of -12- 13 prosecuting such claim. In any such action the corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or payment of expenses under applicable law. (4) The rights conferred on any Covered Person by this Section 14 shall not be exclusive of any other rights which such Covered Person may have or hereafter acquire under any statute, provision of the Restated Certificate of Incorporation, these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. (5) The corporation's obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or nonprofit enterprise. (6) Any repeal or modification of the foregoing provisions of this Section 14 shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such repeal or modification. (7) This Section 14 shall not limit the right of the corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action. ARTICLE V CAPITAL STOCK CERTIFICATES OF STOCK Section 1. Certificates of stock certifying the number of shares owned shall be issued to each stockholder in such form not inconsistent with the Restated Certificate of Incorporation as shall be approved by the Board. Such certificates of stock shall be numbered and registered in the order in which they are issued and shall be signed by the Chairman, the President or a Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary. Any and all of the signatures on the certificates may be a facsimile. TRANSFER OF SHARES Section 2. Transfers of shares shall be made only upon the books of the corporation by the holder, in person, or by power of -13- 14 attorney duly executed and filed with the Secretary of the corporation, and on the surrender of the certificate or certificates of such shares, properly assigned. The corporation may, if and whenever the Board shall so determine, maintain one or more offices or agencies, each in charge of an agent designated by the Board, where the shares of the capital stock of the corporation shall be transferred and/or registered. The Board may also make such additional rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates for shares of the capital stock of the corporation. LOST, STOLEN OR DESTROYED CERTIFICATES Section 3. The corporation may issue a new certificate of capital stock of the corporation in place of any certificate theretofore issued by the corporation, alleged to have been lost, stolen or destroyed, and the corporation may, but shall not be obligated to, require the owner of the alleged lost, stolen or destroyed certificate, or his legal representatives, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate, as the officers of the corporation may, in their discretion, require. FIXING OF RECORD DATE Section 4. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date: (1) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty nor less than ten days before the date of such meeting; (2) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than ten days from the date upon which the resolution fixing the record date is adopted by the Board; and (3) in the case of any other action, shall not be more than sixty days prior to such other action. If no record date is fixed by the Board: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is -14- 15 waived, at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting shall be determined in accordance with Article VI of these Bylaws; and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. ARTICLE VI CONSENTS TO CORPORATE ACTION RECORD DATE Section 1. The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting shall be as fixed by the Board or as otherwise established under this Section. Any person seeking to have the stockholders authorize or take corporate action by written consent without a meeting shall by written notice addressed to the Secretary and delivered to the corporation, request that a record date be fixed for such purpose. The Board may fix a record date for such purpose which shall be no more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board and shall not precede the date such resolution is adopted. If the Board fails within 10 days after the corporation receives such notice to fix a record date for such purpose, the record date shall be the day on which the first written consent is delivered to the corporation in the manner described in Section 2 below unless prior action by the Board is required under the General Corporation Law of the State of Delaware, in which event the record date shall be at the close of business on the day on which the Board adopts the resolution taking such prior action. PROCEDURES Section 2. Every written consent purporting to take or authorizing the taking of corporate action and/or related revocations (each such written consent and related revocation is referred to in this Article VI as a "Consent") shall bear the date of signature of each stockholder who signs the Consent, and no Consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated Consent delivered in the manner required by this Section 2, Consents signed by a sufficient number of stockholders to take such action are delivered to the corporation. -15- 16 A Consent shall be delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery to the corporation's registered office shall be made by hand or by certified or registered mail, return receipt requested. In the event of the delivery to the corporation of a Consent, the Secretary of the corporation shall provide for the safe-keeping of such Consent and shall promptly conduct such ministerial review of the sufficiency of the Consents and of the validity of the action to be taken by stockholder consent as he deems necessary or appropriate, including, without limitation, whether the holders of a number of shares having the requisite voting power to authorize or take the action specified in the Consent have given consent; provided, however, that if the corporate action to which the Consent relates is the removal or replacement of one or more members of the Board, the Secretary of the corporation shall promptly designate two persons, who shall not be members of the Board, to serve as Inspectors with respect to such Consent and such Inspectors shall discharge the functions of the Secretary of the corporation under this Section 2. If after such investigation the Secretary or the Inspectors (as the case may be) shall determine that the Consent is valid and that the action therein specified has been validly authorized, that fact shall forthwith be certified on the records of the corporation kept for the purpose of recording the proceedings of meetings of stockholders, and the Consent shall be filed in such records, at which time the Consent shall become effective as stockholder action. In conducting the investigation required by this Section 2, the Secretary or the Inspectors (as the case may be) may, at the expense of the corporation, retain special legal counsel and any other necessary or appropriate professional advisors, and such other personnel as they may deem necessary or appropriate to assist them, and shall be fully protected in relying in good faith upon the opinion of such counsel or advisors. ARTICLE VII MISCELLANEOUS DIVIDENDS AND RESERVES Section 1. Dividends upon the capital stock of the corporation may be declared as permitted by law by the Board or the Executive Committee at any regular or special meeting. Before payment of any dividend or making any distribution of profits, there may be set aside out of the surplus or net profits of the corporation such sum or sums as the Board or the Executive Committee, from time to time, in their absolute discretion, think -16- 17 proper as a reserve fund to meet contingencies, or for such other purposes as the Board or Executive Committee shall think conducive to the interests of the corporation, and any reserve so established may be abolished and restored to the surplus account by like action of the Board or the Executive Committee. SEAL Section 2. The seal of the corporation shall bear the corporate name of the corporation, the year of its incorporation and the words "Corporate Seal, Delaware". WAIVER Section 3. Whenever any notice whatever is required to be given by statute or under the provisions of the Restated Certificate of Incorporation or these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders or the Board, as the case may be, need be specified in any waiver of notice of such meeting. FISCAL YEAR Section 4. The fiscal year of the corporation shall begin with January first and end with December thirty-first. CONTRACTS Section 5. Except as otherwise required by law, the Restated Certificate of Incorporation or these Bylaws, any contracts or other instruments may be executed and delivered in the name and on the behalf of the corporation by such officer or officers of the corporation as the Board may from time to time direct. Such authority may be general or confined to specific instances as the Board may determine. The Chairman of the Board, the President or any Vice President may execute bonds, contracts, deeds, leases and other instruments to be made or executed for or on behalf of the corporation. Subject to any restrictions imposed by the Board, the Chairman of the Board, the President or any Vice President of the corporation may delegate contractual powers to others under his jurisdiction, it being understood, however, that any such delegation of power shall not relieve such officer of responsibility with respect to the exercise of such delegated power. PROXIES -17- 18 Section 6. Unless otherwise provided by resolution adopted by the Board, the Chairman of the Board, the President or any Vice President may from time to time appoint an attorney or attorneys or agent or agents of the corporation, in the name and on behalf of the corporation, to cast the votes which the corporation may be entitled to cast as the holder of stock or other securities in any other corporation or other entity, any of whose stock or other securities may be held by the corporation, at meetings of the holders of the stock or other securities of such other corporation or other entity, or to consent in writing, in the name of the corporation as such holder, to any action by such other corporation or other entity, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name and on behalf of the corporation and under its corporate seal or otherwise, all such written proxies or other instruments as he may deem necessary or proper in the premises. AMENDMENTS Section 7. The Board from time to time shall have the power to make, alter, amend or repeal any and all of these Bylaws, but any Bylaws so made, altered or repealed by the Board may be amended, altered or repealed by the stockholders. -18- 19 CERTIFICATION The undersigned hereby certifies that he is the duly elected and acting Secretary of Tenneco Packaging Inc., a Delaware corporation, and the keeper of its corporate records and minutes. The undersigned further hereby certifies that the above and foregoing is a true and correct copy of the Bylaws of said corporation, as in force at the date hereof. WITNESS the hand of the undersigned and the seal of said corporation, this _________ day of _____________. Secretary -19- EX-4.1 6 SPECIMEN STOCK CERTIFICATE 1 EXHIBIT 4.1 NUMBER SHARES - ------------------------------- ------------------------------------ - ------------------------------- ------------------------------------ COMMON STOCK [GRAPHIC] COMMON STOCK PAR VALUE $.01 PAR VALUE $.01 THIS CERTIFICATE IS TRANSFERABLE IN CUSIP 695257 10 5 NEW YORK, NEW YORK SEE REVERSE FOR CERTAIN DEFINITIONS INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE PACTIV CORPORATION - -------------------------------------------------------------------------------- This Certifies that is the owner of - -------------------------------------------------------------------------------- FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF PACTIV Corporation transferable on the books of the Corporation in person or by duty authorized attorney upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held subject to all of the provisions of the Certificate of Incorporation (copies of which are on file with the Transfer Agent), to all of which the holder by acceptance hereof assents. This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar. Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers. DATED: COUNTERSIGNED AND REGISTERED: FIRST CHICAGO TRUST COMPANY OF NEW YORK (NEW YORK, NY) TRANSFER AGENT AND REGISTRAR BY:/s/ JOSEPH F. GRADIFERD [PACTIV SEAL] AUTHORIZED SIGNATURE /s/RICHARD L. WAMBOLD /s/KARL A. STEWART CHIEF EXECUTIVE OFFICER SECRETARY 2 PACTIV CORPORATION The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -as tenant in common UNIF GIFT MIN ACT- Custodian TEN ENT -as tenants by the entireties ------ ------- JT TEN -as joint tenants with right of (Cust) (Minor) survivorship and not as tenants under Uniform Gifts to Minors in common Act ---------------- (State) Additional abbreviations may also be used though not in the above list. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS, THE DESIGNATIONS, POWERS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF OF THE CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. SUCH REQUEST MAY BE MADE TO THE CORPORATION OR THE TRANSFER AGENT. For value received, hereby sell, assign and transfer unto ----------------- PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ---------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------- Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint ---------------------------------------------- - -------------------------------------------------------------------------------- Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises. Dated ----------------------------- . --------------------------------------------- This certificate also evidences and entitles the holder hereof to certain rights as set forth in a Qualified Offer Plan Rights Agreement between PACTIV Corporation (the "Company") and First Chicago Trust Company of New York, as Rights Agent, dated as of November 4, 1999, and as amended from time to time (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate The Company will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, as set forth in the Rights Agreement, Rights owned by or transferred to any Person who is or becomes an Acquiring Person (as defined in the Rights Agreement) and certain transferees thereof will become null and void and will no longer be transferable. NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER. EX-4.2 7 QUALIFIED OFFER PLAN RIGHTS AGREEMENT 1 EXHIBIT 4.2 ---------- PACTIV CORPORATION AND FIRST CHICAGO TRUST COMPANY OF NEW YORK, AS RIGHTS AGENT ---------- QUALIFIED OFFER PLAN RIGHTS AGREEMENT DATED AS OF NOVEMBER 4, 1999 ---------- 2 TABLE OF CONTENTS
PAGE ---- Section 1. CERTAIN DEFINITIONS.......................................... 1 SECTION 2. APPOINTMENT OF RIGHTS AGENT.................................. 8 SECTION 3. ISSUE OF RIGHT CERTIFICATES.................................. 8 SECTION 4. FORM OF RIGHT CERTIFICATES................................... 9 SECTION 5. COUNTERSIGNATURE AND REGISTRATION............................ 10 SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES................................................. 9 SECTION 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE OF RIGHTS....................................................... 10 SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES........... 10 SECTION 9. AVAILABILITY OF SHARES OF PREFERRED STOCK.................... 11 SECTION 10. PREFERRED STOCK RECORD DATE.................................. 13 SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES AND NUMBER OF RIGHTS....................................................... 14 SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES....................................................... 21 SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER................................................ 21 SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES...................... 25 SECTION 15. RIGHTS OF ACTION............................................. 26 SECTION 16. AGREEMENT OF RIGHT HOLDERS................................... 26 SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER............ 26 SECTION 18. CONCERNING THE RIGHTS AGENT.................................. 27 SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.... 27 SECTION 20. DUTIES OF RIGHTS AGENT....................................... 28 SECTION 21. CHANGE OF RIGHTS AGENT....................................... 30 SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES........................... 30 SECTION 23. REDEMPTION................................................... 31 SECTION 24. EXCHANGE..................................................... 31 SECTION 25. NOTICE OF CERTAIN EVENTS..................................... 32 SECTION 26. NOTICES...................................................... 33 SECTION 27. SUPPLEMENTS AND AMENDMENTS................................... 33 SECTION 28. SUCCESSORS................................................... 34 SECTION 29. BENEFITS OF THIS AGREEMENT................................... 34 SECTION 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS......... 34 SECTION 31. SEVERABILITY................................................. 35 SECTION 32. GOVERNING LAW................................................ 35 SECTION 33. COUNTERPARTS................................................. 35 SECTION 34. DESCRIPTIVE HEADINGS......................................... 35
2 3 QUALIFIED OFFER PLAN RIGHTS AGREEMENT Qualified Offer Plan Rights Agreement, dated as of November 4, 1999 ("Agreement"), between Pactiv Corporation, a Delaware corporation (the "Company"), and First Chicago Trust Company of New York, as Rights Agent (the "Rights Agent"). The Board of Directors of the Company has authorized and declared a dividend of one preferred share purchase right (a "Right") for each share of Common Stock (as hereinafter defined) of the Company outstanding immediately prior to the Distribution (as defined in the Distribution Agreement by and between Tenneco (as hereinafter defined) and the Company) (the "Record Date"), each Right representing the right to purchase one one-thousandth (subject to adjustment) of a share of Preferred Stock (as hereinafter defined), upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each share of Common Stock that shall become outstanding between the Record Date and the earlier of the Distribution Date and the Expiration Date (as such terms are hereinafter defined); provided, however, that Rights may be issued with respect to shares of Common Stock that shall become outstanding after the Distribution Date and prior to the Expiration Date in accordance with Section 22. Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meaning indicated: (a) "Acquiring Person" shall mean any Person (as such term is hereinafter defined) who or which shall be the Beneficial Owner (as such term is hereinafter defined) of 20% or more of the shares of Common Stock then outstanding, but shall not include an Exempt Person (as such term is hereinafter defined) or a Person who becomes the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding pursuant to a Qualified Offer (as such term is hereinafter defined); provided, however, that (i) if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an "Acquiring Person" became the Beneficial Owner of a number of shares of Common Stock such that the Person would otherwise qualify as an "Acquiring Person" inadvertently (including, without limitation, because (A) such Person was unaware that it beneficially owned a percentage of Common Stock that would otherwise cause such Person to be an "Acquiring Person" or (B) such Person was aware of the extent of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and without any intention of changing or influencing control of the Company, then such Person shall not be deemed to be or to have become an "Acquiring Person" for any purposes of this Agreement unless and until such Person shall have failed to divest itself, as soon as practicable (as determined, in good faith, by the Board of Directors of the Company), of Beneficial Ownership of a sufficient number of shares of Common Stock so that such Person would no longer otherwise qualify as an "Acquiring Person"; (ii) if, as of the date hereof or prior to the first public announcement of the adoption of this Agreement, any Person is or becomes the Beneficial Owner of 20% or more of the shares of Common Stock outstanding, such Person shall not be deemed to be 1 4 or to become an "Acquiring Person" unless and until such time as such Person shall, after the first public announcement of the adoption of this Agreement, become the Beneficial Owner of additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), unless, upon becoming the Beneficial Owner of such additional shares of Common Stock, such Person is not then the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding; and (iii) no Person shall become an "Acquiring Person" as the result of an acquisition of shares of Common Stock by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares of Common Stock beneficially owned by such Person to 20% or more of the shares of Common Stock then outstanding, provided, however, that if a Person shall become the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding by reason of such share acquisitions by the Company and shall thereafter become the Beneficial Owner of any additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), then such Person shall be deemed to be an "Acquiring Person" unless upon becoming the Beneficial Owner of such additional shares of Common Stock such Person does not beneficially own 20% or more of the shares of Common Stock then outstanding. For all purposes of this Agreement, any calculation of the number of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d- 3(d)(1)(i) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date hereof. (b) "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date hereof. (c) A Person shall be deemed the "Beneficial Owner" of, shall be deemed to have "Beneficial Ownership" of and shall be deemed to "beneficially own" any securities: (i) which such Person or any of such Person's Affiliates or Associates is deemed to beneficially own, directly or indirectly, within the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on the date hereof; (ii) which such Person or any of such Person's Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, (x) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase, (y) securities which such Person has a right to acquire upon the exercise of Rights at any time prior to the time that any Person becomes an Acquiring Person or (z) securities issuable upon the 2 5 exercise of Rights from and after the time that any Person becomes an Acquiring Person if such Rights were acquired by such Person or any of such Person's Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof ("Original Rights") or pursuant to Section 11(i) or Section 11(n) with respect to an adjustment to Original Rights; or (B) the right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security by reason of such agreement, arrangement or understanding if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and (2) is not also then reportable pursuant to Regulation 13D-G under the Exchange Act (or any comparable or successor regulation); or (iii) which are beneficially owned, directly or indirectly, by any other Person and with respect to which such Person or any of such Person's Affiliates or Associates has any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(c)(ii)(B)) or disposing of such securities of the Company; provided, however, that no Person who is an officer, director or employee of an Exempt Person shall be deemed, solely by reason of such Person's status or authority as such, to be the "Beneficial Owner" of, to have "Beneficial Ownership" of or to "beneficially own" any securities that are "beneficially owned" (as defined in this Section 1(c)), including, without limitation, in a fiduciary capacity, by an Exempt Person or by any other such officer, director or employee of an Exempt Person. (d) "Business Day" shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York or the city in which the principal office of the Rights Agent is located are authorized or obligated by law or executive order to close. (e) "Close of Business" on any given date shall mean 5:00 p.m., New York City time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 p.m., New York City time, on the next succeeding Business Day. (f) "Common Stock" when used with reference to the Company shall mean the Common Stock, presently par value $.01 per share, of the Company. "Common Stock" when used with reference to any Person other than the Company shall mean the common stock (or, in the case of an unincorporated entity, the equivalent equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person. (g) "Common Stock Equivalents" shall have the meaning set forth in Section 11(a)(iii) hereof. (g) "Common Stock Equivalents" shall have the meaning set forth in Section 11(a)(iii) hereof. 3 6 (h) "Current Value" shall have the meaning set forth in Section 11(a)(iii) hereof. (i) "Distribution Date" shall have the meaning set forth in Section 3 hereof. (j) "equivalent preferred shares" shall have the meaning set forth in Section 11(b) hereof. (k) "Exempt Person" shall mean (i) the Company or any Subsidiary (as such term is hereinafter defined) of the Company, in each case including, without limitation, in its fiduciary capacity, or any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity or trustee holding Common Stock for or pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or of any Subsidiary of the Company and (ii) until immediately following the Distribution, the corporation known as of the date hereof as Tenneco Inc., a Delaware corporation ("Tenneco"), or any Subsidiary of Tenneco. (l) "Exchange Ratio" shall have the meaning set forth in Section 24 hereof. (m) "Expiration Date" shall have the meaning set forth in Section 7 hereof. (n) "Flip-In Event" shall have the meaning set forth in Section 11(a)(ii) hereof. (o) "Final Expiration Date" shall have the meaning set forth in Section 7 hereof. (p) "NASDAQ" shall mean The Nasdaq Stock Market. (q) "New York Stock Exchange" shall mean the New York Stock Exchange, Inc. (r) "Person" shall mean any individual, firm, corporation, partnership, limited liability company, trust or other entity, and shall include any successor (by merger or otherwise) to such entity. (s) "Preferred Stock" shall mean the Series A Junior Participating Preferred Stock, par value $.01 per share, of the Company having the rights and preferences set forth in the Form of Certificate of Designation attached to this Agreement as Exhibit A. (t) "Qualified Offer" shall mean an all-cash tender offer for all outstanding shares of Common Stock which meets all of the following requirements: (i) on or prior to the date such offer is commenced within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, such Person: (A) has on hand cash or cash equivalents for the full amount necessary to consummate such offer and has irrevocably committed in writing to the Company to utilize such cash or cash equivalents for purposes of such offer if consummated and to set apart and maintain available such cash or cash equivalents for such purposes until the offer is consummated or withdrawn; or 4 7 (B) has all financing in the full amount necessary to consummate such offer and has: (1) entered into, and provided to the Company certified copies of, definitive financing agreements (including exhibits and related documents) for funds for such offer which, when added to the amount of cash and cash equivalents available, committed in writing, set apart and maintained in the same manner as described in clause (A) above, are in an amount not less than the full amount necessary to consummate such offer, which agreements are with one or more responsible financial institutions or other entities having the necessary financial capacity and ability to provide such funds, and are subject only to customary terms and conditions (which shall in no event include conditions requiring access by such financial institutions to non-public information to be provided by the Company, conditions based on the accuracy of any information concerning the Company, or conditions requiring the Company to make any representations, warranties or covenants in connection with such financing), and (2) provided to the Company copies of all written materials prepared by such Person for such financial institutions in connection with entering into such financing agreements; provided that, "the full amount necessary to consummate such offer" in either clause (A) or (B) above shall be an amount sufficient to pay for all shares of Common Stock outstanding on a fully diluted basis in cash pursuant to the offer and the second-step transaction required by clause (v) below and all related expenses; (ii) after the consummation of such offer, such Person, alone or together with one or more direct or indirect wholly-owned Subsidiaries of such Person, owns (in fact) Common Stock representing eighty-five percent (85%) or more of the then outstanding Common Stock, excluding for purposes of determining the then outstanding Common Stock under this clause (ii) those shares of Common Stock beneficially owned (x) by persons who are directors and also officers of the Company and (y) employee stock plans of the Company in which employee participants do not have the right to determine confidentially whether shares of Common Stock held subject to the plan will be tendered in a tender or exchange offer; (iii) such offer remains open for at least 60 Business Days; provided, however, that (x) if there is any increase in the price of such offer, such offer must remain open for at least an additional 20 Business Days after the last such increase, (y) such offer must remain open for at least 20 Business Days after the date that any bona fide alternative offer is made which, in the opinion of one or more investment banking firms designated by the Company, provides for consideration per share in excess of that provided for in such offer, and (z) such offer must remain open for at least 20 Business Days after the date, if any, on which such Person reduces the per share price offered in accordance with clause (v)(y) below (provided, in the case of each of clauses (x), (y) and (z) above, in no event will such offer have been outstanding for less than 60 Business Days); provided further, however, that such offer need 5 8 not remain open, as a result of this clause (iii), beyond (1) the time which any other offer satisfying the criteria for a Qualified Offer is then required to be kept open under this clause (iii), or (2) the scheduled expiration date, as such date may be extended by public announcement on or prior to the then scheduled expiration date, of any other tender or exchange offer for Common Stock with respect to which the Board of Directors has agreed to redeem the Rights immediately prior to acceptance for payment of Common Stock thereunder (unless such other offer is terminated prior to its expiration without any Common Stock having been purchased thereunder); (iv) such offer is accompanied by a written opinion, in customary form, of a nationally recognized investment banking firm which is addressed to the Company and the holders of Common Stock other than such Person and states that the price to be paid to holders pursuant to the offer is fair from a financial point of view to such holders and includes any written presentation of such firm showing the analysis and range of values underlying such conclusions and such written opinion and any such presentation is updated and provided to the Company within two Business Days prior to the date such offer is consummated; (v) prior to or on the date that such offer is commenced within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, such Person makes an irrevocable written commitment to the Company and, with respect to clause (x) to its stockholders, (x) to consummate a transaction or transactions promptly upon the completion of such offer (and in no event later than five Business Days thereafter), whereby all Common Stock not purchased in such offer will be acquired at the same cash price per share paid in such offer, subject only to the condition that the Board of Directors shall have granted any approvals required to enable such Person to consummate such transaction or transactions following consummation of such offer without obtaining the vote of any other stockholder, (y) that such Person will not make any amendment to the original offer which reduces the per share price offered (other than a reduction to reflect any dividend declared by the Company, other than a regular quarterly dividend, after the commencement of such offer or any material change in the capital structure of the Company initiated by the Company after the commencement of such offer, whether by way of reclassification, recapitalization, reorganization, repurchase or otherwise), changes the form of consideration offered, or reduces the number of shares being sought or which is in any other respect materially adverse to the Company's stockholders, and (z) that neither such Person nor any of its Affiliates or Associates will make any offer for or purchase any equity securities of the Company for a period of one year after the commencement of the original offer if such original offer does not result in the tender of the number of shares of Common Stock required to be purchased pursuant to clause (ii) above, unless another tender offer by another party for all outstanding Common Stock is commenced that (a) constitutes a Qualified Offer (in which event, any new offer by such Person or of any Affiliates or Associates must be at a price no less than that provided for in such original offer) or (b) is approved by the Board of Directors of the Company (in which event, any new offer by such Person or of any of its Affiliates or Associates must be at a price no less than that provided for in such approved offer); and 6 9 (vi) in addition to each of the requirements set forth above, such offer is not subject to any financing, funding or similar condition, nor any condition relating to completion of or satisfaction with any due diligence or similar investigation, and, subject to the foregoing, otherwise provides for usual and customary terms and conditions. (u) "Principal Party" shall have the meaning set forth in Section 13(b) hereof. (v) "Redemption Date" shall have the meaning set forth in Section 7 hereof. (w) "Redemption Price" shall have the meaning set forth in Section 23 hereof. (x) "Right Certificate" shall have the meaning set forth in Section 3 hereof. (y) "Securities Act" shall mean the Securities Act of 1933, as amended. (z) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in Section 11(a)(iii) hereof. (aa) "Spread" shall have the meaning set forth in Section 11(a)(iii) hereof. (bb) "Stock Acquisition Date" shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such, or such earlier date as a majority of the Board of Directors shall become aware of the existence of an Acquiring Person. (cc) "Subsidiary" of any Person shall mean any corporation or other entity of which securities or other ownership interests having ordinary voting power sufficient to elect a majority of the board of directors or other persons performing similar functions are beneficially owned, directly or indirectly, by such Person, and any corporation or other entity that is otherwise controlled by such Person, and a "wholly-owned Subsidiary" of any Person shall mean any corporation or other entity of which all the securities or other ownership interests are beneficially owned by such Person. (dd) "Substitution Period" shall have the meaning set forth in Section 11(a)(iii) hereof. (ee) "Summary of Rights" shall have the meaning set forth in Section 3 hereof. (ff) "Trading Day" shall have the meaning set forth in Section 11(d)(i) hereof. Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date be the holders of Common Stock) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable. Section 3. Issue of Right Certificates. 7 10 (a) Until the Close of Business on the earlier of (i) the tenth day after the Stock Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than an Exempt Person) of, or of the first public announcement of the intention of such Person (other than an Exempt Person) to commence, a tender or exchange offer (other than a Qualified Offer) the consummation of which would result in any Person (other than an Exempt Person) becoming the Beneficial Owner of shares of Common Stock aggregating 20% or more of the Common Stock then outstanding (the earlier of such dates being herein referred to as the "Distribution Date", provided, however, that if either of such dates occurs after the date of this Agreement and on or prior to the Record Date, then the Distribution Date shall be the Record Date), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Stock registered in the names of the holders thereof and not by separate Right Certificates, and (y) the Rights will be transferable only in connection with the transfer of Common Stock. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign and the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Stock as of the close of business on the Distribution Date (other than any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a "Right Certificate"), evidencing one Right (subject to adjustment as provided herein) for each share of Common Stock so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates. (b) On the Record Date, or as soon as practicable thereafter, the Company will send a copy of a Summary of Rights to Purchase Shares of Preferred Stock, in substantially the form of Exhibit C hereto (the "Summary of Rights") to each record holder of Common Stock as of the Record Date (other than any Acquiring Person or any Associate or Affiliate of any Acquiring Person), at the address of such holder shown on the records of the Company. With respect to certificates for Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with the Summary of Rights. Until the Distribution Date (or, if earlier, the Expiration Date), the surrender for transfer of any certificate for Common Stock outstanding on the Record Date, with or without a copy of the Summary of Rights, shall also constitute the transfer of the Rights associated with the Common Stock represented thereby. (c) Rights shall be issued in respect of all shares of Common Stock issued or disposed of (including, without limitation, upon disposition of Common Stock out of treasury stock or issuance or reissuance of Common Stock out of authorized but unissued shares) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date, or in certain circumstances provided in Section 22 hereof, after the Distribution Date. Certificates issued for Common Stock (including, without limitation, upon transfer of outstanding Common Stock, disposition of Common Stock out of treasury stock or issuance or reissuance of Common Stock out of authorized but unissued shares) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend: 8 11 This certificate also evidences and entitles the holder hereof to certain rights as set forth in a Qualified Offer Plan Rights Agreement between Pactiv Corporation (the "Company") and First Chicago Trust Company of New York, as Rights Agent, dated as of November 4, 1999 and as amended from time to time (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, as set forth in the Rights Agreement, Rights owned by or transferred to any Person who is or becomes an Acquiring Person (as defined in the Rights Agreement) and certain transferees thereof will become null and void and will no longer be transferable. With respect to such certificates containing the foregoing legend, until the Distribution Date the Rights associated with the Common Stock represented by such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate, except as otherwise provided herein, shall also constitute the transfer of the Rights associated with the Common Stock represented thereby. In the event that the Company purchases or otherwise acquires any Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such Common Stock shall be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Stock which are no longer outstanding. Notwithstanding this paragraph (c), the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights. Section 4. Form of Right Certificates. The Right Certificates (and the forms of election to purchase shares and of assignment to be printed on the reverse thereof) shall be substantially in the form set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or interdealer quotation system on which the Rights may from time to time be listed or quoted, or to conform to usage. Subject to the provisions of this Agreement, the Right Certificates shall entitle the holders thereof to purchase such number of one one-thousandths of a share of Preferred Stock as shall be set forth therein at the price per one one-thousandth of a share of Preferred Stock set forth therein (the "Purchase Price"), but the number of such one one-thousandths of a share of Preferred Stock and the Purchase Price shall be subject to adjustment as provided herein. Section 5. Countersignature and Registration. (a) The Right Certificates shall be executed on behalf of the Company by the Chairman and Chief Executive Officer of the Company, either manually or by facsimile signature, shall have affixed thereto the Company's seal or a facsimile thereof and shall be attested by the Secretary of the Company, either manually or by facsimile signature. The Right Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless countersigned. In 9 12 case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any Person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement any such Person was not such an officer. (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at an office or agency designated for such purpose, books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates. Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) Subject to the provisions of this Agreement, at any time after the Distribution Date and prior to the Expiration Date, any Right Certificate or Right Certificates may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-thousandths of a share of Preferred Stock as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the office or agency of the Rights Agent designated for such purpose. Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. (b) Subject to the provisions of this Agreement, at any time after the Distribution Date and prior to the Expiration Date, upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company's request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights. 10 13 (a) Except as otherwise provided herein, the Rights shall become exercisable on the Distribution Date, and thereafter the registered holder of any Right Certificate may, subject to Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced thereby in whole or in part upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the office or agency of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of one one-thousandths of a share of Preferred Stock (or other securities, cash or other assets, as the case may be) as to which the Rights are exercised, at any time which is both after the Distribution Date and prior to the time (the "Expiration Date") that is the earliest of (i) the Close of Business on November 4, 2009 (the "Final Expiration Date"), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the "Redemption Date") or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof. (b) The Purchase Price shall be initially $60.00 for each one one-thousandth of a share of Preferred Stock purchasable upon the exercise of a Right. The Purchase Price and the number of one one-thousandths of a share of Preferred Stock or other securities or property to be acquired upon exercise of a Right shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance with paragraph (c) of this Section 7. (c) Except as otherwise provided herein, upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by payment of the aggregate Purchase Price for the shares of Preferred Stock to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof, in cash or by certified check, cashier's check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Stock, or make available if the Rights Agent is the transfer agent for the Preferred Stock, certificates for the number of shares of Preferred Stock to be purchased, and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) requisition from a depositary agent appointed by the Company depositary receipts representing interests in such number of one one-thousandths of a share of Preferred Stock as are to be purchased (in which case certificates for the Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs any such depositary agent to comply with such request, (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof, (iii) promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate. (d) Except as otherwise provided herein, in case the registered holder of any Right Certificate shall exercise less than all of the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the exercisable Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to his duly authorized assigns, subject to the provisions of Section 14 hereof. 11 14 (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder of Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6 hereof or this Section 7 unless such registered holder shall have (i) completed and signed the certificate contained in the form of assignment or form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such transfer or exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof as the Company shall reasonably request. Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company. Section 9. Availability of Shares of Preferred Stock. (a) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred Stock or any shares of Preferred Stock held in its treasury, the number of shares of Preferred Stock that will be sufficient to permit the exercise in full of all outstanding Rights. (b) So long as the shares of Preferred Stock issuable upon the exercise of Rights may be listed or admitted to trading on any national securities exchange, or quoted on NASDAQ, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted to trading on such exchange, or quoted on NASDAQ, upon official notice of issuance upon such exercise. (c) From and after such time as the Rights become exercisable, the Company shall use its best efforts, if then necessary to permit the issuance of shares of Preferred Stock upon the exercise of Rights, to register and qualify such shares of Preferred Stock under the Securities Act and any applicable state securities or "Blue Sky" laws (to the extent exemptions therefrom are not available), cause such registration statement and qualifications to become effective as soon as possible after such filing and keep such registration and qualifications effective until the earlier of the date as of which the Rights are no longer exercisable for such securities and the Expiration Date. The Company may temporarily suspend, for a period of time not to exceed 90 days, the exercisability of the Rights in order to prepare and file a registration statement under the Securities Act and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite 12 15 qualification in such jurisdiction shall have been obtained and until a registration statement under the Securities Act (if required) shall have been declared effective. (d) The Company covenants and agrees that it will take all such action as may be necessary to ensure that all shares of Preferred Stock delivered upon exercise of Rights shall, at the time of delivery of the certificates therefor (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares. (e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any shares of Preferred Stock upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Stock in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or deliver any certificates or depositary receipts for Preferred Stock upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by that holder of such Right Certificate at the time of surrender) or until it has been established to the Company's reasonable satisfaction that no such tax is due. Section 10. Preferred Stock Record Date. Each Person in whose name any certificate for Preferred Stock is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the shares of Preferred Stock represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred Stock transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred Stock for which the Rights shall be exercisable, including, without limitation, the right to vote or to receive dividends or other distributions, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. Section 11. Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights. The Purchase Price, the number of shares of Preferred Stock or other securities or property purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. (a) (i) In the event the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the number and kind of 13 16 shares of capital stock issuable upon exercise of a Right as of the record date for such dividend or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. (ii) Subject to Section 24 of this Agreement, in the event any Person becomes an Acquiring Person (the first occurrence of such event being referred to hereinafter as the "Flip-In Event"), then (A) the Purchase Price shall be adjusted to be the Purchase Price in effect immediately prior to the Flip-In Event multiplied by the number of one one- thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to such Flip-In Event, whether or not such Right was then exercisable, and (B) each holder of a Right, except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the right to receive, upon exercise thereof at a price equal to the Purchase Price (as so adjusted), in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of Common Stock as shall equal the result obtained by dividing the Purchase Price (as so adjusted) by 50% of the current per share market price of the Common Stock (determined pursuant to Section 11(d) hereof) on the date of such Flip-In Event; provided, however, that the Purchase Price (as so adjusted) and the number of shares of Common Stock so receivable upon exercise of a Right shall, following the Flip-In Event, be subject to further adjustment as appropriate in accordance with Section 11(f) hereof. Notwithstanding anything in this Agreement to the contrary, however, from and after the Flip-In Event, any Rights that are beneficially owned by (x) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (y) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the Flip-In Event or (z) a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or concurrently with the Flip-In Event pursuant to either (I) a transfer from the Acquiring Person to holders of its equity securities or to any Person with whom it has any continuing agreement, arrangement or understanding regarding the transferred Rights or (II) a transfer which the Board of Directors has determined is part of a plan, arrangement or understanding which has the purpose or effect of avoiding the provisions of this paragraph, and subsequent transferees of such Persons, shall be void without any further action and any holder of such Rights shall thereafter have no rights whatsoever with respect to such Rights under any provision of this Agreement. The Company shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of Right Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. From and after the Flip-In Event, no Right Certificate shall be issued pursuant to Section 3 or Section 6 hereof that represents Rights that are or have become void pursuant to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent that represents Rights that are or have become 14 17 void pursuant to the provisions of this paragraph shall be canceled. From and after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not been exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in accordance with Section 13 and not pursuant to this Section 11(a)(ii). (iii) The Company may at its option substitute for a share of Common Stock issuable upon the exercise of Rights in accordance with the foregoing subparagraph (ii) a number of shares of Preferred Stock or fraction thereof such that the current per share market price of one share of Preferred Stock multiplied by such number or fraction is equal to the current per share market price of one share of Common Stock. In the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii), the Board of Directors shall, to the extent permitted by applicable law and any material agreements then in effect to which the Company is a party (A) determine the excess (such excess, the "Spread") of (1) the value of the shares of Common Stock issuable upon the exercise of a Right in accordance with the foregoing subparagraph (ii) (the "Current Value") over (2) the Purchase Price (as adjusted in accordance with the foregoing subparagraph (ii)), and (B) with respect to each Right (other than Rights which have become void pursuant to the foregoing subparagraph (ii)), make adequate provision to substitute for the shares of Common Stock issuable in accordance with the foregoing subparagraph (ii) upon exercise of the Right and payment of the Purchase Price (as adjusted in accordance therewith), (1) cash, (2) a reduction in such Purchase Price, (3) shares of Preferred Stock or other equity securities of the Company (including, without limitation, shares or fractions of shares of preferred stock which, by virtue of having dividend, voting and liquidation rights substantially comparable to those of the shares of Common Stock, are deemed in good faith by the Board of Directors to have substantially the same value as the shares of Common Stock (such shares of Preferred Stock and shares or fractions of shares of preferred stock are hereinafter referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having a value which, when added to the value of the shares of Common Stock issued upon exercise of such Right, shall have an aggregate value equal to the Current Value (less the amount of any reduction in such Purchase Price), where such aggregate value has been determined by the Board of Directors upon the advice of a nationally recognized investment banking firm selected in good faith by the Board of Directors; provided, however, that if the Company shall not make adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the Flip-In Event (the date of the Flip-In Event being the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, to the extent permitted by applicable law and any material agreements then in effect to which the Company is a party, upon the surrender for exercise of a Right and without requiring payment of such Purchase Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If, upon the occurrence of the Flip- In Event, the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, then, if the Board of Directors so elects, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the 15 18 Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the second and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this Section 11(a)(iii) hereof, that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such second sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the shares of Common Stock shall be the current per share market price (as determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share or fractional value of any "Common Stock Equivalent" shall be deemed to equal the current per share market price of the Common Stock. The Board of Directors of the Company may, but shall not be required to, establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii). (b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same rights, privileges and preferences as the Preferred Stock ("equivalent preferred shares")) or securities convertible into Preferred Stock or equivalent preferred shares at a price per share of Preferred Stock or equivalent preferred shares (or having a conversion price per share, if a security convertible into shares of Preferred Stock or equivalent preferred shares) less than the then current per share market price of the Preferred Stock (determined pursuant to Section 11(d) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock and equivalent preferred shares outstanding on such record date plus the number of shares of Preferred Stock and equivalent preferred shares which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price, and the denominator of which shall be the number of shares of Preferred Stock and equivalent preferred shares outstanding on such record date plus the number of additional shares of Preferred Stock and/or equivalent preferred shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent. Shares of Preferred Stock and equivalent preferred shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively 16 19 whenever such a record date is fixed; and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. (c) In case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price of the Preferred Stock (determined pursuant to Section 11(d) hereof) on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company whose determination shall be described in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one share of Preferred Stock, and the denominator of which shall be such current per share market price (determined pursuant to Section 11(d) hereof) of the Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. (d) (i) Except as otherwise provided herein, for the purpose of any computation hereunder, the "current per share market price" of any security (a "Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any subdivision, combination or reclassification of such Security, and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported by the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter 17 20 market, as reported by NASDAQ or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. (ii) For the purpose of any computation hereunder, if the Preferred Stock is publicly traded, the "current per share market price" of the Preferred Stock shall be determined in accordance with the method set forth in Section 11(d)(i). If the Preferred Stock is not publicly traded but the Common Stock is publicly traded, the "current per share market price" of the Preferred Stock shall be conclusively deemed to be the current per share market price of the Common Stock as determined pursuant to Section 11(d)(i) multiplied by the then applicable Adjustment Number (as defined in and determined in accordance with the Certificate of Designation for the Preferred Stock). If neither the Common Stock nor the Preferred Stock is publicly traded, "current per share market price" shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent. (e) No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one hundred-thousandth of a share of Preferred Stock or one-hundredth of a share of Common Stock or other share or security as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment or (ii) the Expiration Date. (f) If as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than the Preferred Stock, thereafter the Purchase Price and the number of such other shares so receivable upon exercise of a Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), 11(b), 11(c), 11(e), 11(h), 11(i) and 11(m) hereof, as applicable, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares. (g) All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-thousandths of a share of Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and 18 21 11(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-thousandths of a share of Preferred Stock (calculated to the nearest one hundred-thousandth of a share of Preferred Stock) obtained by (i) multiplying (x) the number of one one-thousandths of a share purchasable upon the exercise of a Right immediately prior to such adjustment by (y) the Purchase Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment. (i) The Company may elect on or after the date of any adjustment of the Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust the number of Rights, in substitution for any adjustment in the number of one one-thousandths of a share of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one-hundredth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. Such record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company may, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement. (j) Irrespective of any adjustment or change in the Purchase Price or the number of one one- thousandths of a share of Preferred Stock issuable upon the exercise of a Right, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-thousandths of a share of Preferred Stock which were expressed in the initial Right Certificates issued hereunder. (k) Before taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the fraction of Preferred Stock or other shares of capital stock issuable upon exercise of a Right, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable shares of Preferred Stock or other such shares at such adjusted Purchase Price. 19 22 (l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event issuing to the holder of any Right exercised after such record date the Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment. (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such adjustments in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision of the Preferred Stock, issuance wholly for cash of any shares of Preferred Stock at less than the current market price, issuance wholly for cash of Preferred Stock or securities which by their terms are convertible into or exchangeable for Preferred Stock, dividends on Preferred Stock payable in shares of Preferred Stock or issuance of rights, options or warrants referred to hereinabove in Section 11(b), hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders. (n) Anything in this Agreement to the contrary notwithstanding, in the event that at any time after the date of this Agreement and prior to the Distribution Date, the Company shall (i) declare and pay any dividend on the Common Stock payable in Common Stock or (ii) effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of a dividend payable in Common Stock) into a greater or lesser number of shares of Common Stock, then, in each such case, the number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter, shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common Stock following any such event shall equal the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of such event. (o) The Company agrees that, after the earlier of the Distribution Date or the Stock Acquisition Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or eliminate the benefits intended to be afforded by the Rights. Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment, and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Stock and the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof (if so required under Section 25 hereof). The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment 20 23 therein contained and shall not be deemed to have knowledge of any such adjustment unless and until it shall have received such certificate. Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. (a) In the event, directly or indirectly, at any time after the Flip-In Event (i) the Company shall consolidate with or shall merge into any other Person, (ii) any Person shall merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or of the Company) or cash or any other property, or (iii) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person (other than the Company or one or more wholly-owned Subsidiaries of the Company), then upon the first occurrence of such event, proper provision shall be made so that: (A) each holder of a Right (other than Rights which have become void pursuant to Section 11(a)(ii) hereof) shall thereafter have the right to receive, upon the exercise thereof at the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof), in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock or Common Stock of the Company, such number of validly authorized and issued, fully paid, non-assessable and freely tradeable shares of Common Stock of the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall equal the result obtained by dividing the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof) by 50% of the current per share market price of the Common Stock of such Principal Party (determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer; provided, however, that the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof) and the number of shares of Common Stock of such Principal Party so receivable upon exercise of a Right shall be subject to further adjustment as appropriate in accordance with Section 11(f) hereof to reflect any events occurring in respect of the Common Stock of such Principal Party after the occurrence of such consolidation, merger, sale or transfer; (B) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (C) the term "Company" shall thereafter be deemed to refer to such Principal Party; and (D) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of its shares of Common Stock in accordance with Section 9 hereof) in connection with such consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares of its Common Stock thereafter deliverable upon the exercise of the Rights; provided that, upon the subsequent occurrence of any consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect of such Principal Party, each holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided in this Section 13(a), such cash, shares, rights, warrants and other property which such holder would have been entitled to receive had such holder, at the time of such transaction, owned the Common Stock of the Principal Party receivable upon the exercise of a Right pursuant to this Section 13(a), and such Principal Party shall take such steps (including, but not limited to, reservation of shares of stock) as may be necessary to permit the 21 24 subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other property. (b) "Principal Party" shall mean: (i) in the case of any transaction described in (i) or (ii) of the first sentence of Section 13(a) hereof: (A) the Person that is the issuer of the securities into which the shares of Common Stock are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer the shares of Common Stock of which have the greatest aggregate market value of shares outstanding, or (B) if no securities are so issued, (x) the Person that is the other party to the merger, if such Person survives said merger, or, if there is more than one such Person, the Person the shares of Common Stock of which have the greatest aggregate market value of shares outstanding or (y) if the Person that is the other party to the merger does not survive the merger, the Person that does survive the merger (including the Company if it survives) or (z) the Person resulting from the consolidation; and (ii) in the case of any transaction described in (iii) of the first sentence of Section 13(a) hereof, the Person that is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each Person that is a party to such transaction or transactions receives the same portion of the assets or earning power so transferred or if the Person receiving the greatest portion of the assets or earning power cannot be determined, whichever of such Persons is the issuer of Common Stock having the greatest aggregate market value of shares outstanding; provided, however, that in any such case described in the foregoing clause (b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, the term "Principal Party" shall refer to such other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stock of all of which is and has been so registered, the term "Principal Party" shall refer to whichever of such Persons is the issuer of Common Stock having the greatest aggregate market value of shares outstanding, or (3) if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in clauses (1) and (2) above shall apply to each of the owners having an interest in the venture as if the Person owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in each such case shall bear the obligations set forth in this Section 13 in the same ratio as its interest in such Person bears to the total of such interests. (c) The Company shall not consummate any consolidation, merger, sale or transfer referred to in Section 13(a) hereof unless prior thereto the Company and the Principal Party involved therein shall have executed and delivered to the Rights Agent an agreement confirming that the requirements of Sections 13(a) and (b) hereof shall promptly be performed in accordance with their terms and that such consolidation, merger, sale or transfer of assets shall not result in a default by the Principal Party under this Agreement as the same shall have been assumed by the Principal Party pursuant to 22 25 Sections 13(a) and (b) hereof and providing that, as soon as practicable after executing such agreement pursuant to this Section 13, the Principal Party will: (i) prepare and file a registration statement under the Securities Act, if necessary, with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, use its best efforts to cause such registration statement to become effective as soon as practicable after such filing and use its best efforts to cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date and similarly comply with applicable state securities laws; (ii) use its best efforts, if the Common Stock of the Principal Party shall be listed or admitted to trading on the New York Stock Exchange or on another national securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights on the New York Stock Exchange or such securities exchange, or, if the Common Stock of the Principal Party shall not be listed or admitted to trading on the New York Stock Exchange or a national securities exchange, to cause the Rights and the securities receivable upon exercise of the Rights to be authorized for quotation on NASDAQ or on such other system then in use; (iii) deliver to holders of the Rights historical financial statements for the Principal Party which comply in all respects with the requirements for registration on Form 10 (or any successor form) under the Exchange Act; and (iv) obtain waivers of any rights of first refusal or preemptive rights in respect of the Common Stock of the Principal Party subject to purchase upon exercise of outstanding Rights. (d) In case the Principal Party has provision in any of its authorized securities or in its certificate of incorporation or by-laws or other instrument governing its affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders of Rights pursuant to this Section 13), in connection with, or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of Common Stock or Common Stock Equivalents of such Principal Party at less than the then current market price per share thereof (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Stock or Common Stock Equivalents of such Principal Party at less than such then current market price, or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the Common Stock of such Principal Party pursuant to the provisions of Section 13, then, in such event, the Company hereby agrees with each holder of Rights that it shall not consummate any such transaction unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of such Principal Party shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection with, or as a consequence of, the consummation of the proposed transaction. 23 26 (e) The Company covenants and agrees that it shall not, at any time after the Flip-In Event, enter into any transaction of the type described in clauses (i) through (iii) of Section 13(a) hereof if (i) at the time of or immediately after such consolidation, merger, sale, transfer or other transaction there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (ii) prior to, simultaneously with or immediately after such consolidation, merger, sale, transfer or other transaction, the stockholders of the Person who constitutes, or would constitute, the Principal Party for purposes of Section 13(b) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates or Associates or (iii) the form or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights. (f) The provisions of Sections 13(a), 13(b), 13(c), 13(d) and 13(e) hereof shall not apply to a transaction which (i) is consummated following completion of a Qualified Offer and (ii) complies with and is effected in accordance with clause (v)(x) of Section 1(t) hereof. Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights (except prior to the Distribution Date in accordance with Section 11(n) hereof). In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of Directors of the Company shall be used. (b) The Company shall not be required to issue fractions of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) upon the exercise or exchange of Rights. Interests in fractions of Preferred Stock in integral multiples of one one-thousandth of a share of Preferred Stock may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary 24 27 selected by it; provided, that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Stock represented by such depositary receipts. In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-thousandth of a share of Preferred Stock, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised or exchanged as herein provided an amount in cash equal to the same fraction of the current market value of a whole share of Preferred Stock (as determined in accordance with Section 14(a) hereof) for the Trading Day immediately prior to the date of such exercise or exchange. (c) The Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock upon the exercise or exchange of Rights. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional shares of Common Stock would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole share of Common Stock (as determined in accordance with Section 14(a) hereof) for the Trading Day immediately prior to the date of such exercise or exchange. (d) The holder of a Right by the acceptance of the Right expressly waives his right to receive any fractional Rights or any fractional shares upon exercise or exchange of a Right (except as provided above). Section 15. Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Stock), on his own behalf and for his own benefit, may enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Right Certificate (or, prior to the Distribution Date, such Common Stock) in the manner provided therein and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of, the obligations of any Person subject to this Agreement. Section 16. Agreement of Right Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: (a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Stock; (b) after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office or agency of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer; and 25 28 (c) the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary. Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise or exchange of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in this Agreement), or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by such Right Certificate shall have been exercised or exchanged in accordance with the provisions hereof. Section 18. Concerning the Rights Agent. (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability or expense, incurred without negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly. (b) The Rights Agent shall be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its administration of this Agreement in reliance upon any Right Certificate or certificate for the Preferred Stock or Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the stock transfer or corporate trust powers of the Rights Agent or any 26 29 successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided, that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement. (b) In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement. Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman and Chief Executive Officer and the Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. (c) The Rights Agent shall be liable hereunder to the Company and any other Person only for its own negligence, bad faith or willful misconduct. (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. 27 30 (e) The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any change or adjustment in the terms of the Rights provided for in Sections 3, 11, 13, 23 and 24, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt of a certificate furnished pursuant to Section 12, describing such change or adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Preferred Stock or other securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any shares of Preferred Stock or other securities will, when issued, be validly authorized and issued, fully paid and nonassessable. (f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any person reasonably believed by the Rights Agent to be one of the Chairman and Chief Executive Officer or the Secretary of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent under this Agreement and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent shall not be liable for any action taken by, or omission of, the Rights Agent in accordance with a proposal included in any such application on or after the date specified in such application (which date shall not be less than five Business Days after the date any officer of the Company actually receives such application unless any such officer shall have consented in writing to an earlier date) unless, prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall have received written instructions in response to such application specifying the action to be taken or omitted. (h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity. (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights 28 31 Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof. (j) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has not been completed to certify the holder is not an Acquiring Person (or an Affiliate or Associate thereof) or a transferee thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company. Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days' notice in writing mailed to the Company and to each transfer agent of the Common Stock or Preferred Stock by registered or certified mail, and, following the Distribution Date, to the holders of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock or Preferred Stock by registered or certified mail, and, following the Distribution Date, to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or the laws of any state of the United States or the District of Columbia, in good standing, having an office in the State of Illinois, the State of New York or the State of New Jersey, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock or Preferred Stock, and, following the Distribution Date, mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 29 32 Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such forms as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of Common Stock following the Distribution Date and prior to the Expiration Date, the Company may with respect to shares of Common Stock so issued or sold pursuant to (i) the exercise of stock options, (ii) under any employee plan or arrangement, (iii) upon the exercise, conversion or exchange of securities, notes or debentures issued by the Company or (iv) a contractual obligation of the Company, in each case existing prior to the Distribution Date, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale. Section 23. Redemption. (a) The Board of Directors of the Company may, at any time prior to the Flip-In Event, redeem all but not less than all the then outstanding Rights at a redemption price of $.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring in respect of the Common Stock after the date hereof (the redemption price being hereinafter referred to as the "Redemption Price"). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. The Redemption Price shall be payable, at the option of the Company, in cash, shares of Common Stock, or such other form of consideration as the Board of Directors shall determine. (b) Immediately upon the action of the Board of Directors ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at such later time as the Board of Directors may establish for the effectiveness of such redemption), and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors ordering the redemption of the Rights (or such later time as the Board of Directors may establish for the effectiveness of such redemption), the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption shall state the method by which the payment of the Redemption Price will be made. Section 24. Exchange. (a) The Board of Directors of the Company may, at its option, at any time after the Flip-In Event, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring in respect of the Common Stock after 30 33 the date hereof (such amount per Right being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be empowered to effect such exchange at any time after an Acquiring Person shall have become the Beneficial Owner of shares of Common Stock aggregating 50% or more of the shares of Common Stock then outstanding. From and after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not been exchanged pursuant to this Section 24(a) shall thereafter be exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section 24(a). The exchange of the Rights by the Board of Directors may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. (b) Immediately upon the effectiveness of the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company shall promptly mail a notice of any such exchange to all of the holders of the Rights so exchanged at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the shares of Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights. (c) The Company may at its option substitute, and, in the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit an exchange of Rights for Common Stock as contemplated in accordance with this Section 24, the Company shall substitute to the extent of such insufficiency, for each share of Common Stock that would otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or fraction thereof (or equivalent preferred shares, as such term is defined in Section 11(b)) such that the current per share market price (determined pursuant to Section 11(d) hereof) of one share of Preferred Stock (or equivalent preferred share) multiplied by such number or fraction is equal to the current per share market price of one share of Common Stock (determined pursuant to Section 11(d) hereof) as of the date of such exchange. Section 25. Notice of Certain Events. (a) In case the Company shall at any time after the earlier of the Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend payable in stock of any class to the holders of its Preferred Stock or to make any other distribution to the holders of its Preferred Stock (other than a regular quarterly cash dividend), (ii) to offer to the holders of its Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision or combination of outstanding 31 34 Preferred Stock), (iv) to effect the liquidation, dissolution or winding up of the Company, or (v) to pay any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of dividends in Common Stock), then, in each such case, the Company shall give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on which such liquidation, dissolution or winding up is to take place and the date of participation therein by the holders of the Common Stock and/or Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the record date for determining holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Stock and/or Preferred Stock, whichever shall be the earlier. (b) In case any event described in Section 11(a)(ii) or Section 13 shall occur then the Company shall as soon as practicable thereafter give to each holder of a Right Certificate (or if occurring prior to the Distribution Date, the holders of the Common Stock) in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) and Section 13 hereof. Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: Pactiv Corporation 1900 West Field Court Lake Forest, IL 60045 Attention: Corporate Secretary Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows: First Chicago Trust Company of New York P.O. Box 2500 Jersey City, New Jersey 07303-2500 Attention: Chairman and Chief Executive Officer Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. 32 35 Section 27. Supplements and Amendments. Except as provided in the penultimate sentence of this Section 27, for so long as the Rights are then redeemable, the Company may in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or amend any provision of this Agreement in any respect without the approval of any holders of the Rights. At any time when the Rights are no longer redeemable, except as provided in the penultimate sentence of this Section 27, the Company may, and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights, provided that no such supplement or amendment may (a) adversely affect the interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), (b) cause this Agreement again to become amendable other than in accordance with this sentence or (c) cause the Rights again to become redeemable. Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment shall be made which changes the Redemption Price. Upon the delivery of a certificate from an appropriate officer of the Company which states that the supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment, provided that any supplement or amendment that does not amend Sections 18, 19, 20 or 21 hereof in a manner adverse to the Rights Agent shall become effective immediately upon execution by the Company, whether or not also executed by the Rights Agent. Section 28. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. Section 29. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock). Section 30. Determinations and Actions by the Board of Directors. (a) The Board of Directors of the Company shall have the exclusive power and authority to administer this Agreement and to exercise the rights and powers specifically granted to the Board of Directors of the Company or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations deemed necessary or advisable for the administration of this Agreement (including, without limitation, a determination whether: to exchange the outstanding Rights for Common Stock pursuant to Section 24; an offer is a Qualified Offer; to redeem or not redeem the Rights; or to amend or not to amend this Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) that are done or made by the Board of Directors of the Company in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as such, and all other parties, and (y) not subject the Board of Directors to any liability to the holders of the Rights. 33 36 (b) Nothing contained in this Agreement shall be deemed to be in derogation of the obligation of the Board of Directors of the Company to exercise its fiduciary duty. Without limiting the foregoing, nothing contained herein shall be construed to suggest or imply that the Board of Directors shall not be entitled to reject any Qualified Offer or any other tender offer or other acquisition proposal, or to recommend that holders of Common Stock reject any Qualified Offer or any other tender offer or other acquisition proposal, or to take any other action (including, without limitation, the commencement, prosecution, defense or settlement of any litigation and the submission of additional or alternative offers or other proposals) with respect to any Qualified Offer or any other tender offer or other acquisition proposal that the Board of Directors believes is necessary or appropriate in the exercise of such fiduciary duty. Section 31. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Section 32. Governing Law. This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. Section 33. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Section 34. Descriptive Headings. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the day and year first above written. PACTIV CORPORATION By: /s/ Richard L. Wambold ----------------------------- Name: Richard L. Wambold Title: Chief Executive Officer FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Rights Agent By: /s/ Charles D. Keryc ----------------------------- Name: Charles D. Keryc Title: Managing Director 34 37 EXHIBIT A FORM OF CERTIFICATE OF DESIGNATION OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF PACTIV CORPORATION PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE PACTIV CORPORATION a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY: That pursuant to the authority vested in the Board of Directors in accordance with the provisions of the Restated Certificate of Incorporation of the said Corporation, the said Board of Directors adopted the following resolution creating a series of 750,000 shares of Preferred Stock designated as "Series A Junior Participating Preferred Stock": RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the Restated Certificate of Incorporation, a series of Preferred Stock, par value $.01 per share, of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows: SERIES A JUNIOR PARTICIPATING PREFERRED STOCK 1. Designation and Amount. There shall be a series of Preferred Stock that shall be designated as "Series A Junior Participating Preferred Stock," and the number of shares constituting such series shall be 750,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, however, that no decrease shall reduce the number of shares of Series A Junior Participating Preferred Stock to less than the number of shares then issued and outstanding plus the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Corporation. A-1 38 2. Dividends and Distribution. (A) Subject to the prior and superior rights of the holders of any shares of any class or series of stock of the Corporation ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock, in preference to the holders of shares of any class or series of stock of the Corporation ranking junior to the Series A Junior Participating Preferred Stock in respect thereof, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of January, April, July and October, in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $25.00 or (b) the Adjustment Number (as defined below) times the aggregate per share amount of all cash dividends, and the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $.01 per share, of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. The "Adjustment Number" shall initially be 1000. In the event the Corporation shall at any time after November 4, 1999 (i) declare and pay any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock). (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all A-2 39 such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof. 3. Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights: (A) Each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment Number on all matters submitted to a vote of the stockholders of the Corporation. (B) Except as required by law, by Section 3(C) and by Section 10 hereof, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. (C) If, at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether or not consecutive) payable on any share or shares of Series A Junior Participating Preferred Stock are in default, the number of directors constituting the Board of Directors of the Corporation shall be increased by two. In addition to voting together with the holders of Common Stock for the election of other directors of the Corporation, the holders of record of the Series A Junior Participating Preferred Stock, voting separately as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each subsequent annual meeting of stockholders), unless all dividends in arrears on the Series A Junior Participating Preferred Stock have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the Corporation, the holders of any Series A Junior Participating Preferred Stock being entitled to cast a number of votes per share of Series A Junior Participating Preferred Stock as is specified in paragraph (A) of this Section 3. Until the default in payments of all dividends which permitted the election of said directors shall cease to exist, any director who shall have been so elected pursuant to the provisions of this Section 3(C) may be removed at any time without cause only by the affirmative vote of the holders of the shares of Series A Junior Participating Preferred Stock at the time entitled to cast a majority of the votes entitled to be cast for the election of any such director at a special meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when such default shall cease to exist, the holders of the Series A Junior Participating Preferred Stock shall be divested of the foregoing special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon the termination of the foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to said special voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be reduced by two. The voting rights granted by this Section 3(C) shall be in addition to any other voting rights granted to the holders of the Series A Junior Participating Preferred Stock in this Section 3. 4. Certain Restrictions. A-3 40 (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not: (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock; (ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; or (iii) purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of Series A Junior Participating Preferred Stock, or to such holders and holders of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. 5. Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to any conditions and restrictions on issuance set forth herein. 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received an amount per share (the "Series A Liquidation Preference") equal to the greater of (i) $500.00 plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, or A-4 41 (ii) the Adjustment Number times the per share amount of all cash and other property to be distributed in respect of the Common Stock upon such liquidation, dissolution or winding up of the Corporation. (B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series A Junior Participating Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably to the holders of the Series A Junior Participating Preferred Stock and the holders of such parity shares in proportion to their respective liquidation preferences. (C) Neither the merger or consolidation of the Corporation into or with another corporation nor the merger or consolidation of any other corporation into or with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 6. 7. Consolidation, Merger, Etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the outstanding shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. 8. No Redemption. Shares of Series A Junior Participating Preferred Stock shall not be subject to redemption by the Corporation. 9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Preferred Stock as to the payment of dividends and as to the distribution of assets upon liquidation, dissolution or winding up, unless the terms of any such series shall provide otherwise, and shall rank senior to the Common Stock as to such matters. 10. Amendment. At any time that any shares of Series A Junior Participating Preferred Stock are outstanding, the Restated Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class. 11. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock. IN WITNESS WHEREOF, the undersigned has executed this Certificate this day of , 1999. A-5 42 PACTIV CORPORATION By: ------------------------------- Name: Title: A-6 43 EXHIBIT B FORM OF RIGHT CERTIFICATE Certificate No. R- Rights NOT EXERCISABLE AFTER NOVEMBER 4, 2009 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT (AS DEFINED BELOW), RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE. RIGHT CERTIFICATE PACTIV CORPORATION This certifies that or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Qualified Offer Plan Rights Agreement, dated as of November 4, 1999, as the same may be amended from time to time (the "Rights Agreement"), between Pactiv Corporation, a Delaware corporation (the "Company"), and First Chicago Trust Company of New York, as Rights Agent (the "Rights Agent"), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 p.m., New York City time, on November 4, 2009 at the office or agency of the Rights Agent designated for such purpose, or of its successor as Rights Agent, one one-thousandth of a fully paid non-assessable share of Series A Junior Participating Preferred Stock, par value $.01 per share (the "Preferred Stock"), of the Company at a purchase price of $60.00 per one one-thousandth of a share of Preferred Stock (the "Purchase Price"), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The number of Rights evidenced by this Rights Certificate (and the number of one one-thousandths of a share of Preferred Stock which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of November 4, 1999, based on the Preferred Stock as constituted at such date. As provided in the Rights Agreement, the Purchase Price, the number of one one-thousandths of a share of Preferred Stock (or other securities or property) which may be purchased upon the exercise of the Rights and the number of Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events. This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file B-1 44 at the principal executive offices of the Company and the above-mentioned office or agency of the Rights Agent. The Company will mail to the holder of this Right Certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. This Right Certificate, with or without other Right Certificates, upon surrender at the office or agency of the Rights Agent designated for such purpose, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares of Preferred Stock as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised. Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of $.01 per Right or (ii) may be exchanged in whole or in part for shares of the Company's Common Stock, par value $.01 per share, or shares of Preferred Stock. No fractional shares of Preferred Stock or Common Stock will be issued upon the exercise or exchange of any Right or Rights evidenced hereby (other than fractions of Preferred Stock which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depository receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise or exchange hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement) or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised or exchanged as provided in the Rights Agreement. This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. B-2 45 WITNESS the facsimile signature of the Chairman and Chief Executive Officer and the Secretary of the Company and its corporate seal. Dated as of , 1999 PACTIV CORPORATION By: -------------------------- Chief Executive Officer ATTEST: - ---------------------------------- Secretary Countersigned: FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Rights Agent By: -------------------------------------- Name: Its: B-3 46 FORM OF REVERSE SIDE OF RIGHT CERTIFICATE FORM OF ASSIGNMENT (TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH HOLDER DESIRES TO TRANSFER THE RIGHT CERTIFICATE) FOR VALUE RECEIVED hereby sells, assigns and transfers unto (Please print name and address of transferee) Rights represented by this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint Attorney, to transfer said Rights on the books of the within-named Company, with full power of substitution. Dated: -------------------------- - -------------------------------------- Signature Signature Guaranteed: Signatures must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee medallion program. (To be completed) The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, were not acquired by the undersigned from, and are not being assigned to an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). - -------------------------------------- Signature B-4 47 FORM OF REVERSE SIDE OF RIGHT CERTIFICATE - (CONTINUED) FORM OF ELECTION TO PURCHASE (TO BE EXECUTED IF HOLDER DESIRES TO EXERCISE RIGHTS REPRESENTED BY THE RIGHTS CERTIFICATE) To Pactiv Corporation: The undersigned hereby irrevocably elects to exercise Rights represented by this Right Certificate to purchase the shares of Preferred Stock (or other securities or property) issuable upon the exercise of such Rights and requests that certificates for such shares of Preferred Stock (or such other securities) be issued in the name of: - -------------------------------------------------------------------------------- (Please print name and address) - -------------------------------------------------------------------------------- If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to: Please insert social security or other identifying number - -------------------------------------------------------------------------------- (Please print name and address) - -------------------------------------------------------------------------------- Dated: ---------------------- - ---------------------------------- Signature (Signature must conform to holder specified on Right Certificate) Signature Guaranteed: Signature must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee medallion program. (To be completed) B-5 48 The undersigned certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, and were not acquired by the undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). - --------------------------------- Signature B-6 49 NOTICE The signature in the Form of Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever. In the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, such Assignment or Election to Purchase will not be honored. B-7 50 EXHIBIT C UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT (AS DEFINED BELOW), RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE. SUMMARY OF RIGHTS TO PURCHASE SHARES OF PREFERRED STOCK OF PACTIV CORPORATION The Board of Directors of Pactiv Corporation (the "Company") has declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of common stock, par value $.01 per share, of the Company (the "Common Stock"). The dividend is payable immediately prior to the Distribution (as defined in the Distribution Agreement by and between Tenneco Inc. and the Company) (the "Record Date") to the shareowners of record as of such time. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $.01 per share, of the Company (the "Preferred Stock") at a price of $60.00 per one one-thousandth of a share of Preferred Stock (the "Purchase Price"), subject to adjustment. The description and terms of the Rights are set forth in a Qualified Offer Plan Rights Agreement dated as of November 4, 1999, as the same may be amended from time to time (the "Rights Agreement"), between the Company and First Chicago Trust Company of New York, as Rights Agent (the "Rights Agent"). The Rights will expire on November 4, 2009 (the "Final Expiration Date"), unless the Final Expiration Date is advanced or extended or unless the Rights are earlier redeemed or exchanged by the Company, in either case as described below. In connection with the adoption of the Rights Agreement, the Board of Directors also adopted a "TIDE" (Three-year Independent Director Evaluation) mechanism. Under the TIDE mechanism, an independent Board committee will review, on an ongoing basis, the Rights Agreement and developments in rights plans generally, and, if it deems appropriate, recommend modification or termination of the Rights Agreement. This independent committee will report to Pactiv's Board at least every three years as to whether the Rights Agreement continues to be in the best interests of Pactiv's shareowners. The Rights are not exercisable until the "Distribution Date." Under the Rights Agreement, a "Distribution Date" occurs upon the earlier of (i) 10 days following a public announcement that a person or group of affiliated or associated persons has become an "Acquiring Person" or (ii) 10 business days (or such later date as may be determined by action of the Board of Directors prior to such time as any person or group of affiliated or associated persons becomes an Acquiring Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 20% or more of the outstanding shares of Common Stock. Except in certain situations, a person or group of affiliated or associated persons becomes an "Acquiring Person" upon acquiring beneficial ownership of 20% or more of the outstanding shares of Common Stock. Until the C-1 51 Distribution Date, the Rights will be evidenced, with respect to any of the Common Stock certificates outstanding as of the Record Date, by such Common Stock certificate together with a copy of this Summary of Rights. The Rights will not become exercisable in connection with a "Qualified Offer," which is an all-cash tender offer for all outstanding Common Stock that is fully financed, remains open for a period of at least 60 business days, results in the offeror owning at least 85% of the Common Stock after consummation of the offer, assures a prompt second-step acquisition of shares not purchased in the initial offer at the same price as the initial offer and meets certain other requirements. The Rights Agreement provides that, until the Distribution Date (or earlier expiration of the Rights), the Rights will be transferred with and only with the Common Stock. Until the Distribution Date (or earlier expiration of the Rights), new Common Stock certificates issued after the Record Date upon transfer or new issuances of Common Stock will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier expiration of the Rights), the surrender for transfer of any certificates for shares of Common Stock outstanding as of the Record Date, even without such notation or a copy of this Summary of Rights, will also constitute the transfer of the Rights associated with the shares of Common Stock represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights ("Right Certificates") will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the Rights. The Purchase Price payable, and the number of shares of Preferred Stock or other securities or property issuable, upon exercise of the Rights is subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for or purchase Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than the then-current market price of the Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends or dividends payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above). The number of outstanding Rights is subject to adjustment in the event of a stock dividend on the Common Stock payable in shares of Common Stock or subdivisions, consolidations or combinations of the Common Stock occurring, in any such case, prior to the Distribution Date. Shares of Preferred Stock purchasable upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will be entitled, when, as and if declared, to a minimum preferential quarterly dividend payment of the greater of (a) $25.00 per share, and (b) an amount equal to 1000 times the dividend declared per share of Common Stock. In the event of liquidation, dissolution or winding up of the Company, the holders of the Preferred Stock will be entitled to a minimum preferential payment of the greater of (a) $500.00 per share (plus any accrued but unpaid dividends), and (b) an amount equal to 1000 times the payment made per share of Common Stock. Each share of Preferred Stock will have 1000 votes, voting together with the Common Stock. Finally, in the event of any merger, consolidation or other transaction in which outstanding shares of Common Stock are converted or exchanged, each share of Preferred Stock will be entitled to receive 1000 C-2 52 times the amount received per share of Common Stock. These rights are protected by customary antidilution provisions. Because of the nature of the Preferred Stock's dividend, liquidation and voting rights, the value of the one one-thousandth interest in a share of Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of Common Stock. In the event that any person or group of affiliated or associated persons becomes an Acquiring Person, each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right that number of shares of Common Stock having a market value of two times the exercise price of the Right. In the event that, after a person or group has become an Acquiring Person, the Company is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are sold, proper provisions will be made so that each holder of a Right (other than Rights beneficially owned by an Acquiring Person which will have become void) will thereafter have the right to receive upon the exercise of a Right that number of shares of common stock of the person with whom the Company has engaged in the foregoing transaction (or its parent) that at the time of such transaction have a market value of two times the exercise price of the Right. At any time after any person or group becomes an Acquiring Person and prior to the earlier of one of the events described in the previous paragraph or the acquisition by such Acquiring Person of 50% or more of the outstanding shares of Common Stock, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such Acquiring Person which will have become void), in whole or in part, for shares of Common Stock or Preferred Stock (or a series of the Company's preferred stock having equivalent rights, preferences and privileges), at an exchange ratio of one share of Common Stock, or a fractional share of Preferred Stock (or other preferred stock) equivalent in value thereto, per Right. With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares of Preferred Stock or Common Stock will be issued (other than fractions of Preferred Stock which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), and in lieu thereof an adjustment in cash will be made based on the current market price of the Preferred Stock or the Common Stock. At any time prior to the time an Acquiring Person becomes such, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption Price") payable, at the option of the Company, in cash, shares of Common Stock or such other form of consideration as the Board of Directors of the Company shall determine. The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. C-3 53 For so long as the Rights are then redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement in any manner. After the Rights are no longer redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement in any manner that does not adversely affect the interests of holders of the Rights. Until a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a shareowner of the Company, including, without limitation, the right to vote or to receive dividends. A copy of the Rights Agreement is being filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 10. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, as the same may be amended from time to time, which is hereby incorporated herein by reference. C-4 EX-4.3(B) 8 FIRST SUPPLEMENTAL INDENTURE 1 EXHIBIT 4.3(b) ================================================================================ TENNECO PACKAGING INC. AND THE CHASE MANHATTAN BANK, as Trustee --------------------- First Supplemental Indenture Dated as of November 4, 1999 TO Indenture Dated as of September 29, 1999 --------------------- Providing for the issuance of 7.20% Notes due 2005 ================================================================================ 2 FIRST SUPPLEMENTAL INDENTURE dated as of November 4, 1999 between TENNECO PACKAGING INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as trustee (hereinafter called the "Trustee"). WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture dated as of September 29, 1999 (hereinafter called the "Original Indenture"), to provide for the issue of an unlimited amount of debentures, notes and/or other debt obligations of the Company (hereinafter referred to as the "Securities"), the terms of which are to be determined as set forth in Section 2.3 of the Original Indenture; and WHEREAS, Section 8.1 of the Original Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of setting forth the terms of Securities of any series; and WHEREAS, the Company desires to create a series of the Securities in an aggregate principal amount of $299,690,000 to be designated the "7.20% Notes due 2005" (the "Notes"), and all action on the part of the Company necessary to authorize the issuance of the Notes under the Original Indenture and this First Supplemental Indenture (the "Supplemental Indenture") has been duly taken; and WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee as in the Original Indenture provided, the valid and binding obligations of the Company, and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed; NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, and of the acceptance of this trust by the Trustee, and of the sum of one dollar to the Company duly paid by the Trustee at the execution and delivery of these presents, and of other valuable consideration the receipt whereof is hereby acknowledged and in order to authorize the authentication and delivery of and to set forth the terms of the Notes. IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the parties hereto, for the benefit of holders of the Notes issued under the Original Indenture, as follows: ARTICLE 1. TERMS AND ISSUANCE OF 7.20% NOTES DUE 2005 Section 1.1. Issue of Notes. A series of Securities which shall be designated the "7.20% Notes due 2005" shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of the Original Indenture, including without limitation the terms set forth in this Supplemental Indenture (including the form of Notes set forth in Section 1.3 hereof). The aggregate principal amount of Notes which may be authenticated and delivered under the Original Indenture shall not, except as permitted by the provisions of Sections 2.8, 2.9, 2.11, 8.5 and 12.3 of the Original Indenture, exceed -1- 3 $299,690,000. The entire amount of Notes may forthwith be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered to or upon the order of the Company pursuant to Section 2.4 of the Original Indenture. Section 1.2. Registered Global Securities. Except as otherwise expressly provided in the Original Indenture, all the Securities issued pursuant to this Supplemental Indenture shall be issued as a single Registered Global Security and no Securities issued pursuant to this Supplemental Indenture will be unregistered; provided, however, that notwithstanding the foregoing, all Securities issued under this Supplemental Indenture on or before November 4, 1999 may be issued as a single Registered Security, registered in the name of Tenneco Inc. The Registered Global Security shall bear the following Legend (the "Legend"): "Unless this certificate is presented by an authorized representative of a Depositary to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of the nominee of such Depositary or such other name as requested by an authorized representative of such Depositary and any payment is made to the nominee of such Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, the nominee, has an interest herein." The initial Depositary (as defined in the Original Indenture) for such Registered Global Security shall be The Depository Trust Company. Each Depositary must, at the time of its designation and at all times it serves as a depositary, be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and any other applicable statute or regulation. The Company shall execute and the Trustee shall, in accordance with Section 2.4 of the Original Indenture and the Issuer Order (as defined in the Original Indenture) with respect to the Notes, authenticate and deliver the single Registered Global Security that (i) shall represent and shall be denominated in the amount equal to the aggregate principal amount of all the Notes to be represented by the Registered Global Security, (ii) shall be registered in the name of the Depositary for the Registered Global Security or the nominee of the Depositary, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instructions and (iv) shall bear the Legend on the reverse of each of the Notes. Section 1.3. Forms of Notes and Authentication Certificate. The forms of the Notes and the Trustee's certificate of authentication shall be substantially as follows: [FORM OF FACE OF NOTE] TENNECO PACKAGING INC. 7.20% NOTE DUE 2005 No. $ CUSIP Tenneco Packaging Inc., a corporation organized and existing under the laws of the State of Delaware (hereinafter called the "Company," which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to _________________________ or registered assigns, the sum of ______________ Dollars on -2- 4 December 15, 2005, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered holder hereof as hereinafter provided interest thereon at the rate per annum specified in the title hereof in like coin or currency, from the June 15 or December 15 next preceding the date hereof to which interest has been paid, unless the date hereof is a June 15 or December 15 to which interest on the Notes has been paid, in which case from the date hereof, or unless no interest has been paid on the Notes since the original issue date (hereinafter referred to) of this Note, in which case from the original issue date, semi-annually on June 15 and December 15 in each year commencing December 15, 1999, until payment of said principal sum has been made or duly provided for, and to pay interest on any overdue principal and (to the extent permitted by law) on any overdue installment of interest at the rate of 7.20% per annum. Notwithstanding the foregoing, when there is no existing default in the payment of interest on the Notes, if the date hereof is after May 31 or November 30 and prior to the following June 15 or December 15, as the case may be, this Note shall bear interest from such June 15 or December 15, or, if no interest has been paid on the Notes since the original issue date of this Note, from the original issue date; provided, however, that if the Company shall default in the payment of interest due on such June 15 or December 15, then this Note shall bear interest from the June 15 or December 15 to which interest has been paid or, if no interest has been paid on the Notes since the original issue date of this Note, from the original issue date. The interest so payable on any June 15 or December 15 will, subject to certain exceptions provided in the Indenture hereinafter referred to, be paid to the person in whose name this Note is registered at the close of business on the May 31 or November 30, as the case may be, next preceding such June 15 or December 15, or if such May 31 or November 30 is not a business day, the business day next preceding such May 31 or November 30. Interest on this Note shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Both principal of and interest on this Note are payable at the principal office of the Trustee in the Borough of Manhattan, The City of New York, New York; provided, however, that payment of interest may be made, at the option of the Company, by check mailed to the address of the person entitled thereto as such address shall appear on the Note register. The original issue date in respect of the Notes is __________, - -----. ADDITIONAL PROVISIONS OF THIS NOTE ARE CONTAINED ON THE REVERSE HEREOF AND SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. This Note shall not be entitled to any benefit under the Indenture hereafter referred to, or become valid or obligatory for any purpose, until the Trustee under the Indenture shall have signed the form of certificate of authentication endorsed hereon. In Witness Whereof, Tenneco Packaging Inc. has caused this Instrument to be signed in its name by its Chairman of the Board or its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by its Secretary or an Assistant Secretary. Dated: _________________________ -3- 5 Tenneco Packaging Inc. By___________________________________ President Attest: - -------------------------------------- Secretary [FORM OF REVERSE OF NOTE] TENNECO PACKAGING INC. 7.20% NOTE DUE 2005 This Note is one of a duly authorized issue of Notes of the Company known as its 7.20% Notes due 2005 (herein called the "Notes"), limited to the aggregate principal amount of $299,690,000, all issued under and equally entitled to the benefits of an Indenture (herein, together with any amendments and supplements thereto, including without limitation the form and terms of Securities issued pursuant thereto, called the "Indenture"), dated as of September 29, 1999, executed by the Company to The Chase Manhattan Bank (herein, together with any successor thereto, called the "Trustee"), as Trustee, to which Indenture reference is hereby made for a statement of the rights thereunder of the Trustee and of the registered holders of the Notes and of the duties thereunder of the Trustee and the Company. The Notes will be redeemable as a whole or in part, at the option of the Company at any time, at a redemption price equal to the greater of (i) 100% of their principal amount and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30- day months) at the Treasury Yield plus 10 basis points, plus in each case accrued and unpaid interest to the date of redemption. "Treasury Yield" means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. "Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Notes that would be utilized, at the time of selection and in accordance with customary financial practice, -4- 6 in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. "Independent Investment Banker" means Morgan Stanley & Co. Incorporated or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee. "Comparable Treasury Price" means, with respect to any redemption date, (i) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third business day preceding such redemption date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated "Composite 3:00 p.m. Quotations for U.S. Government Securities" or (ii) if such release (or any successor release) is not published or does not contain such prices on such business day, (A) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption date. "Reference Treasury Dealer" means each of Morgan Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Lehman Brothers, Inc. and Salomon Smith Barney Inc.; provided, however, that if any of the foregoing cease to be a primary U.S. Government Securities dealer in New York City (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer. Holders of Notes to be redeemed will receive notice thereof by first-class mail at least 30 and not more than 60 days prior to the date fixed for redemption. The Indenture permits the Company to issue unsecured debentures, notes and/or other evidences of indebtedness in one or more series ("Securities") up to such principal amount or amounts as may be authorized in accordance with the terms of the Indenture. To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture and of the rights and obligations of the Company and of the holders of the Notes may be made with the consent of the Company and with the consent of the holders of not less than a majority in principal amount of the Securities of all series then outstanding under the Indenture (treated as a single class) which are affected by the modification or amendment thereto; provided, however, that without the consent of the holder hereof no such modification or alteration shall be made which will affect the terms of payment of the principal of or interest on this Note. -5- 7 In case a default, as defined in the Indenture, shall occur, the principal of all the Notes at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Notes outstanding in the case of payment defaults on the Notes and in certain other events by the holders of a majority in principal amount of the Securities of all series then outstanding under the Indenture (treated as a single class) which are affected thereby. The Indenture provides that no holder of any Note may enforce any remedy under the Indenture except in the case of refusal or neglect of the Trustee to act after notice of default and after request by the holders of a majority in principal amount of the outstanding Notes in certain events (and in certain other events by the holders of a majority in principal amount of the Securities of all series then outstanding under the Indenture, treated as a single class, which are affected thereby) and the offer to the Trustee of security and indemnity satisfactory to it; provided, however, that such provision shall not prevent the holder hereof from enforcing payment of the principal of or interest on this Note. Unless this certificate is presented by an authorized representative of a Depositary to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of the nominee of such Depositary or such other name as requested by an authorized representative of such Depositary and any payment is made to the nominee of such Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, the nominee, has an interest herein. The Company, the Trustee, any paying agent and any Registrar of the Notes may deem and treat the person in whose name this Note is registered as the absolute owner hereof for all purposes whatsoever, and neither the Company nor the Trustee nor any paying agent nor any Registrar of the Notes shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on, this Note, or for any claim based hereon or on the Indenture, against any incorporator, or against any stockholder, director or officer, as such, past, present or future, of the Company, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Note and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture; provided, however, that nothing herein or in the Indenture contained shall be taken to prevent recourse to and the enforcement of the liability, if any, of any stockholder or subscriber to capital stock of the Company upon or in respect of shares of capital stock not fully paid up. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. -6- 8 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Note is one of the 7.20% Notes due 2005 described in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, Trustee By____________________________ Authorized Officer ARTICLE 2. MISCELLANEOUS Section 2.1. Execution as Supplemental Indenture. This Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Supplemental Indenture forms a part thereof. Except as herein expressly otherwise defined, the use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture. Section 2.2. Responsibility for Recitals, Etc. The recitals herein and in the Notes (except in the Trustee's certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the Company of the Notes or of the proceeds thereof. Section 2.3. Additional Amounts. The Company will not pay any additional amounts on the Notes held by a person who is not a U.S. Person (as defined in the Original Indenture) in respect of any tax, assessment or governmental charge withheld or deducted. Section 2.4. Provisions Binding on Company's Successors. All the covenants, stipulations, promises and agreements in this Supplemental Indenture contained by the Company shall bind its successors and assigns whether so expressed or not. Section 2.5. NEW YORK CONTRACT. THIS SUPPLEMENTAL INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF -7- 9 THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. Section 2.6. Execution and Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original but such counterparts shall together constitute but one and the same instrument. -8- 10 IN WITNESS WHEREOF, said TENNECO PACKAGING INC. has caused this Supplemental Indenture to be executed in its corporate name by its Chairman of the Board or its President or one of its Vice Presidents, and said THE CHASE MANHATTAN BANK has caused this Supplemental Indenture to be executed in its corporate name by one of its Vice Presidents as of November 4, 1999. TENNECO PACKAGING INC. By /s/ Karen R. Osar ------------------------------------ Name: Karen R. Osar Title: Vice President and Treasurer THE CHASE MANHATTAN BANK By /s/ Ronald J. Halleran ------------------------------------ Name: Ronald J. Halleran Title: Assistant Vice President -9- EX-4.3(C) 9 SECOND SUPPLEMENTAL INDENTURE 1 EXHIBIT 4.3(c) ================================================================================ TENNECO PACKAGING INC. AND THE CHASE MANHATTAN BANK, as Trustee --------------------- Second Supplemental Indenture Dated as of November 4, 1999 TO Indenture Dated as of September 29, 1999 --------------------- Providing for the issuance of 7.95% Debentures due 2025 ================================================================================ 2 SECOND SUPPLEMENTAL INDENTURE dated as of November 4, 1999 between TENNECO PACKAGING INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as trustee (hereinafter called the "Trustee"). WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture dated as of September 29, 1999 (hereinafter called the "Original Indenture"), to provide for the issue of an unlimited amount of debentures, notes and/or other debt obligations of the Company (hereinafter referred to as the "Securities"), the terms of which are to be determined as set forth in Section 2.3 of the Original Indenture; and WHEREAS, Section 8.1 of the Original Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of setting forth the terms of Securities of any series; and WHEREAS, the Company desires to create a series of the Securities in an aggregate principal amount of $276,794,000 to be designated the "7.95% Debentures due 2025" (the "Debentures"), and all action on the part of the Company necessary to authorize the issuance of the Debentures under the Original Indenture and this Second Supplemental Indenture (the "Supplemental Indenture") has been duly taken; and WHEREAS, all acts and things necessary to make the Debentures, when executed by the Company and authenticated and delivered by the Trustee as in the Original Indenture provided, the valid and binding obligations of the Company, and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed; NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, and of the acceptance of this trust by the Trustee, and of the sum of one dollar to the Company duly paid by the Trustee at the execution and delivery of these presents, and of other valuable consideration the receipt whereof is hereby acknowledged and in order to authorize the authentication and delivery of and to set forth the terms of the Debentures. IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the parties hereto, for the benefit of holders of the Debentures issued under the Original Indenture, as follows: ARTICLE 1. TERMS AND ISSUANCE OF 7.95% DEBENTURES DUE 2025 Section 1.1. Issue of Debentures. A series of Securities which shall be designated the "7.95% Debentures due 2025" shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of the Original Indenture including without limitation the terms set forth in this Supplemental Indenture (including the form of Debentures set forth in Section 1.3 hereof). The aggregate principal amount of Debentures which may be authenticated and delivered under the Original Indenture shall not, except as permitted by the provisions of Sections 2.8, 2.9, 2.11, 8.5 and 12.3 of the Original -1- 3 Indenture, exceed $276,794,000. The entire amount of Debentures may forthwith be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered to or upon the order of the Company pursuant to Section 2.4 of the Original Indenture. Section 1.2. Registered Global Securities. Except as otherwise expressly provided in the Original Indenture, all the Securities issued pursuant to this Supplemental Indenture shall be issued as a single Registered Global Security and no Securities issued pursuant to this Supplemental Indenture will be unregistered; provided, however, that notwithstanding the foregoing, all Securities issued under this Supplemental Indenture on or before November 4, 1999 may be issued originally as a single Registered Security, registered in the name of Tenneco Inc. The Registered Global Security shall bear the following Legend (the "Legend"): "Unless this certificate is presented by an authorized representative of a Depositary to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of the nominee of such Depositary or such other name as requested by an authorized representative of such Depositary and any payment is made to the nominee of such Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, the nominee, has an interest herein." The initial Depositary (as defined in the Original Indenture) for such Registered Global Security shall be The Depository Trust Company. Each Depositary must, at the time of its designation and at all times it serves as a depositary, be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and any other applicable statute or regulation. The Company shall execute and the Trustee shall, in accordance with Section 2.4 of the Original Indenture and the Issuer Order (as defined in the Original Indenture) with respect to the Debentures, authenticate and deliver the single Registered Global Security that (i) shall represent and shall be denominated in the amount equal to the aggregate principal amount of all the Debentures to be represented by the Registered Global Security, (ii) shall be registered in the name of the Depositary for the Registered Global Security or the nominee of the Depositary, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instructions and (iv) shall bear the Legend on the reverse of each of the Debentures. Section 1.3. Forms of Debentures and Authentication Certificate. The forms of the Debentures and the Trustee's certificate of authentication shall be substantially as follows: [FORM OF FACE OF DEBENTURE] TENNECO PACKAGING INC. 7.95% DEBENTURE DUE 2025 No. CUSIP $___________ Tenneco Packaging Inc., a corporation organized and existing under the laws of the State of Delaware (hereinafter called the "Company," which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay -2- 4 to________________________ or registered assigns, the sum of ________________ Dollars on December 15, 2025, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered holder hereof as hereinafter provided interest thereon at the rate per annum specified in the title hereof in like coin or currency, from the June 15 or December 15 next preceding the date hereof to which interest has been paid, unless the date hereof is a June 15 or December 15 to which interest on the Debentures has been paid, in which case from the date hereof, or unless no interest has been paid on the Debentures since the original issue date (hereinafter referred to) of this Debenture, in which case from the original issue date, semi-annually on June 15 and December 15 in each year commencing December 15, 1999, until payment of said principal sum has been made or duly provided for, and to pay interest on any overdue principal and (to the extent permitted by law) on any overdue installment of interest at the rate of 7.95% per annum. Notwithstanding the foregoing, when there is no existing default in the payment of interest on the Debentures, if the date hereof is after May 31 or November 30 and prior to the following June 15 or December 15, as the case may be, this Debenture shall bear interest from such June 15 or December 15, or, if no interest has been paid on the Debentures since the original issue date of this Debenture, from the original issue date; provided, however, that if the Company shall default in the payment of interest due on such June 15 or December 15, then this Debenture shall bear interest from the June 15 or December 15 to which interest has been paid or, if no interest has been paid on the Debentures since the original issue date of this Debenture, from the original issue date. The interest so payable on any June 15 or December 15 will, subject to certain exceptions provided in the Indenture hereinafter referred to, be paid to the person in whose name this Debenture is registered at the close of business on the May 31 or November 30, as the case may be, next preceding such June 15 or December 15, or if such May 31 or November 30 is not a business day, the business day next preceding such May 31 or November 30. Interest on this Debenture shall be computed on the basis of a 360-day year of twelve 30-day months. Both principal of and interest on this Debenture are payable at the principal office of the Trustee in the Borough of Manhattan, The City of New York, New York; provided, however, that payment of interest may be made, at the option of the Company, by check mailed to the address of the person entitled thereto as such address shall appear on the Debenture register. The original issue date in respect of the Debentures is _________, ________. ADDITIONAL PROVISIONS OF THIS DEBENTURE ARE CONTAINED ON THE REVERSE HEREOF AND SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. This Debenture shall not be entitled to any benefit under the Indenture hereafter referred to, or become valid or obligatory for any purpose, until the Trustee under the Indenture shall have signed the form of certificate of authentication endorsed hereon. In Witness Whereof, Tenneco Packaging Inc. has caused this Instrument to be signed in its name by its Chairman of the Board or its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by its Secretary or an Assistant Secretary. Dated_________________________ -3- 5 Tenneco Packaging Inc. By___________________________________ President Attest: - -------------------------------------- Secretary [FORM OF REVERSE OF DEBENTURE] TENNECO PACKAGING INC. 7.95% DEBENTURE DUE 2025 This Debenture is one of a duly authorized issue of Debentures of the Company known as its 7.95% Debentures due 2025 (herein called the "Debentures"), limited to the aggregate principal amount of $276,794,000, all issued under and equally entitled to the benefits of an Indenture (herein, together with any amendments and supplements thereto, including without limitation the form and terms of Securities issued pursuant thereto, called the "Indenture"), dated as of September 29, 1999, executed by the Company to The Chase Manhattan Bank (herein, together with any successor thereto, called the "Trustee"), as Trustee, to which Indenture reference is hereby made for a statement of the rights thereunder of the Trustee and of the registered holders of the Debentures and of the duties thereunder of the Trustee and the Company. The Debentures will not be redeemable prior to maturity. The Indenture permits the Company to issue unsecured debentures, notes and/or other evidences of indebtedness in one or more series ("Securities") up to such principal amount or amounts as may be authorized in accordance with the terms of the Indenture. To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture and of the rights and obligations of the Company and of the holders of the Debentures may be made with the consent of the Company and with the consent of the holders of not less than a majority in principal amount of the Securities of all series then outstanding under the Indenture (treated as a single class) which are affected by the modification or amendment thereto; provided, however, that without the consent of the holder hereof no such modification or alteration shall be made which will affect the terms of payment of the principal of or interest on this Debenture. In case a default, as defined in the Indenture, shall occur, the principal of all the Debentures at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture -4- 6 provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Debentures outstanding in the case of payment defaults on the Debentures and in certain other events by the holders of a majority in principal amount of the Securities of all series then outstanding under the Indenture (treated as a single class) which are affected thereby. The Indenture provides that no holder of any Debenture may enforce any remedy under the Indenture except in the case of refusal or neglect of the Trustee to act after notice of default and after request by the holders of a majority in principal amount of the outstanding Debentures in certain events (and in certain other events by the holders of a majority in principal amount of the Securities of all series then outstanding under the Indenture, treated as a single class, which are affected thereby) and the offer to the Trustee of security and indemnity satisfactory to it; provided, however, that such provision shall not prevent the holder hereof from enforcing payment of the principal of or interest on this Debenture. Unless this certificate is presented by an authorized representative of a Depositary to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of the nominee of such Depositary or such other name as requested by an authorized representative of such Depositary and any payment is made to the nominee of such Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, the nominee, has an interest herein. The Company, the Trustee, any paying agent and any Registrar of the Debentures may deem and treat the person in whose name this Debenture is registered as the absolute owner hereof for all purposes whatsoever, and neither the Company nor the Trustee nor any paying agent nor any Registrar of the Debentures shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on, this Debenture, or for any claim based hereon or on the Indenture, against any incorporator, or against any stockholder, director or officer, as such, past, present or future, or the Company, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Debenture and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture; provided, however, that nothing herein or in the Indenture contained shall be taken to prevent recourse to and the enforcement of the liability, if any, of any stockholder or subscriber to capital stock of the Company upon or in respect of shares of capital stock not fully paid up. All terms used in this Debenture which are defined in the Indenture shall have the meanings assigned to them in the Indenture. -5- 7 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Debenture is one of the 7.95% Debentures due 2025 described in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, Trustee By____________________________ Authorized Officer ARTICLE 2. MISCELLANEOUS Section 2.1. Execution as Supplemental Indenture. This Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Supplemental Indenture forms a part thereof. Except as herein expressly otherwise defined, the use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture. Section 2.2. Responsibility for Recitals, Etc. The recitals herein and in the Debentures (except in the Trustee's certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture or of the Debentures. The Trustee shall not be accountable for the use or application by the Company of the Debentures or of the proceeds thereof. Section 2.3. Additional Amounts. The Company will not pay any additional amounts on the Debentures held by a person who is not a U.S. Person (as defined in the Original Indenture) in respect of any tax, assessment or governmental charge withheld or deducted. Section 2.4. Provisions Binding on Company's Successors. All the covenants, stipulations, promises and agreements in this Supplemental Indenture contained by the Company shall bind its successors and assigns whether so expressed or not. Section 2.5. NEW YORK CONTRACT. THIS SUPPLEMENTAL INDENTURE AND EACH DEBENTURE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. -6- 8 Section 2.6. Execution and Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original but such counterparts shall together constitute but one and the same instrument. -7- 9 IN WITNESS WHEREOF, said TENNECO PACKAGING INC. has caused this Supplemental Indenture to be executed in its corporate name by its Chairman of the Board or its President or one of its Vice Presidents, and said THE CHASE MANHATTAN BANK has caused this Supplemental Indenture to be executed in its corporate name by one of its Vice Presidents as of November 4, 1999. TENNECO PACKAGING INC. By /s/ Karen R. Osar ----------------------------------- Name: Karen R. Osar Title: Vice President and Treasurer THE CHASE MANHATTAN BANK By /s/ Ronald J. Halleran ----------------------------------- Name: Ronald J. Halleran Title: Assistant Vice President -8- EX-4.3(D) 10 THIRD SUPPLEMENTAL INDENTURE 1 EXHIBIT 4.3(d) ================================================================================ TENNECO PACKAGING INC. AND THE CHASE MANHATTAN BANK, as Trustee --------------------- Third Supplemental Indenture Dated as of November 4, 1999 TO Indenture Dated as of September 29, 1999 --------------------- Providing for the issuance of 8% Notes due 2007 ================================================================================ 2 THIRD SUPPLEMENTAL INDENTURE dated as of November 4, 1999 between TENNECO PACKAGING INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as trustee (hereinafter called the "Trustee"). WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture dated as of September 29, 1999 (hereinafter called the "Original Indenture"), to provide for the issue of an unlimited amount of debentures, notes and/or other debt obligations of the Company (hereinafter referred to as the "Securities"), the terms of which are to be determined as set forth in Section 2.3 of the Original Indenture; and WHEREAS, Section 8.1 of the Original Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of setting forth the terms of Securities of any series; and WHEREAS, the Company desires to create a series of the Securities in an aggregate principal amount of $100,000,000 to be designated the "8% Notes due 2007" (the "Notes"), and all action on the part of the Company necessary to authorize the issuance of the Notes under the Original Indenture and this Third Supplemental Indenture (the "Supplemental Indenture") has been duly taken; and WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee as in the Original Indenture provided, the valid and binding obligations of the Company, and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed; NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, and of the acceptance of this trust by the Trustee, and of the sum of one dollar to the Company duly paid by the Trustee at the execution and delivery of these presents, and of other valuable consideration the receipt whereof is hereby acknowledged and in order to authorize the authentication and delivery of and to set forth the terms of the Notes. IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the parties hereto, for the benefit of holders of the Notes issued under the Original Indenture, as follows: ARTICLE 1. TERMS AND ISSUANCE OF 8% NOTES DUE 2007 Section 1.1. Issue of Notes. A series of Securities which shall be designated the "8% Notes due 2007" shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of the Original Indenture, including without limitation the terms set forth in this Supplemental Indenture (including the form of Notes set forth in Section 1.3 hereof). The aggregate principal amount of Notes which may be authenticated and delivered under the Original Indenture shall not, except as permitted by the provisions of Sections 2.8, 2.9, 2.11, 8.5 and 12.3 of the Original Indenture, exceed $100,000,000. 3 The entire amount of Notes may forthwith be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered to or upon the order of the Company pursuant to Section 2.4 of the Original Indenture. Section 1.2. Registered Global Securities. Except as otherwise expressly provided in the Original Indenture, all the Securities issued pursuant to this Supplemental Indenture shall be issued as a single Registered Global Security and no Securities issued pursuant to this Supplemental Indenture will be unregistered; provided, however, that notwithstanding the foregoing, all Securities issued under this Supplemental Indenture on or before November 4, 1999 may be issued as a single Registered Security, registered in the name of Tenneco Inc. The Registered Global Security shall bear the following Legend (the "Legend"): "Unless this certificate is presented by an authorized representative of a Depositary to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of the nominee of such Depositary or such other name as requested by an authorized representative of such Depositary and any payment is made to the nominee of such Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, the nominee, has an interest herein." The initial Depositary (as defined in the Original Indenture) for such Registered Global Security shall be The Depository Trust Company. Each Depositary must, at the time of its designation and at all times it serves as a depositary, be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and any other applicable statute or regulation. The Company shall execute and the Trustee shall, in accordance with Section 2.4 of the Original Indenture and the Issuer Order (as defined in the Original Indenture) with respect to the Notes, authenticate and deliver the single Registered Global Security that (i) shall represent and shall be denominated in the amount equal to the aggregate principal amount of all the Notes to be represented by the Registered Global Security, (ii) shall be registered in the name of the Depositary for the Registered Global Security or the nominee of the Depositary, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instructions and (iv) shall bear the Legend on the reverse of each of the Notes. Section 1.3. Forms of Notes and Authentication Certificate. The forms of the Notes and the Trustee's certificate of authentication shall be substantially as follows: [FORM OF FACE OF NOTE] TENNECO PACKAGING INC. 8% NOTE DUE 2007 No. CUSIP $____________ Tenneco Packaging Inc., a corporation organized and existing under the laws of the State of Delaware (hereinafter called the "Company," which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to -2- 4 ______________ or registered assigns, the sum of Dollars on April 15, 2007, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered holder hereof as hereinafter provided interest thereon at the rate per annum specified in the title hereof in like coin or currency, from the April 15 or October 15 next preceding the date hereof to which interest has been paid, unless the date hereof is an April 15 or October 15 to which interest on the Notes has been paid, in which case from the date hereof, or unless no interest has been paid on the Notes since the original issue date (hereinafter referred to) of this Note, in which case from the original issue date, semi-annually on April 15 and October 15 in each year commencing April 15, 2000 until payment of said principal sum has been made or duly provided for, and to pay interest on any overdue principal and (to the extent permitted by law) on any overdue installment of interest at the rate of 8% per annum. Notwithstanding the foregoing, when there is no existing default in the payment of interest on the Notes, if the date hereof is after April 1 or October 1 and prior to the following April 15 or October 15, as the case may be, this Note shall bear interest from such April 15 or October 15, or, if no interest has been paid on the Notes since the original issue date of this Note, from the original issue date; provided, however, that if the Company shall default in the payment of interest due on such April 15 or October 15, then this Note shall bear interest from the April 15 or October 15 to which interest has been paid or, if no interest has been paid on the Notes since the original issue date of this Note, from the original issue date. The interest so payable on any April 15 or October 15 will, subject to certain exceptions provided in the Indenture hereinafter referred to, be paid to the person in whose name this Note is registered at the close of business on the April 1 or October 1, as the case may be, next preceding such April 15 or October 15, or if such April 1 or October 1 is not a business day, the business day next preceding such April 1 or October 1. Interest on this Note shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Both principal of and interest on this Note are payable at the principal office of the Trustee in the Borough of Manhattan, The City of New York, New York; provided, however, that payment of interest may be made, at the option of the Company, by check mailed to the address of the person entitled thereto as such address shall appear on the Note register. The original issue date in respect of the Notes is ___________, _____. ADDITIONAL PROVISIONS OF THIS NOTE ARE CONTAINED ON THE REVERSE HEREOF AND SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. This Note shall not be entitled to any benefit under the Indenture hereinafter referred to, or become valid or obligatory for any purpose, until the Trustee under the Indenture shall have signed the form of certificate of authentication endorsed hereon. In Witness Whereof, Tenneco Packaging Inc. has caused this Instrument to be signed in its name by its Chairman of the Board or its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by its Secretary or an Assistant Secretary. Dated ________________________ -3- 5 Tenneco Packaging Inc. By_________________________________ President Attest: - --------------------------------- Secretary [FORM OF REVERSE OF NOTE] TENNECO PACKAGING INC. 8% NOTE DUE 2007 This Note is one of a duly authorized issue of Notes of the Company known as its 8% Notes due 2007 (herein called the "Notes"), limited to the aggregate principal amount of $100,000,000, all issued under and equally entitled to the benefits of an Indenture (herein, together with any amendments and supplements thereto, including without limitation the form and terms of Securities issued pursuant thereto, called the "Indenture"), dated as of September 29, 1999, executed by the Company to The Chase Manhattan Bank (herein, together with any successor thereto, called the "Trustee"), as Trustee, to which Indenture reference is hereby made for a statement of the rights thereunder of the Trustee and of the registered holders of the Notes and of the duties thereunder of the Trustee and the Company. The Notes will be redeemable as a whole or in part, at the option of the Company at any time, at a redemption price equal to the greater of (i) 100% of their principal amount and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 10 basis points, plus accrued and unpaid interest to the date of redemption. "Treasury Yield" means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. "Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Notes that would be utilized, at the time of selection and in accordance with customary financial practice, -4- 6 in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. "Independent Investment Banker" means Morgan Stanley & Co. Incorporated or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee. "Comparable Treasury Price" means, with respect to any redemption date, (i) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption date. "Reference Treasury Dealer" means each of Morgan Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Lehman Brothers, Inc. and Salomon Smith Barney Inc.; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer. Holders of Notes to be redeemed will receive notice thereof by first-class mail at least 30 and not more than 60 days prior to the date fixed for redemption. The Indenture permits the Company to issue unsecured debentures, notes, and/or other evidences of indebtedness in one or more series ("Securities") up to such principal amount or amounts as may be authorized in accordance with the terms of the Indenture. To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture and of the rights and obligations of the Company and of the holders of the Notes may be made with the consent of the Company and with the consent of the holders of not less than a majority in principal amount of the Securities of all series then outstanding under the Indenture (treated as a single class) which are affected by the modification or amendment thereto; provided, however, that without the consent of the holder hereof no such modification or alteration shall be made which will affect the terms of payment of the principal of or interest on this Note. In case a default, as defined in the Indenture, shall occur, the principal of all the Notes at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Notes outstanding in the case of payment defaults on the Notes and in certain -5- 7 other events by the holders of a majority in principal amount of the Securities of all series then outstanding under the Indenture (treated as a single class) which are affected thereby. The Indenture provides that no holder of any Note may enforce any remedy under the Indenture except in the case of refusal or neglect of the Trustee to act after notice of default and after request by the holders of a majority in principal amount of the outstanding Notes in certain events (and in certain other events by the holders of a majority in principal amount of the Securities of all series then outstanding under the Indenture, treated as a single class, which are affected thereby) and the offer to the Trustee of security and indemnity satisfactory to it; provided, however, that such provision shall not prevent the holder hereof from enforcing payment of the principal of or interest on this Note. Unless this certificate is presented by an authorized representative of a Depositary to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of the nominee of such Depositary or such other name as requested by an authorized representative of such Depositary and any payment is made to the nominee of such Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, the nominee, has an interest herein. The Company, the Trustee, any paying agent and any Registrar of the Notes may deem and treat the person in whose name this Note is registered as the absolute owner hereof for all purposes whatsoever, and neither the Company nor the Trustee nor any paying agent nor any Registrar of the Notes shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on, this Note, or for any claim based hereon or on the Indenture, against any incorporator or against any stockholder, director or officer, as such, past, present or future, of the Company, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Note and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture; provided, however, that nothing herein or in the Indenture contained shall be taken to prevent recourse to and the enforcement of the liability, if any, of any stockholder or subscriber to capital stock of the Company upon or in respect of shares of capital stock not fully paid up. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Note is one of 8% Notes due 2007 described in the within-mentioned Indenture. -6- 8 THE CHASE MANHATTAN BANK, Trustee By_________________________ Authorized Officer ARTICLE 2. MISCELLANEOUS Section 2.1. Execution as Supplemental Indenture. This Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Supplemental Indenture forms a part thereof. Except as herein expressly otherwise defined, the use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture. Section 2.2. Responsibility for Recitals, Etc. The recitals herein and in the Notes (except in the Trustee's certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the Company of the Notes or of the proceeds thereof. Section 2.3. Additional Amounts. The Company will not pay any additional amounts on the Notes held by a person who is not a U.S. Person (as defined in the Original Indenture) in respect of any tax, assessment or governmental charge withheld or deducted. Section 2.4. Provisions Binding on Company's Successors. All the covenants, stipulations, promises and agreements in this Supplemental Indenture contained by the Company shall bind its successors and assigns whether so expressed or not. Section 2.5. NEW YORK CONTRACT. THIS SUPPLEMENTAL INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. Section 2.6. Execution and Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original but such counterparts shall together constitute but one and the same instrument. -7- 9 IN WITNESS WHEREOF, said TENNECO PACKAGING INC. has caused this Supplemental Indenture to be executed in its corporate name by its Chairman of the Board or its President or one of its Vice Presidents, and said THE CHASE MANHATTAN BANK has caused this Supplemental Indenture to be executed in its corporate name by one of its Vice Presidents as of November 4, 1999. TENNECO PACKAGING INC. By /s/ Karen R. Osar --------------------------------------- Name: Karen R. Osar Title: Vice President and Treasurer THE CHASE MANHATTAN BANK By /s/ Ronald J. Halleran --------------------------------------- Name: Ronald J. Halleran Title: Assistant Vice President -8- EX-4.3(E) 11 FOURTH SUPPLEMENTAL INDENTURE 1 EXHIBIT 4.3(e) ================================================================================ TENNECO PACKAGING INC. AND THE CHASE MANHATTAN BANK, as Trustee --------------------- Fourth Supplemental Indenture Dated as of November 4, 1999 TO Indenture Dated as of September 29, 1999 --------------------- Providing for the issuance of 8-1/8% Debentures due June 15, 2017 ================================================================================ 2 FOURTH SUPPLEMENTAL INDENTURE dated as of November 4, 1999 between TENNECO PACKAGING INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as trustee (hereinafter called the "Trustee"). WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture dated as of September 29, 1999 (hereinafter called the "Original Indenture"), to provide for the issue of an unlimited amount of debentures, notes and/or other debt obligations of the Company (hereinafter referred to as the "Securities"), the terms of which are to be determined as set forth in Section 2.3 of the Original Indenture; and WHEREAS, Section 8.1 of the Original Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of setting forth the terms of Securities of any series; and WHEREAS, the Company desires to create a series of the Securities in an aggregate principal amount of $300,000,000 to be designated the "8-1/8% Debentures due June 15, 2017" (the "Debentures"), and all action on the part of the Company necessary to authorize the issuance of the Debentures under the Original Indenture and this Fourth Supplemental Indenture (the "Supplemental Indenture") has been duly taken; and WHEREAS, all acts and things necessary to make the Debentures, when executed by the Company and authenticated and delivered by the Trustee as in the Original Indenture provided, the valid and binding obligations of the Company, and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed; NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, and of the acceptance of this trust by the Trustee, and of the sum of one dollar to the Company duly paid by the Trustee at the execution and delivery of these presents, and of other valuable consideration the receipt whereof is hereby acknowledged and in order to authorize the authentication and delivery of and to set forth the terms of the Debentures. IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the parties hereto, for the benefit of holders of the Debentures issued under the Original Indenture, as follows: ARTICLE 1. TERMS AND ISSUANCE OF 8-1/8% DEBENTURES DUE JUNE 15, 2017 Section 1.1. Issue of Debentures. A series of Securities which shall be designated the "8- 1/8% Debentures due June 15, 2017" shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of the Original Indenture, including without limitation the terms set forth in this Supplemental Indenture (including the form of Debentures set forth in Section 1.3 hereof). The aggregate principal amount of Debentures which may be authenticated and delivered under the Original Indenture shall not, except as permitted by the provisions of Sections 2.8, 2.9, 2.11, 8.5 and 12.3 of the Original 3 Indenture, exceed $300,000,000. The entire amount of Debentures may forthwith be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered to or upon the order of the Company pursuant to Section 2.4 of the Original Indenture. Section 1.2. Registered Global Securities. Except as otherwise expressly provided in the Original Indenture, all the Securities issued pursuant to this Supplemental Indenture shall be issued as a single Registered Global Security and no Securities issued pursuant to this Supplemental Indenture will be unregistered; provided, however, that notwithstanding the foregoing, all Securities issued under this Supplemental Indenture on or before November 4, 1999 may be issued originally as a single Registered Security, registered in the name of Tenneco Inc. The Registered Global Security shall bear the following Legend (the "Legend"): "Unless this certificate is presented by an authorized representative of a Depositary to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of the nominee of such Depositary or such other name as requested by an authorized representative of such Depositary and any payment is made to the nominee of such Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, the nominee, has an interest herein." The initial Depositary (as defined in the Original Indenture) for such Registered Global Security shall be The Depository Trust Company. Each Depositary must, at the time of its designation and at all times it serves as a depositary, be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and any other applicable statute or regulation. The Company shall execute and the Trustee shall, in accordance with Section 2.4 of the Original Indenture and the Issuer Order (as defined in the Original Indenture) with respect to the Debentures, authenticate and deliver the single Registered Global Security that (i) shall represent and shall be denominated in the amount equal to the aggregate principal amount of all the Debentures to be represented by the Registered Global Security, (ii) shall be registered in the name of the Depositary for the Registered Global Security or the nominee of the Depositary, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instructions and (iv) shall bear the Legend on the reverse of each of the Debentures. Section 1.3. Forms of Debentures and Authentication Certificate. The forms of the Debentures and the Trustee's certificate of authentication shall be substantially as follows: [FORM OF FACE OF DEBENTURE] TENNECO PACKAGING INC. 8-1/8% DEBENTURE DUE JUNE 15, 2017 No. CUSIP $____________ Tenneco Packaging Inc., a corporation organized and existing under the laws of the State of Delaware (hereinafter called the "Company," which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to __________ or registered assigns, the sum of __________ Dollars on June 15, 2017, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered holder hereof as hereinafter -2- 4 provided interest thereon at the rate per annum specified in the title hereof in like coin or currency, from the June 15 or December 15 next preceding the date hereof to which interest has been paid, unless the date hereof is a June 15 or December 15 to which interest on the Debenture has been paid, in which case from the date hereof, or unless no interest has been paid on the Debentures since the original issue date (hereinafter referred to) of this Debenture, in which case from the original issue date semi-annually on June 15 and December 15 in each year commencing December 15, 1999, until payment of said principal sum has been made or duly provided for, and to pay interest on any overdue principal and (to the extent permitted by law) on any overdue installment of interest at the rate of 8-1/8% per annum. Notwithstanding the foregoing, when there is no existing default in the payment of interest on the Debenture if the date hereof is after June 1 or December 1 and prior to the following June 15 or December 15, as the case may be, this Debenture shall bear interest from such June 15 or December 15, or, if no interest has been paid on the Debentures since the original issue date of this Debenture, from the original issue date; provided however, that if the Company shall default in the payment of interest due on such June 15 or December 15 then this Debenture shall bear interest from the June 15 or December 15 to which interest has been paid or if no interest has been paid on the Debentures since the original issue date of this Debenture, from the original issue date. The interest so payable on any June 15 or December 15 will, subject to certain exceptions provided in the Indenture hereinafter referred to, be paid to the person in whose name this Debenture is registered at the close of business on the June 1 or December 1, as the case may be, next preceding such June 15 or December 15, or if such June 1 or December 1 is not a business day, the business day next preceding such June 1 or December 1. Interest on this Debenture shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Both principal of and interest on this Debenture are payable at the principal office of the Trustee in the Borough of Manhattan, The City of New York, New York; provided, however, that payment of interest may be made, at the option of the Company, by check mailed to the address of the person entitled thereto as such address shall appear on the Debenture register. The original issue date in respect of the Debentures is ______, - -----. ADDITIONAL PROVISIONS OF THIS DEBENTURE ARE CONTAINED ON THE REVERSE HEREOF AND SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. This Debenture shall not be entitled to any benefit under the Indenture hereinafter referred to, or become valid or obligatory for any purpose, until the Trustee under the Indenture shall have signed the form of certificate of authentication endorsed hereon. In Witness Whereof, Tenneco Packaging Inc. has caused this Instrument to be signed in its name by its Chairman of the Board or its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by its Secretary or an Assistant Secretary. Dated: ___________________ -3- 5 Tenneco Packaging Inc. By___________________________________ President Attest: - --------------------------------------- Secretary [FORM OF REVERSE OF DEBENTURE] TENNECO PACKAGING INC. 8-1/8% DEBENTURE DUE JUNE 15, 2017 This Debenture is one of a duly authorized issue of Debentures of the Company known as its 8-1/8% Debentures due June 15, 2017 (herein called the "Debentures"), limited to the aggregate principal amount of $300,000,000, all issued under and equally entitled to the benefits of an Indenture (herein, together with any amendments and supplements thereto, including without limitation the form and terms of Securities issued pursuant thereto, called the "Indenture"), dated as of September 29, 1999, executed by the Company to The Chase Manhattan Bank (herein, together with any successor thereto, called the "Trustee"), as Trustee, to which Indenture reference is hereby made for a statement of the rights thereunder of the Trustee and of the registered holders of the Debentures and of the duties thereunder of the Trustee and the Company. The Debentures will be redeemable as a whole or in part, at the option of the Company at any time, at a redemption price equal to the greater of (i) 100% of their principal amount and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 20 basis points, plus accrued and unpaid interest to the date of redemption. "Treasury Yield" means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. "Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Debentures that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Debentures. -4- 6 "Independent Investment Banker" means Morgan Stanley & Co. Incorporated or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee. "Comparable Treasury Price" means, with respect to any redemption date, (i) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption date. "Reference Treasury Dealer" means each of Morgan Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Lehman Brothers, Inc. and Salomon Smith Barney Inc.; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer. Holders of Debentures to be redeemed will receive notice thereof by first-class mail at least 30 and not more than 60 days prior to the date fixed for redemption. The Indenture permits the Company to issue unsecured debentures, notes, and/or other evidences of indebtedness is one or more series ("Securities") up to such principal amount or amounts as may be authorized in accordance with the terms of the Indenture. To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture and of the rights and obligations of the Company and of the holders of the Debentures may be made with the consent of the Company and with the consent of the holders of not less than a majority in principal amount of the Securities of all series then outstanding under the Indenture (treated as a single class) which are affected by the modification or amendment thereto; provided, however, that without the consent of the holder hereof no such modification or alteration shall be made which will affect the terms of payment of the principal of or interest on this Debenture. In case a default, as defined in the Indenture, shall occur, the principal of all the Debentures at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Debentures outstanding in the case of payment defaults on the Debentures and in certain other events by the holders of a majority in principal amount of the Securities of all series then outstanding under the Indenture (treated as a single class) which are affected thereby. -5- 7 The Indenture provides that no holder of any Debenture may enforce any remedy under the Indenture except in the case of refusal or neglect of the Trustee to act after notice of default and after request by the holders of a majority in principal amount of the outstanding Debentures in certain events (and in certain other events by the holders of a majority in principal amount of the Securities of all series then outstanding under the Indenture, treated as a single class, which are affected thereby) and the offer to the Trustee of security and indemnity satisfactory to it; provided, however, that such provision shall not prevent the holder herein from enforcing payment of the principal of or interest on this Debenture. Unless this certificate is presented by an authorized representative of a Depositary to the Issuer, its agent for registration of transfer, exchange or payments, and any certificate issued is registered in the name of the nominee of such Depositary or such other name as requested by an authorized representative of such Depositary and any payment is made to the nominee of such Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, the nominee, has an interest herein. The Company, the Trustee, any paying agent and any Registrar of the Debentures may deem and treat the person in whose name this Debenture is registered as the absolute owner hereof for all purposes whatsoever, and neither the Company nor the Trustee nor any paying agent nor any Registrar of Debentures shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on, this Debenture, or for any claim based hereon or on the Indenture, against any incorporator or against any stockholder, director or officer, as such, past present or future, of the Company, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Debenture and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture, provided, however, that nothing herein or in the Indenture contained shall be taken to prevent recourse to and the enforcement of the liability, if any, of any stockholder or subscribed to capital stock of the Company upon or in respect of shares of capital stock not fully paid up. All terms used in this Debenture which are defined in the Indenture shall have the meanings assigned to them in the Indenture. [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Debenture is one of 8-1/8% Debentures due June 15, 2017 described in the within-mentioned Indenture. -6- 8 THE CHASE MANHATTAN BANK, Trustee By__________________________________ Authorized Officer ARTICLE 2. MISCELLANEOUS Section 2.1. Execution as Supplemental Indenture. This Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Supplemental Indenture forms a part thereof. Except as herein expressly otherwise defined, the use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture. Section 2.2. Responsibility for Recitals, Etc. The recitals herein and in the Debentures (except in the Trustee's certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture or of the Debentures. The Trustee shall not be accountable for the use or application by the Company of the Debentures or of the proceeds thereof. Section 2.3. Additional Amounts. The Company will not pay any additional amounts on the Debentures held by a person who is not a U.S. Person (as defined in the Original Indenture) in respect of any tax, assessment or governmental charge withheld or deducted. Section 2.4. Provisions Binding on Company's Successors. All the covenants, stipulations, promises and agreements in this Supplemental Indenture contained by the Company shall bind its successors and assigns whether so expressed or not. Section 2.5. NEW YORK CONTRACT. THIS SUPPLEMENTAL INDENTURE AND EACH DEBENTURE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. Section 2.6. Execution and Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original but such counterparts shall together constitute but one and the same instrument. -7- 9 IN WITNESS WHEREOF, said TENNECO PACKAGING INC. has caused this Supplemental Indenture to be executed in its corporate name by its Chairman of the Board or its President or one of its Vice Presidents, and said THE CHASE MANHATTAN BANK has caused this Supplemental Indenture to be executed in its corporate name by one of its Vice Presidents as of November 4, 1999. TENNECO PACKAGING INC. By /s/ Karen R. Osar -------------------------------- Name: Karen R. Osar Title: Vice President and Treasurer THE CHASE MANHATTAN BANK By /s/ Ronald J. Halleran -------------------------------- Name: Ronald J. Halleran Title: Assistant Vice President -8- EX-4.3(F) 12 FIFTH SUPPLEMENTAL INDENTURE 1 EXHIBIT 4.3(f) ================================================================================ TENNECO PACKAGING INC. AND THE CHASE MANHATTAN BANK, as Trustee --------------------- Fifth Supplemental Indenture Dated as of November 4, 1999 TO Indenture Dated as of September 29, 1999 --------------------- Providing for the issuance of 8-3/8% Debentures due 2027 ================================================================================ 2 FIFTH SUPPLEMENTAL INDENTURE dated as of November 4, 1999 between TENNECO PACKAGING INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as trustee (hereinafter called the "Trustee"). WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture dated as of September 29, 1999 (hereinafter called the "Original Indenture"), to provide for the issue of an unlimited amount of debentures, notes and/or other debt obligations of the Company (hereinafter referred to as the "Securities"), the terms of which are to be determined as set forth in Section 2.3 of the Original Indenture; and WHEREAS, Section 8.1 of the Original Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of setting forth the terms of Securities of any series; and WHEREAS, the Company desires to create a series of the Securities in an aggregate principal amount of $200,000,000 to be designated the "8-3/8% Debentures due 2027" (the "Debentures"), and all action on the part of the Company necessary to authorize the issuance of the Debentures under the Original Indenture and this Fifth Supplemental Indenture (the "Supplemental Indenture") has been duly taken; and WHEREAS, all acts and things necessary to make the Debentures, when executed by the Company and authenticated and delivered by the Trustee as in the Original Indenture provided, the valid and binding obligations of the Company, and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed; NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, and of the acceptance of this trust by the Trustee, and of the sum of one dollar to the Company duly paid by the Trustee at the execution and delivery of these presents, and of other valuable consideration the receipt whereof is hereby acknowledged and in order to authorize the authentication and delivery of and to set forth the terms of the Debentures. IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the parties hereto, for the benefit of holders of the Debentures issued under the Original Indenture, as follows: ARTICLE 1. TERMS AND ISSUANCE OF 8-3/8% DEBENTURES DUE 2027 Section 1.1. Issue of Debentures. A series of Securities which shall be designated the "8-3/8% Debentures due 2027" shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of the Original Indenture, including without limitation the terms set forth in this Supplemental Indenture (including the form of Debentures set forth in Section 1.3 hereof). The aggregate principal amount of Debentures which may be authenticated and delivered under the Original Indenture shall not, except as permitted by the provisions of Sections 2.8, 2.9, 2.11, 8.5 and 12.3 of the Original 3 Indenture, exceed $200,000,000. The entire amount of Debentures may forthwith be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered to or upon the order of the Company pursuant to Section 2.4 of the Original Indenture. Section 1.2. Registered Global Securities. Except as otherwise expressly provided in the Original Indenture, all the Securities issued pursuant to this Supplemental Indenture shall be issued as a single Registered Global Security and no Securities issued pursuant to this Supplemental Indenture will be unregistered; provided, however, that notwithstanding the foregoing, all Securities issued under this Supplemental Indenture on or before November 4, 1999 may be issued originally as a single Registered Security, registered in the name of Tenneco Inc. The Registered Global Security shall bear the following Legend (the "Legend"): "Unless this certificate is presented by an authorized representative of a Depositary to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of the nominee of such Depositary or such other name as requested by an authorized representative of such Depositary and any payment is made to the nominee of such Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, the nominee, has an interest herein." The initial Depositary (as defined in the Original Indenture) for such Registered Global Security shall be The Depository Trust Company. Each Depositary must, at the time of its designation and at all times it serves as a depositary, be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and any other applicable statute or regulation. The Company shall execute and the Trustee shall, in accordance with Section 2.4 of the Original Indenture and the Issuer Order (as defined in the Original Indenture) with respect to the Debentures, authenticate and deliver the single Registered Global Security that (i) shall represent and shall be denominated in the amount equal to the aggregate principal amount of all the Debentures to be represented by the Registered Global Security, (ii) shall be registered in the name of the Depositary for the Registered Global Security or the nominee of the Depositary, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instructions and (iv) shall bear the Legend on the reverse of each of the Debentures. Section 1.3. Forms of Debentures and Authentication Certificate. The forms of the Debentures and the Trustee's certificate of authentication shall be substantially as follows: [FORM OF FACE OF DEBENTURE] TENNECO PACKAGING INC. 8-3/8% DEBENTURE DUE 2027 No. CUSIP $_____________ Tenneco Packaging Inc., a corporation organized and existing under the laws of the State of Delaware (hereinafter called the "Company," which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to -2- 4 ______________ or registered assigns, the sum of __________ Dollars on April 15, 2027, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay to the registered holder hereof as hereinafter provided interest thereon at the rate per annum specified in the title hereof in like coin or currency, from the April 15 or October 15 next preceding the date hereof to which interest has been paid, unless the date hereof is an April 15 or October 15 to which interest on the Debentures has been paid, in which case from the date hereof, or unless no interest has been paid on the Debentures since the original issue date (hereinafter referred to) of this Debenture, in which case from the original issue date, semi-annually on April 15 and October 15 in each year commencing April 15, 2000, until payment of said principal sum has been made or duly provided for, and to pay interest on any overdue principal and (to the extent permitted by law) on any overdue installment of interest at the rate of 8-3/8% per annum. Notwithstanding the foregoing, when there is no existing default in the payment of interest on the Debentures, if the date hereof is after April 1 or October 1 and prior to the following April 15 or October 15, as the case may be, this Debenture shall bear interest from such April 15 or October 15, or, if no interest has been paid on the Debentures since the original issue date of this Debenture, from the original issue date; provided, however, that if the Company shall default in the payment of interest due on such April 15 or October 15, then this Debenture shall bear interest from the April 15 or October 15 to which interest has been paid or, if no interest has been paid on the Debentures since the original issue date of this Debenture, from the original issue date. The interest so payable on any April 15 or October 15 will, subject to certain exceptions provided in the Indenture hereinafter referred to, be paid to the person in whose name this Debenture is registered at the close of business on the April 1 or October 1, as the case may be, next preceding such April 15 or October 15, or if such April 1 or October 1 is not a business day, the business day next preceding such April 1 or October 1. Interest on this Debenture shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Both principal of and interest on this Debenture are payable at the principal office of the Trustee in the Borough of Manhattan, The City of New York, New York; provided, however, that payment of interest may be made, at the option of the Company, by check mailed to the address of the person entitled thereto as such address shall appear on the Debenture register. The original issue date in respect of the Debentures is ________, - ----------. ADDITIONAL PROVISIONS OF THIS DEBENTURE ARE CONTAINED ON THE REVERSE HEREOF AND SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. This Debenture shall not be entitled to any benefit under the Indenture hereinafter referred to, or become valid or obligatory for any purpose, until the Trustee under the Indenture shall have signed the form of certificate of authentication endorsed hereon. In Witness Whereof, Tenneco Packaging Inc. has caused this Instrument to be signed in its name by its Chairman of the Board or its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by its Secretary or an Assistant Secretary. Dated: _______________________ -3- 5 Tenneco Packaging Inc. By________________________________________ President Attest: - -------------------------- Secretary [FORM OF REVERSE OF DEBENTURE] TENNECO PACKAGING INC. 8-3/8% DEBENTURE DUE 2027 This Debenture is one of a duly authorized issue of Debentures of the Company known as its 8-3/8% Debentures due 2027 (herein called the "Debentures"), limited to the aggregate principal amount of $200,000,000, all issued under and equally entitled to the benefits of an Indenture (herein, together with any amendments and supplements thereto, including without limitation the form and terms of Securities issued pursuant thereto, called the "Indenture"), dated as of September 29, 1999, executed by the Company to The Chase Manhattan Bank (herein, together with any successor thereto, called the "Trustee"), as Trustee, to which Indenture reference is hereby made for a statement of the rights thereunder of the Trustee and of the registered holders of the Debentures and of the duties thereunder of the Trustee and the Company. The Debentures will be redeemable as a whole or in part, at the option of the Company at any time, at a redemption price equal to the greater of (i) 100% of their principal amount and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 25 basis points, plus accrued and unpaid interest to the date of redemption. "Treasury Yield" means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. "Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Debentures that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Debentures. -4- 6 "Independent Investment Banker" means Morgan Stanley & Co. Incorporated or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee. "Comparable Treasury Price" means, with respect to any redemption date, (i) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption date. "Reference Treasury Dealer" means each of Morgan Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Lehman Brothers, Inc. and Salomon Smith Barney Inc.; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer. Holders of Debentures to be redeemed will receive notice thereof by first-class mail at least 30 and not more than 60 days prior to the date fixed for redemption. The Indenture permits the Company to issue unsecured debentures, notes, and/or other evidences of indebtedness in one or more series ("Securities") up to such principal amount or amounts as may be authorized in accordance with the terms of the Indenture. To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture and of the rights and obligations of the Company and of the holders of the Debentures may be made with the consent of the Company and with the consent of the holders of not less than a majority in principal amount of the Securities of all series then outstanding under the Indenture (treated as a single class) which are affected by the modification or amendment thereto, provided, however, that without the consent of the holder hereof no such modification or alteration shall be made which will affect the terms of payment of the principal of or interest on this Debenture. In case a default, as defined in the Indenture, shall occur, the principal of all the Debentures at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Debentures outstanding in the case of payment defaults on the Debentures and in certain other events by the holders of a majority in principal amount of the Securities of all series then outstanding under the Indenture (treated as a single class) which are affected thereby. -5- 7 The Indenture provides that no holder of any Debenture may enforce any remedy under the Indenture except in the case of refusal or neglect of the Trustee to act after notice of default and after request by the holders of a majority in principal amount of the outstanding Debentures in certain events (and in certain other events by the holders of a majority in principal amount of the Securities of all series then outstanding under the Indenture, treated as a single class, which are affected thereby) and the offer to the Trustee of security and indemnity satisfactory to it; provided, however, that such provision shall not prevent the holder hereof from enforcing payment of the principal of or interest on this Debenture. Unless this certificate is presented by an authorized representative of a Depositary to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of the nominee of such Depositary or such other name as requested by an authorized representative of such Depositary and any payment is made to the nominee of such Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, the nominee, has an interest herein. The Company, the Trustee, any paying agent and any Registrar of the Debentures may deem and treat the person in whose name this Debenture is registered as the absolute owner hereof for all purposes whatsoever, and neither the Company nor the Trustee nor any paying agent nor any Registrar of the Debentures shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on, this Debenture, or for any claim based hereon or on the Indenture, against any incorporator or against any stockholder, director or officer, as such, past, present or future, of the Company, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Debenture and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture; provided, however, that nothing herein or in the Indenture contained shall be taken to prevent recourse to and the enforcement of the liability, if any, of any stockholder or subscriber to capital stock of the Company upon or in respect of shares of capital stock not fully paid up. All terms used in this Debenture which are defined in the Indenture shall have the meanings assigned to them in the Indenture. [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Debenture is one of 8-3/8% Debentures due 2027 described in the within-mentioned Indenture. -6- 8 THE CHASE MANHATTAN BANK, Trustee By_________________________ Authorized Officer ARTICLE 2. MISCELLANEOUS Section 2.1. Execution as Supplemental Indenture. This Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Supplemental Indenture forms a part thereof. Except as herein expressly otherwise defined, the use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture. Section 2.2. Responsibility for Recitals, Etc. The recitals herein and in the Debentures (except in the Trustee's certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture or of the Debentures. The Trustee shall not be accountable for the use or application by the Company of the Debentures or of the proceeds thereof. Section 2.3. Additional Amounts. The Company will not pay any additional amounts on the Debentures held by a person who is not a U.S. Person (as defined in the Original Indenture) in respect of any tax, assessment or governmental charge withheld or deducted. Section 2.4. Provisions Binding on Company's Successors. All the covenants, stipulations, promises and agreements in this Supplemental Indenture contained by the Company shall bind its successors and assigns whether so expressed or not. Section 2.5. NEW YORK CONTRACT. THIS SUPPLEMENTAL INDENTURE AND EACH DEBENTURE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. Section 2.6. Execution and Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original but such counterparts shall together constitute but one and the same instrument. -7- 9 IN WITNESS WHEREOF, said TENNECO PACKAGING INC. has caused this Supplemental Indenture to be executed in its corporate name by its Chairman of the Board or its President or one of its Vice Presidents, and said THE CHASE MANHATTAN BANK has caused this Supplemental Indenture to be executed in its corporate name by one of its Vice Presidents as of November 4, 1999. TENNECO PACKAGING INC. By /s/ Karen R. Osar ---------------------------------- Name: Karen R. Osar Title: Vice President and Treasurer THE CHASE MANHATTAN BANK By /s/ Ronald J. Halleran ---------------------------------- Name: Ronald J. Halleran Title: Assistant Vice President -8- EX-4.4 13 REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT 4.4 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (the "Agreement") is dated as of November 4, 1999, by and between Tenneco Packaging Inc., a Delaware corporation (the "Company"), and certain individuals as trustee (collectively, the "Trustee") under that certain Tenneco Packaging Inc. (now Pactiv Corporation) Rabbi Trust, dated as of November 2, 1999 (the "Trust"). WHEREAS, the Company and the Trustee have established the Trust to hold assets until certain amounts are paid to participants under certain designated nonqualified deferred compensation plan(s) and supplemental pension arrangements; and WHEREAS, in connection with entering into the Trust, the Company has agreed to provide the registration rights set forth in this Agreement for the benefit of the Trust; and WHEREAS, the parties desire to enter into this Agreement to set forth their agreement regarding certain registration rights with respect to the Common Stock of the Company (and any other securities issued in respect thereof or in exchange therefor) held by the Trust. NOW, THEREFORE, the parties hereto agree as follows: 1. Demand Registrations. (a) Upon written notice by the Trustee to the Company at any time and from time to time after the date hereof requesting that the Company effect the registration under the Securities Act of 1933 (the "Securities Act") of any or all of the securities of the Company now or hereafter held by the Trust (or such shares or other securities into which or for which such securities are changed, converted or exchanged upon any reclassification, share combination, share subdivision, share dividend, share exchange, merger, consolidation or similar transaction or event, together with such shares or other securities received through dividends, reinvestment of dividends or otherwise) (the "Registrable Securities"), which notice shall specify the intended method(s) of disposition of such Registrable Securities, the Company shall use its best efforts to effect the registration under the Securities Act and applicable state securities laws of such Registrable Securities for disposition in accordance with such intended method(s) of disposition. (b) Notwithstanding any other provision of this Agreement to the contrary, a registration requested by the Trustee shall not be deemed to have been effected: (i) unless it has become effective, (ii) if after it has become effective such registration is interfered with by any 2 stop order, injunction or other order or requirement of the Securities and Exchange Commission ("SEC") or other governmental agency or court for any reason other than a misrepresentation or an omission by the Trustee and, as a result thereof, the Registrable Securities requested to be registered cannot be completely distributed in accordance with the plan of distribution set forth in the registration statement or (iii) if the conditions to closing specified in any purchase agreement or underwriting agreement entered into in connection with any such registration are not satisfied or waived other than by reason of some act or omission by the Trustee. (c) In the event that any registration pursuant to this Section shall involve, in whole or in part, an underwritten offering, the Trustee shall have the right to designate an underwriter or underwriters as the lead or managing underwriters of such underwritten offering and, in connection with each registration, the Trustee may select counsel to represent the Trustee. (d) As to any particular Registrable Securities, such Registrable Securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale by the Trust shall have been declared effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) such securities shall have been distributed to the public in accordance with Rule 144 promulgated under the Securities Act ("Rule 144"), or (iii) such securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent disposition of them shall not require registration or qualification of them under the Securities Act or any state securities or blue sky law then in effect. 2. Expenses. The Company shall pay any and all expenses incident to performance of or compliance with each registration of securities pursuant to this Agreement, including, without limitation, (i) the fees, disbursements and expenses of the Company's counsel and accountants and the fees, disbursements and expenses of counsel selected by the Trust in accordance with this Agreement in connection with the registration of the securities to be disposed of; (ii) all expenses, including filing fees, in connection with the preparation, printing and filing of the registration statement, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements thereto and the mailing and delivering of copies thereof to any underwriters and dealers; (iii) the cost of printing or producing any underwriting agreements and blue sky or legal investment memoranda and any other documents in connection with the offering, sale or delivery of the securities to be disposed of; (iv) all expenses in connection with the qualification of the securities to be disposed of for offering and sale under state securities laws, including the fees, disbursements and expenses of counsel for the underwriters or the Trustee in connection with such qualification and in connection with any blue sky and legal investment surveys; (v) the filing fees incident to securing any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the securities to be disposed of; (vi) transfer agents' and registrars' fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering; (vii) all security engraving and security printing expenses; (viii) all fees, disbursements and expenses payable in connection with the listing of the securities on any securities exchange or automated interdealer quotation -2- 3 system or the rating of such securities, (ix) any other fees, disbursements and expenses of underwriters customarily paid by the sellers of securities, and underwriting discounts and commissions and transfer taxes, if any, and (x) other out-of-pocket expenses of the Trust. Notwithstanding the foregoing, each of the Trust and the Company shall be responsible for its own internal administrative and similar costs. 3. Registration and Qualification. If and whenever the Company is required to effect the registration of any Registrable Securities under the Securities Act as provided in Section 1, the Company shall as promptly as practicable: (a) prepare, file and use its reasonable best efforts to cause to become effective a registration statement under the Securities Act relating to the Registrable Securities to be offered; (b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities until the earlier of (A) such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition set forth in such registration statement and (B) the expiration of six months after such registration statement becomes effective; provided, that such six-month period shall be extended for such number of days that equals the number of days elapsing from (x) the date the written notice contemplated by paragraph (f) below is given by the Company to (y) the date on which the Company delivers to the Trustee the supplement or amendment contemplated by paragraph (f) below; (c) furnish to the Trustee and to any underwriter of such Registrable Securities such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act, such documents incorporated by reference in such registration statement or prospectus, and such other documents, as the Trustee or such underwriter may reasonably request, and upon request a copy of any and all transmittal letters or other correspondence to or received from, the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering; (d) use its reasonable best efforts to register or qualify all Registrable Securities covered by such registration statement under the securities or blue sky laws of such U.S. jurisdictions as the Trustee or any underwriter to such Registrable Securities shall request, and use its reasonable best efforts to obtain all appropriate registrations, permits and consents in connection therewith, and do any and all other acts and things which may be necessary or advisable to enable the Trustee or any such underwriter to consummate the disposition in such -3- 4 jurisdictions of its Registrable Securities covered by such registration statement; (e) (i) furnish to the Trustee and to any underwriter of such Registrable Securities an opinion of counsel for the Company addressed to the Trustee and dated the date of the closing under the underwriting agreement (if any) (or if such offering is not underwritten, dated the effective date of the registration statement) and (ii) furnish to the Trustee and to any underwriter of such Registrable Securities a "cold comfort" letter addressed to the Trustee and signed by the independent public accountants who have audited the financial statements of the Company included in such registration statement, in each such case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to underwriters in underwritten public offerings of securities and such other matters as the Trustee may reasonably request and, in the case of such accountants' letter, with respect to events subsequent to the date of such financial statements; (f) as promptly as practicable, notify the Trustee in writing (i) at any time when a prospectus relating to a registration pursuant to Section 1 is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (ii) of any request by the SEC or any other regulatory body or other body having jurisdiction for any amendment of or supplement to any registration statement or other document relating to such offering, and in either such case, at the request of the Trustee, prepare and furnish to the Trustee a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading; (g) if requested by the Trustee or the lead or managing underwriters, use its best efforts to list all such Registrable Securities covered by such registration on each securities exchange and automated inter-dealer quotation system on which a class of common equity securities of the Company is then listed; and (h) furnish for delivery in connection with the closing of any offering of Registrable Securities pursuant to a registration effected pursuant to Sections 1 or 2 unlegended certificates representing ownership of the Registrable Securities being sold in such denominations as shall be requested by the Trustee or the underwriters. 4. Underwriting; Due Diligence. (a) If requested by the underwriters for any underwritten offering of -4- 5 Registrable Securities pursuant to a registration requested under this Agreement, the Company shall enter into an underwriting agreement with such underwriters for such offering, which agreement will contain such representations and warranties by the Company and such other terms and provisions as are customarily contained in underwriting agreements of the Company to the extent relevant and as are customarily contained in underwriting agreements generally with respect to secondary distributions to the extent relevant, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 5(a), and agreements as to the provision of opinions of counsel and accountants' letters to the effect and to the extent provided in Section 3(e). The Trust shall be a party to any such underwriting agreement and the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters, shall also be made to and for the benefit of the Trust. Such underwriting agreement shall also contain such representations and warranties by the Trust and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, when relevant, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 5(b). (b) In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act pursuant to this Agreement, the Company shall give the Trustee and the underwriters, if any, and their respective counsel and accountants, such access to its books and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified the financial statements of the Company as shall be necessary, in the opinion of the Trustee and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. 5. Indemnification and Contribution. (a) In the case of each offering of Registrable Securities made pursuant to this Agreement, the Company agrees to indemnify and hold harmless, to the extent permitted by law, the Trustee, the Trust, each underwriter of Registrable Securities so offered and each individual or entity (each a "Person"), if any, who controls any of the foregoing Persons within the meaning of the Securities Act and the officers, directors, affiliates, employees and agents of each of the foregoing, against any and all losses, liabilities, costs (including reasonable attorney's fees and disbursements), claims and damages, joint or several, to which they or any of them may become subject, under the Securities Act or otherwise, including any amount paid in settlement of any litigation commenced or threatened, insofar as such losses, liabilities, costs, claims and damages (or actions or proceedings in respect thereof, whether or not such indemnified Person is a party thereto) arise out of or are based upon any untrue statement by the Company or alleged untrue statement by the Company of a material fact contained in the registration statement (or in any preliminary or final prospectus included therein) or in any offering memorandum or other offering document relating to the offering and sale of such Registrable Securities prepared by the Company or at its direction, or any amendment thereof or supplement thereto, or in any -5- 6 document incorporated by reference therein, or any omission by the Company or alleged omission by the Company to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided that the Company shall not be liable to any Person in any such case to the extent that any such loss, liability, cost, claim or damage arises out of or relates to any untrue statement or alleged untrue statement, or any omission or alleged omission, if such statement or omission shall have been made in reliance upon and in conformity with information relating to the Trust or an underwriter furnished in writing to the Company by or on behalf of the Trust or such underwriter specifically for use in the registration statement (or in any preliminary or final prospectus included therein), offering memorandum or other offering document, or any amendment thereof or supplement thereto. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Trust or any underwriter and shall survive the transfer of such securities. The foregoing indemnity agreement is in addition to any liability that the Company may otherwise have to the Trust or any underwriter of the Registrable Securities or any controlling Person of the foregoing and the officers, directors, affiliates, employees and agents of each of the foregoing; provided, further, that, in the case of an offering with respect to which the Trust has designated the lead or managing underwriters (or the Trust is offering Registrable Securities directly, without an underwriter), this indemnity does not apply to any loss, liability, cost, claim or damage arising out of or relating to any untrue statement or alleged untrue statement or omission or alleged omission in any preliminary prospectus or offering memorandum if a copy of a final prospectus or offering memorandum was not sent or given by or on behalf of any underwriter (or the Trust) to such Person asserting such loss, liability, cost, claim or damage at or prior to the written confirmation of the sale of the Registrable Securities as required by the Securities Act and such untrue statement or omission had been corrected in such final prospectus or offering memorandum. (b) In the case of each offering made pursuant to this Agreement, the Trust, by exercising its registration rights hereunder, agrees to indemnify and hold harmless, and to cause each underwriter of Registrable Securities included in such offering (in the same manner and to the same extent as set forth in Section 5(a)) to agree to indemnify and hold harmless, the Company, each other underwriter who participates in such offering, each other holder with securities included in such offering, each Person, if any, who controls any of the foregoing within the meaning of the Securities Act and the officers, directors, affiliates, employees and agents of each of the foregoing, against any and all losses, liabilities, costs (including reasonable attorney's fees and disbursements), claims and damages to which they or any of them may become subject, under the Securities Act or otherwise, including any amount paid in settlement of any litigation commenced or threatened, insofar as such losses, liabilities, costs, claims and damages (or actions or proceedings in respect thereof, whether or not such indemnified Person is a party thereto) arise out of or are based upon any untrue statement or alleged untrue statement by the Trustee or underwriter, as the case may be, of a material fact contained in the registration statement (or in any preliminary or final prospectus included therein) or in any offering memorandum or other offering document relating to the offering and sale of such Registrable Securities prepared by the Company or at its direction, or any amendment thereof or supplement -6- 7 thereto, or any omission by the Trust or underwriter, as the case may be, or alleged omission by the Trustee or underwriter, as the case may be, of a material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that such untrue statement of a material fact is contained in, or such material fact is omitted from, information relating to the Trust or underwriter, as the case may be, furnished in writing to the Company by or on behalf of the Trust or underwriter, as the case may be, specifically for use in such registration statement (or in any preliminary or final prospectus included therein), offering memorandum or other offering document, or any amendment thereof or supplement thereto. The foregoing indemnity is in addition to any liability which the Trust or underwriter, as the case may be, may otherwise have to the Company, or controlling persons and the officers, directors, affiliates, employees, and agents of each of the foregoing; provided that, in the case of an offering made pursuant to this Agreement with respect to which the Company has designated the lead or managing underwriters (or the Company is offering securities directly, without an underwriter), this indemnity does not apply to any loss, liability, cost, claim, or damage arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission in any preliminary prospectus or offering memorandum if a copy of a final prospectus or offering memorandum was not sent or given by or on behalf of any underwriter (or the Company, as the case may be) to such Person asserting such loss, liability, cost, claim or damage at or prior to the written confirmation of the sale of the Registrable Securities as required by the Securities Act and such untrue statement or omission had been corrected in such final prospectus or offering memorandum. (c) Each party indemnified under paragraph (a) or (b) above shall, promptly after receipt of notice of a claim or action against such indemnified party in respect of which indemnity may be sought hereunder, notify the indemnifying party in writing of the claim or action; provided, that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party on account of the indemnity agreement contained in paragraph (a) or (b) above otherwise than under such subsection. If any such claim or action shall be brought against an indemnified party, and it shall have notified the indemnifying party thereof, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified party and indemnifying parties may exist in respect of such claim, the indemnifying party shall be entitled to participate therein, and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel satisfactory to the indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party). After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 5 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation. If the indemnifying party does not assume the defense of such claim or action, it is understood that the indemnifying party shall not, in connection with any one such claim or action or separate but substantially similar or related claims or actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in -7- 8 addition to one separate firm of local attorneys in each such jurisdiction) at any time for all such indemnified parties. Any indemnifying party against whom indemnity may be sought under this Section 5 shall not be liable to indemnify an indemnified party if such indemnified party settles such claim or action without the consent of the indemnifying party, which consent shall not be unreasonably withheld. (d) If the indemnification provided for in this Section 5 shall for any reason be unavailable (other than in accordance with its terms) to an indemnified party in respect of any loss, liability, cost, claim or damage referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, cost, claim or damage in such proportion as shall be appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other with respect to the statements or omissions which resulted in such loss, liability, cost, claim or damage as well as any other relevant equitable considerations. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the indemnifying party on the one hand or the indemnified party on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission, but not by reference to any indemnified party's stock ownership in the Company. The amount paid or payable by an indemnified party as a result of the loss, cost, claim, damage or liability, or action in respect thereof, referred to above in this paragraph (d) shall be deemed to include, for purposes of this paragraph (d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) Indemnification and contribution similar to that specified in the preceding paragraphs of this Section 5 (with appropriate modifications) shall be given by the Company, the Trust and underwriters with respect to any required registration or other qualification of securities under any state law or regulation or governmental authority. (f) The obligations of the parties under this Section 5 shall be in addition to any liability which any party may otherwise have to any other party. 6. Black-Out Period. The Company agrees not to effect, for itself or on behalf of any other person or entity, any public sale or distribution of any Common Stock or other equity security of the Company, or any securities convertible into or exchangeable or exercisable for such securities, during the period beginning 7 days before, and ending 180 days (or such lesser period as may be permitted by the Trustee) after, the effective date of a registration statement filed in connection with the registration of the Registrable Securities hereunder. Such black-out period shall not apply to public sales or distributions that: (a) have been consented to in writing by the Trustee, or (b) in the opinion of the lead or managing -8- 9 underwriter designated by the Trustee can be effected without an adverse effect on the price, timing or distribution of the Registrable Securities offered pursuant to a registration statement hereunder. In the event the black-out period does not apply pursuant to clauses (a) or (b) hereof, the Company may effect such public sale or distribution only on the terms and conditions (including, without limitation, the amount and timing of the public sale or distribution) established by the Trustee or the underwriter, as the case may be. 7. Rule 144 and Form S-3. (a) The Company shall use its best efforts to ensure that the conditions to the availability of Rule 144 set forth in paragraph (c) thereof shall be satisfied. Upon the request of the Trustee, the Company will deliver to the Trustee a written statement as to whether it has complied with such requirements. (b) The Company shall to use its reasonable efforts to cause all conditions to the availability of Form S-3 (or any successor form) under the Securities Act for the filing of registration statements under this Agreement to be met. 8. Miscellaneous. (a) Entire Agreement. This Agreement constitutes the entire agreement between the Company and the Trustee with respect to the transactions contemplated hereby and supersedes all prior agreements or understandings among the parties with respect thereto. (b) Headings. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. (c) Notices. All notices or other communications provided for in this Agreement shall be in writing and shall be sent by confirmed telecopy (with an undertaking to provide a hard copy) or delivered by hand or sent by overnight courier service prepaid to the address specified below. If to the Company: If to the Trust or Trustee: Tenneco Packaging Inc. Tenneco Packaging Rabbi Trust 1900 West Field Court c/o Tenneco Packaging Inc. Lake Forest, Illinois 60045 1900 West Field Court Attention: General Counsel Lake Forest, Illinois 60045 Attention: General Counsel or to such other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. -9- 10 (d) Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. (e) Successor Trustee and Successor Trust. The Trust and Trustee may assign this Agreement. As used herein, the "Trustee" shall include any and all successor trustees of the Trust, and the "Trust" shall include any and all successor trusts. Each successor trustee and successor trust shall be entitled to the benefits and may enforce this Agreement as if an original party hereto. (f) Amendments. This Agreement shall not be altered or otherwise amended except pursuant to an instrument in writing signed by the Company and the Trustee. (g) Transferability. The registration and other rights granted to the Trust hereunder may be transferred or assigned by the Trust to a third party in connection with a sale or other transfer of all shares of Common Stock then owned by the Trust to such third party. (h) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly executed and delivered as of the date first above written. TENNECO PACKAGING INC. /s/ Richard L. Wambold ------------------------------------------ By: Richard L. Wambold Its: Chief Executive Officer TENNECO PACKAGING INC. RABBI TRUST dated November 2, 1999 ----------- By: /s/ Richard L. Wambold --------------------------------------- Richard L. Wambold, not ------------------ individually but solely as trustee By: /s/ Andrew A. Campbell --------------------------------------- Andrew A. Campbell, not ------------------ individually but solely as trustee By: /s/ Richard C. Mitchell --------------------------------------- Richard C. Mitchell, not ------------------- individually but solely as trustee By: /s/ James V. Faulkner, Jr. --------------------------------------- James V. Faulkner, Jr., not ---------------------- individually but solely as trustee By: /s/ John Potempa --------------------------------------- John Potempa, not ------------ individually but solely as trustee -10- EX-10.4 14 TRADEMARK TRANSITION LICENSE AGREEMENT 1 EXHIBIT 10.4 TRADEMARK TRANSITION LICENSE AGREEMENT THIS TRADEMARK TRANSITION LICENSE AGREEMENT (this "Trademark Transition License Agreement") is made and entered into as of November 4, 1999 (the "Effective Date") by and among Tenneco Automotive Inc. (to be renamed Tenneco Automotive Operating Company Inc.), a Delaware corporation organized and existing under the laws of the State of Delaware, whose principal place of business is located at 500 North Field Drive, Lake Forest, IL 60045 ("Licensor"), and Tenneco Packaging Inc., a Delaware corporation whose principal place of business is located at 1900 West Field Court, Lake Forest, IL 60045 ("Licensee"), and Tenneco Management Company, a corporation organized under the laws of the State of Delaware ("TMC"). WHEREAS, Pursuant to the terms of that certain Distribution Agreement dated November 3, 1999 (the "DISTRIBUTION AGREEMENT"), Licensee and Licensor have agreed to cause this Trademark Transition License Agreement to be entered into regarding the use of certain trademarks by Licensee; WHEREAS, TMC has assigned to Licensor and Licensor has adopted and is using the name and mark "Tenneco," alone and in combination with other terms and/or symbols and variations thereof, in the United States and elsewhere throughout the world and Licensor is the owner of the U.S. Trademark Registrations listed on SCHEDULE A and SCHEDULE B of this Agreement as well as their foreign counterparts listed on SCHEDULE A and SCHEDULE B (hereinafter individually and collectively referred to as the "Trademark"); and WHEREAS, Licensee previously has used the Trademark and is desirous of continuing to use said Trademark in connection with Licensee's current business, including its current goods and services, to assist Licensee during its transition to a new identity and for the limited purposes more fully described below; and NOW, THEREFORE, in consideration of the foregoing Recitals which are hereby incorporated into the operative terms hereof, the mutual promises contained in this Agreement and good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. LICENSE. Licensor grants to Licensee and its Subsidiaries (as such term is defined in the Distribution Agreement), the limited, non-exclusive right to use the Trademark under the common law and under the auspices and privileges provided by any of the registrations covering the same, and Licensee hereby undertakes to use the Trademark, only as follows: a. For a period of sixty (60) days following the Effective Date of this Agreement, Licensee and its Subsidiaries may continue to use the Trademark in their corporate names to the extent (but only to the extent) they are being used therein as of the Effective Date. Within sixty (60) days following the Effective Date, or as soon thereafter as reasonably practical in non-U.S. jurisdictions, Licensee shall change or cause to be changed, if necessary, such corporate names to delete the Trademark or any other word that is confusingly similar to the Trademark. Notwithstanding the foregoing, for a period of up to eighteen (18) months following the Effective Date, Licensee may permit its Subsidiary Tenneco Forest Products S.A. of Romania ("Tenneco -1- 2 Forest") or any successor to Tenneco Forest (the "Tenneco Forest Successor"), as applicable, to continue using the Trademark in its corporate name to the extent (but only to the extent) it is being used therein as of the Effective Date. On or before the end of such 18-month period, Licensee will ensure that Tenneco Forest and any Tenneco Forest Successor, as applicable, deletes the Trademark, or any other word that is confusingly similar to the Trademark, from its corporate name. b. For a period of twelve (12) months following the Effective Date of this Agreement, Licensee and its Subsidiaries shall be entitled to use their supplies and documents which have imprinted thereon the Trademark to the extent (but only to the extent) the Trademark is being used in connection with their supplies and documents as of the Effective Date of this Agreement. Licensee shall not, and shall not permit its Subsidiaries to, print or permit to be printed any supplies or documents bearing the Trademark from and after Agreement.the expiration of such 12-month period. For a period of up to twelve (12) months following the Effective Date, Licensee may permit any Tenneco Forest Successor, as applicable, to use supplies and documents which have imprinted thereon the Trademark to the extent (but only to the extent) the Trademark is being used in connection with Tenneco Forest supplies and documents as of the Effective Date. Licensee shall ensure that any Tenneco Forest Successor does not print or permit to be printed any new supplies or documents bearing the Trademark from and after the expiration of such the period. c. For a period of up to eighteen (18) months following the Effective Date of this Agreement, Licensee and its Subsidiaries may use the Trademark on signs, displays or other identifications or advertising material (other than supplies or documents, which shall be governed by paragraph b above) to the extent (but only to the extent) the Trademark is being used in connection with their signs, displays or other identifications or advertising material as of the Effective Date. Licensee shall not, and shall not permit its Subsidiaries to, prepare, install or otherwise use any signs, displays or other identifications or advertising material bearing the Trademark after the expiration of such period. Licensee shall remove or cause to be removed any and all references to the Trademark from any and all such signs, displays or other identifications or advertising material by the end of such eighteen (18) month period. In addition to the foregoing, Licensee may grant Packaging Corporation of America the extended right under the Trademark Transition License Agreement ("PCA Agreement"), dated April 12, 1999, between Licensee and Packaging Corporation of America ("PCA") to use the Trademark on signs, displays or other identifications, and advertising material, supplies and documents, for a period of up to twelve (12) months following the Effective Date. Also, Licensee may grant any Tenneco Forest Successor, as applicable, the right to use the Trademark on signs, displays, other identifications and advertising material (other than supplies or documents, which shall be governed by paragraph b above) to the extent (but only to the extent ) the Trademark is being used in connection with Tenneco Forest signs, displays or other identifications or advertising material as of the Effective Date, for a period of up to eighteen (18) months following the Effective Date. Licensee shall cause PCA and any Tenneco Forest Successor, as applicable, to remove or cause to be removed any and all references to the Trademark from any and all signs, displays, or other identifications or advertising materials by the end of such periods. 2. CERTAIN TRANSFERS NOT RECORDED. The parties hereby acknowledge that Licensor is the owner of the Trademark registrations and applications for registration identified on SCHEDULE B (the "Packaging Registrations"), although such Packaging Registrations are at the Effective Date registered in the name of TMC. The parties further acknowledge that Licensor does not presently intend to cause such Packaging Registrations to be recorded in the name of Licensor with the applicable United States and foreign trademark registration authority or agency. It is hereby -2- 3 agreed, however, that all costs and fees subsequently incurred by Licensor to record any of the Packaging Registrations shall constitute Transaction Expenses under the Distribution Agreement. 3. QUALITY OF SERVICES. Licensee agrees to maintain and cause its Subsidiaries, PCA and any Tenneco Forest Successor to maintain such quality standards as have been prescribed by Licensor in the conduct of the business operations with which the Trademark has been used by them as of the Effective Date. Licensee shall, and shall cause its Subsidiaries, PCA and any Tenneco Forest Successor to, use the Trademark only with goods and services of Licensee, its Subsidiaries, PCA and any Tenneco Forest Successor, as applicable, in accordance with the terms of this Agreement and the PCA Agreement, and with the guidance and directions furnished to the Licensee by the Licensor, or its authorized representatives or agents, from time to time, if any; but always the quality of the goods and services shall be subject to the reasonable satisfaction of Licensor or as specified by it. 4. INSPECTION. Licensee will permit, and will cause its Subsidiaries, PCA and any Tenneco Forest Successor to permit, duly authorized representatives of the Licensor to inspect any of their premises using the Trademark, as applicable, at all reasonable times and subject to reasonable conditions, for the purpose of ascertaining or determining compliance with Paragraphs 1 and 3 hereof. 5. USE OF TRADEMARK. When using the Trademark, Licensee undertakes to, and shall cause its Subsidiaries, PCA and any Tenneco Forest Successor to, comply with all laws pertaining to the Trademark. This provision includes compliance with marking requirements. Licensee represents and warrants that all goods and services to be sold under the Trademark by it, its Subsidiaries, PCA and any Tenneco Forest Successor, and the marketing, sales, and distribution of them, shall meet or exceed all federal, state, local and foreign laws, ordinances, standards, regulations, and guidelines pertaining to such products or activities, including, but not limited to those pertaining to product safety, quality, labeling and propriety. Licensee agrees that it will not, and will not permit its Subsidiaries, PCA or any Tenneco Forest Successor to, knowingly package, market, sell, or distribute any goods or services, or knowingly cause or permit any goods or services to be packaged, marketed, sold or distributed, in violation of any such federal, state, local or foreign law, ordinance, standard, regulation or guideline. 6. PACKAGING REGISTRATIONS. TMC agrees to only use the Packaging Registrations to the extent expressly permitted by the terms of this Agreement. TMC will not take any action with respect to any Packaging Registrations, except as directed by Licensor, and will allow any and all registrations and applications for U.S. or foreign registration in the Packaging Registrations to lapse (unless otherwise directed by Licensor). In addition, upon receiving a request from Licensor to perfect the assignment of any or all Packaging Registrations to Licensor or one of its affiliates, TMC will take such action within ten (10) business days of the receipt of such request. Any expenses for such action will be shared jointly by Licensor and TMC and all such fees and expenses shall constitute Transaction Expenses under the Distribution Agreement. 7. EXTENT OF LICENSE. The license and other rights granted herein are for the sole purpose of assisting Licensee and its Subsidiaries, PCA and any Tenneco Forest Successor in transition to new identities and are not assignable or transferable in any manner whatsoever. Licensee has no right to grant any sublicenses or to use the Trademark for any other purpose, except as specifically provided herein. -3- 4 8. INDEMNITY. Licensee acknowledges that it, and its Subsidiaries, other affiliates and sublicensees granted any rights pursuant to this Agreement (including without limitation PCA or any Tenneco Forest Successor), will not have any claims against Licensor or any of its affiliates hereunder for any damage to property or injury to persons arising out of, or as the result of, the exercise by Licensee or its Subsidiaries, other affiliates or sublicensees of any license rights pursuant to this Agreement. Licensee agrees to indemnify, hold harmless, and defend Licensor and its Subsidiaries, affiliates and authorized representatives (with legal counsel reasonably acceptable to Licensor) from and against any and all demands, claims, injuries, losses, damages, actions, suits, causes of action, proceedings, judgments, liabilities and expenses (including reasonable attorneys' fees, court costs and other reasonable legal expenses) (collectively, the "Claims") arising out of or connected with: a. the use of the Trademark by Licensee or any of its Subsidiaries, affiliates or other third parties granted any rights pursuant to this Agreement (including without limitation PCA or any Tenneco Forest Successor); b. any breach by Licensee or any of its Subsidiaries of any provision of this Agreement or of any warranty made by Licensee in this Agreement; c. any claims against Licensor or any of its Subsidiaries or other affiliates by any Tenneco Forest Successor or PCA in respect of any Trademark or other licenses granted hereby; or d. any failure of PCA and or any Tenneco Forest Successor to act or refrain from acting with respect to any Trademark in accordance with the provisions of the Agreement. Notwithstanding anything to the contrary which may be contained herein, Licensee's obligation to defend, indemnify and hold harmless Licensor for Claims hereunder is expressly conditioned upon Licensor: (a)(1) providing prompt (i.e., within 10 business days) notice to Licensee of any such Claim for which Licensor seeks defense and indemnification hereunder (i.e., provided that Licensee is not the first party to become aware of such Claim); (b)(2) promptly tendering the defense of the same (as applicable) to Licensee; and (c)(3) reasonably cooperating in the defense or settlement of such Claim, at Licensee's expense. No approval by Licensor of any action by Licensee or any of its Subsidiaries, affiliates or other third parties granted any rights pursuant to this Agreement (including without limitation PCA or any Tenneco Forest Successor), shall affect any right of Licensor to indemnification hereunder. Notwithstanding the foregoing, any failure on the part of Licensor to give notice to Licensee of any Claim for what it is entitled to indemnification hereunder shall not affect Licensor's right to indemnification from Licensee hereunder unless the Licensee has been actually prejudiced as a result of such failure. 9. TERMINATION. This Agreement may be terminated at any time prior to the Distribution by and in the sole discretion of Licensor without the approval of Licensee. In the event of such termination, no Party shall have any liability of any kind to any other Party or any other person. After Distribution, except as otherwise provided herein, this Agreement shall remain in full force and effect for the periods stated in Paragraph 1 above. However, Licensor retains the right to immediately terminate this Agreement in the event of a material breach of any term of this Agreement by Licensee or any of its Subsidiaries, PCA or any Tenneco Forest Successor, upon written notice to the Licensee and Licensee's failure to cure the material breach within ten (10) business days receipt of such written notice. -4- 5 10. OWNERSHIP OF TRADEMARK. The Licensee acknowledges Licensor=s exclusive right, title and interest in and to the Trademark and will not at any time do or cause or knowingly permit to be done any act or thing contesting or in any way impairing or tending to impair any part or all of such right, title and interest. In connection with the use of the Trademark, Licensee shall not, and shall not permit its Subsidiaries, PCA or any Tenneco Forest Successor to, in any manner represent that it has any ownership in the Trademark or registrations thereof, and acknowledges that use of the Trademark shall inure to the benefit of the Licensor. On termination of this Agreement in any manner provided herein, the Licensee will use all reasonable efforts to destroy, or cause to be destroyed or otherwise dispose of, all signs, displays or other identifications or advertising material, supplies and documents, and any other materials bearing the Trademark and will certify to Licensor in writing that it has done so. Such obligation shall apply to any affected items with respect to any partial termination of license rights hereunder, as applicable. Furthermore, Licensee and each of its Subsidiaries will not, and Licensee shall not permit any of its Subsidiaries, PCA or any Tenneco Forest Successor to, at any time adopt or use without the Licensor=s prior written consent, any word or mark which is likely to be similar to or confusing with the Trademark. 11. INFRINGEMENT OF TRADEMARK. If Licensee, any of its Subsidiaries, PCA or any Tenneco Forest Successor learns of any actual or threatened infringement of the Trademark or of the existence, use, or promotion of any mark or design similar to the Trademark, Licensee shall promptly notify Licensor. Licensor has the right to decide at its sole discretion what legal proceedings or other action, if any, shall be affirmatively taken, by who, how such proceedings or other action shall be conducted, and in whose name such proceedings or other action shall be performed. Notwithstanding the foregoing, Licensee shall not be obliged to pay the expenses of any such suit, which shall be prosecuted solely and wholly at Licensor's expense. Any legal proceedings instituted pursuant to this Section shall be for the sole benefit of Licensor and all sums recovered in such proceedings whether by judgment, settlement, or otherwise, shall be retained solely and exclusively by Licensor. 12. INJUNCTIVE RELIEF. Licensee acknowledges that any breach or threatened breach of any of Licensee=s covenants in this Agreement relating to the Trademark including, without limitation, Licensee=s and/or any of its Subsidiaries' failure to cease the manufacture, sale, marketing, or distribution of the goods bearing the Trademark at the termination or expiration of the term provided in this Agreement may result in immediate and irreparable damage to Licensor and to the rights of any subsequent licensee of them. Licensee acknowledges and admits that there is no adequate remedy at law for failure to cease such activities, and Licensee agrees that in the event of such breach or threatened breach, Licensor shall be entitled to temporary and permanent injunctive relief and such other relief as any court with jurisdiction may deem just and proper. 13. MODIFICATION, WAIVER, SEVERABILITY. Subject to the provisions of Section 9.08 of the Distribution Agreement, this Agreement may not be amended or modified except in a writing executed by each of the parties hereto. The failure by any party to exercise or a delay in exercising any right provided for herein shall not be deemed a waiver of any right hereunder. 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. 14. NOTICE. Any notices required or permitted to be given under this Agreement shall be deemed sufficiently given if mailed by registered mail, return receipt requested postage prepaid, -5- 6 addressed to the party to be notified at its address shown above (followed by confirmed facsimile) or at such other address as may be furnished in writing to the notifying party. 15. MISCELLANEOUS. a. CAPTIONS. The captions for each Section have been inserted for the sake of convenience and shall not be deemed to be binding upon the parties for the purpose of interpretation of this Agreement. b. INTERPRETATION. The parties agree that each party and its counsel has reviewed this Agreement and the normal rule of construction that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. c. ASSIGNABILITY. Subject to the following, the provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective permitted successors and permitted assigns. This Agreement shall be assignable by Licensor so long as the resulting successor assumes all the obligations of Licensor. This Agreement may not be assigned by Licensee in whole or part without the prior written consent of Licensor. d. RIGHTS CUMULATIVE. Except as expressly provided in this Agreement, and to the extent permitted by law, any remedies described in this Agreement are cumulative and not alternative to any other remedies available at law or in equity. -6- 7 IN WITNESS WHEREOF, the parties have executed or caused this Transition Trademark License Agreement to be executed as of the first date written above. Tenneco Automotive Inc. (LICENSOR) By: /s/ Don Carpenter ---------------------------------- Tenneco Management Company ("TMC") By: /s/ Don Carpenter ---------------------------------- Tenneco Packaging Inc. (LICENSEE) By: /s/ James V. Faulkner, Jr. ---------------------------------- -7- 8 SCHEDULE A UNITED STATES REGISTRATIONS TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO United States 2080683 22JL1997 9 FOREIGN REGISTRATIONS
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Albania 7418 15NO1998 TENNECO & DESIGN Albania 7419 15NO1998 TENNECO Algeria 0496020 30SE1995 TENNECO & DESIGN Algeria 049619 30SE1995 TENNECO Antigua 2737 TENNECO Armenia AM3073 12MY1998 TENNECO & DESIGN Armenia AM3074 12MY1998 TENNECO Australia 673129 22SE1995 TENNECO & DESIGN Australia 673119 22SE1995 TENNECO & DESIGN Austria 163909 26AP1996 TENNECO Austria 163908 26AP1996 TENNECO & DESIGN Belarus BY7981 22SE1995 TENNECO Benelux 582665 22SE1995 TENNECO & DESIGN Benelux 582666 22SE1995 TENNECO & DESIGN Bulgaria 28518 24JE1996 TENNECO Bulgaria 28519 24JE1996 TENNECO Chile 525211 23OC1998 TENNECO Chile 355051 11MY1990 TENNECO Czech Republic 166351 TENNECO & DESIGN Czech Republic 205245 10NO1997 TENNECO Denmark VR06.532 1995 29SE1995 TENNECO & DESIGN Denmark Reg: VR06.531 1995 29SE1995 TENNECO East Germany 643998 21AP1982 TENNECO & DESIGN Estonia 22923 26MR1997 TENNECO Estonia 22924 26MR1996 TENNECO & DESIGN Finland 206491 30JE1997 TENNECO Finland 206490 30JE1997
10
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO France 1698801 10OC1991 TENNECO France 95589254 22SE1995 TENNECO & DESIGN France 95589255 22SE1995 TENNECO & DESIGN Germany 395 38 838 18MR1998 TENNECO & DESIGN Great Britain 2038109 20SE1995 TENNECO Greece 126258 22SE1995 TENNECO & DESIGN Hungary 153263 24AU1998 TENNECO Hungary 153264 24AU1998 TENNECO Hungary 123938 08AP1982 TENNECO & DESIGN Iceland 189/1996 22FE1996 TENNECO Iceland 188/1996 22FE1996 TENNECO & DESIGN Italy 718343 17JL1998 TENNECO Italy 718342 17JL1998 TENNECO Kyrgyzstan KG3996 30SE1997 TENNECO Latvia 37822 22SE1995 TENNECO & DESIGN Latvia 37543 20JE1997 TENNECO & DESIGN Macao 15243-M 06JE1997 TENNECO Macao 15242-M 02AP1996 TENNECO Mexico 131060 28JE1966 TENNECO Mexico 206765 TENNECO Mexico 216989 09DE1976 TENNECO & DESIGN Moldova 4732 22SE1995 TENNECO Moldova 4731 22SE1995 TENNECO Monoco 9516512 22SE1995 TENNECO & DESIGN Monoco 9516513 22SE1995 TENNECO & DESIGN Myanmar 4258/1995 27SE1995 TENNECO & DESIGN Netherlands Antilles 19526 04SE1996 TENNECO Netherlands Antilles 19527 04SE1996
11
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Norway 178127 21NO1996 TENNECO & DESIGN O.A.P.I 35495 22SE1995 TENNECO O.A.P.I 35496 22SE1995 TENNECO Poland 59304 TENNECO & DESIGN Portugal 312666 15JA1997 TENNECO & DESIGN Romania 25509 13OC1997 TENNECO & DESIGN Russian Federation 166989 18AU1998 TENNECO Slovak Republic 182616 15OC1998 TENNECO & DESIGN Slovak Republic 182615 15OC1998 TENNECO Sweden 329070 27NO1998 TENNECO & DESIGN Sweden 329071 27NO1998 TENNECO Switzerland 431835 22SE1995 TENNECO & DESIGN Switzerland 431836 22SE1995 TENNECO & DESIGN Syria 57302 27MR1996 TENNECO Syria 57301 27MR1996 TENNECO & DESIGN Tunisia EE95.1270 22SE1995 TENNECO Tunisia EE95.1269 22SE1995 TENNECO Uzbekistan UZ6392 09JE1997 TENNECO & DESIGN Uzbekistan UZ6393 09JE1997 TENNECO Vietnam 19166 23NO1995 TENNECO & DESIGN Vietnam 21123 19JE1996 TENNECO & DESIGN Zaire 5163/95 22SE1995 TENNECO Zaire 2607/91 05JL1991 TENNECO Zaire 5162/95 22SE1995
12 FOREIGN APPLICATIONS
TRADEMARK COUNTRY APPLICATION NO. APPLICATION DATE TENNECO Germany 39538842.2 22SE1995 TENNECO Mozambique 01 22SE1995 TENNECO & DESIGN Mozambique 01 22SE1995
13 SCHEDULE B UNITED STATES TRADEMARK REGISTRATIONS
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO United States 1310943 25DE1984 TENNECO United States 1917869 12SE1995 TENNECO United States 786614 16MR1965 TENNECO United States 783055 12JA1965 TENNECO United States 1930571 31OC1995 TENNECO United States 823408 31JA1967 TENNECO United States 827435 18AP1967 TENNECO & DESIGN United States 2155820 05MY1998 TENNECO & DESIGN United States 831633 04JL1967 TENNECO & DESIGN United States 823409 31JA1967 TENNECO & DESIGN United States 827436 18AP1967 TENNECO & DESIGN United States 786595 16MR1965 TENNECO & DESIGN United States 786984 23MR1965 TENNECO & DESIGN United States 1250177 06SE1983 TENNECO & DESIGN United States 1259146 29NO1983 TENNECO & DESIGN United States 1236187 03MY1983 TENNECO & DESIGN United States 1310944 25DE1984 TENNECO & United States 1249771 30AU1983 DESIGN(COLOR) TENNECO & United States 866994 25MR1969 DESIGN(COLOR) TENNECO & United States 1225646 01FE1983 DESIGN(COLOR)
14 FOREIGN TRADEMARK REGISTRATIONS
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN African Intellectual 23161 01NO1982 Property TENNECO Algeria 38363 21DE1986 TENNECO & DESIGN Algeria 32917 TENNECO Argentina 1528284 30JE1994 TENNECO Argentina 1534801 31AU1994 TENNECO Argentina 1541968 31OC1994 TENNECO Argentina 1609658 31JL1996 TENNECO Argentina 1609659 31JL1996 TENNECO Argentina 1609660 31JL1996 TENNECO Argentina 1609661 31JL1996 TENNECO Argentina 1609662 31JL1996 TENNECO Argentina 1654877 09JA1998 TENNECO & DESIGN Argentina 1528285 30JE1994 TENNECO & DESIGN Argentina 1528286 30JE1994 TENNECO & DESIGN Argentina 1541969 31OC1994 TENNECO & DESIGN Argentina 1571568 12MR1995 TENNECO & DESIGN Arizona 20513 07AU1981 TENNECO Armenia 1881 11JE1997 TENNECO Armenia 1882 11JE1997 TENNECO Australia A201497 19AP1966 TENNECO Australia A201498 19AP1966 TENNECO Australia A201499 19AP1966 TENNECO Australia A201500 19AP1966 TENNECO Australia A201501 19AP1966 TENNECO Australia A616779 22NO1993 TENNECO Australia A616780 22NO1993 TENNECO & DESIGN Australia A201502 19AP1966 TENNECO & DESIGN Australia A201503 19AP1966 TENNECO & DESIGN Australia A201504 19AP1966 TENNECO & DESIGN Australia A201505 19AP1966 TENNECO & DESIGN Australia A201506 19AP1966 TENNECO & DESIGN Australia A616781 22NO1993 TENNECO & DESIGN Australia A616782 22NO1993 TENNECO & DESIGN Australia A381901 30SE1982 TENNECO & DESIGN Australia A381900 30SE1982 TENNECO Austria 59340 19AP1967 TENNECO Bahamas 5131 TENNECO Bahamas 5129 TENNECO Bahamas 5130 TENNECO Bahamas 5128 TENNECO Bahamas 5127 TENNECO Bahamas 5126 TENNECO Bahamas 10767 TENNECO Bahamas 17807 22SE1995 TENNECO Bahamas 17798 22SE1995 TENNECO Bahamas 17801 22SE1995 TENNECO Bahamas 17854 22SE1995 TENNECO Bahamas 17853 22SE1995
15
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Bahamas 17855 22SE1995 TENNECO & DESIGN Bahamas 17882 22SE1995 TENNECO & DESIGN Bahamas 17797 22SE1995 TENNECO & DESIGN Bahamas 17795 22SE1995 TENNECO & DESIGN Bahamas 17796 22SE1995 TENNECO & DESIGN Bahamas 17806 22SE1995 TENNECO & DESIGN Bahamas 5137 TENNECO & DESIGN Bahamas 5135 TENNECO & DESIGN Bahamas 5136 TENNECO & DESIGN Bahamas 5134 TENNECO & DESIGN Bahamas 5133 TENNECO & DESIGN Bahamas 5132 TENNECO & DESIGN Bahamas 17852 22SE1995 TENNECO Bahrain 1744 20SE1995 TENNECO Bahrain 1745 21AU1996 TENNECO Bahrain 1746 21AU1996 TENNECO Bahrain 1747 20SE1995 TENNECO Bahrain 1748 20SE1995 TENNECO Bahrain 11913 15SE1988 TENNECO Bahrain 11914 15SE1988 TENNECO Bahrain 19344 07JL1998 TENNECO Bahrain 19345 07JL1998 TENNECO Bahrain 19346 07JL1998 TENNECO Bahrain 19347 07JL1998 TENNECO & DESIGN Bahrain 11917 15SE1988 TENNECO & DESIGN Bahrain 11918 15SE1988 TENNECO & DESIGN Bahrain 11919 15SE1988 TENNECO & DESIGN Bahrain 11920 15SE1988 TENNECO Bangladesh 8780 20DE1966 TENNECO Bangladesh 8781 20DE1966 TENNECO Bangladesh 8782 20DE1966 TENNECO Bangladesh 8783 20DE1966 TENNECO Bangladesh 8784 20DE1966 TENNECO Bangladesh 8785 20DE1966 TENNECO & DESIGN Bangladesh 8786 20DE1966 TENNECO & DESIGN Bangladesh 9162 20DE1966 TENNECO & DESIGN Bangladesh 9163 20DE1966 TENNECO & DESIGN Bangladesh 9164 20DE1966 TENNECO & DESIGN Bangladesh 9165 20DE1966 TENNECO & DESIGN Bangladesh 9166 20DE1966 TENNECO &DESIGN Bangladesh 18276 09NO1982 TENNECO &DESIGN Bangladesh 18277 09NO1982 TENNECO Belarus 1756 18NO1993 TENNECO Belarus BY 7980 22SE1995 TENNECO &DESIGN Belarus 2460 20DE1993 TENNECO Benelux 87329 TENNECO & DESIGN Benelux 95975 TENNECO & DESIGN Benelux 378503 TENNECO Bermuda 27204 22SE1995 TENNECO Bermuda 27206 22SE1995 TENNECO Bermuda 27207 22SE1995
16
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Bermuda 27208 22SE1995 TENNECO Bermuda 27209 22SE1995 TENNECO Bermuda 27210 22SE1995 TENNECO Bermuda 27211 22SE1995 TENNECO & DESIGN Bermuda 10002 22NO1982 TENNECO & DESIGN Bermuda 10004 22NO1982 TENNECO Bolivia 59126-C 17AU1995 TENNECO Bolivia 59127-C 17AU1995 TENNECO Bolivia 59152-C 17AU1995 TENNECO Bolivia 65450-C 04MR1998 TENNECO Bolivia 65451-C 04MR1998 TENNECO Bolivia 65452-C 04MR1998 TENNECO Bolivia 65453-C 04MR1998 TENNECO Bolivia 65506-C 09MR1998 TENNECO Bolivia 65507-C 09MR1998 TENNECO Bolivia 65570-C 24MR1998 TENNECO Bolivia 48019 15NO1988 TENNECO & DESIGN Bolivia 65548-C 17MR1998 TENNECO & DESIGN Bolivia 65549-C 17MR1998 TENNECO & DESIGN Bolivia 65571-C 24MR1998 TENNECO & DESIGN Bolivia 65572-C 24MR1998 TENNECO & DESIGN Bolivia 65573-C 24MR1998 TENNECO & DESIGN Bolivia 59125-C 17AU1995 TENNECO Bophuthatswana 66/1506 TENNECO Bophuthatswana 66/1504 TENNECO & DESIGN Bophuthatswana 66/1511 TENNECO & DESIGN Bophuthatswana 66/1509 TENNECO & DESIGN Bophuthatswana 82/0764G TENNECO & DESIGN Bophuthatswana 82/0764 05OC1982 TENNECO & DESIGN Bophuthatswana 82/0763 TENNECO Botswana 7363 TENNECO Botswana 7365 18AP1996 TENNECO & DESIGN Botswana SA11649 22JL1991 TENNECO & DESIGN Botswana SA11650 22JL1991 TENNECO Brazil 817793160 12MR1996 TENNECO & DESIGN Brazil 817793178 12MR1996 TENNECO Brazil 6072038 25AP1975 TENNECO Brazil 6085741 25MY1975 TENNECO Brazil 607554045 27OC1981 TENNECO Brazil 607554010 27OC1981 TENNECO Brazil 817765620 05DE1995 TENNECO Brazil 817793160 12MR1996 TENNECO Brazil 817793186 28AP1994 TENNECO & DESIGN Brazil 6085768 25MY1975 TENNECO & DESIGN Brazil 006072046 25AP1975 TENNECO & DESIGN Brazil 607553979 27OC1981 TENNECO & DESIGN Brazil 810819759 01NO1983 TENNECO & DESIGN Brazil 810819740 14FE1984 TENNECO & DESIGN Brazil 607553995 13OC1981 TENNECO & DESIGN Brazil 607553960 13OC1981
17
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Brazil 817793178 12MR1996 TENNECO & DESIGN Brazil 817793194 12MR1995 TENNECO British Virgin Islands 1978 TENNECO British Virgin Islands 2933 10OC1995 TENNECO & DESIGN British Virgin Islands 2934 10OC1995 TENNECO British Virgin Islands 1160 TENNECO British Virgin Islands 1979 TENNECO & DESIGN British Virgin Islands 1159 TENNECO Brunei 3367 22JE1967 TENNECO Brunei 3368 22JE1967 TENNECO Brunei 3369 22JE1967 TENNECO Brunei 3370 22JE1967 TENNECO Brunei 3371 22JE1967 TENNECO Brunei 3372 22JE1967 TENNECO Brunei 22010 25SE1995 TENNECO Brunei 22458 25SE1995 TENNECO & DESIGN Brunei 3373 22JE1967 TENNECO & DESIGN Brunei 3374 22JE1967 TENNECO & DESIGN Brunei 3375 22JE1967 TENNECO & DESIGN Brunei 3376 22JE1967 TENNECO & DESIGN Brunei 3377 22JE1967 TENNECO & DESIGN Brunei 3378 22JE1967 TENNECO & DESIGN Brunei 21499 25SE1995 TENNECO & DESIGN Brunei 22008 25SE1995 TENNECO & DESIGN Brunei 22460 25SE1995 TENNECO & DESIGN Brunei 22917 22SE1995 TENNECO Bulgaria 5337 21NO1996 TENNECO & DESIGN Bulgaria 5338 21NO1996 TENNECO Bulgaria 13692 TENNECO & DESIGN Bulgaria 13693 TENNECO Burma 1674/1982 TENNECO & DESIGN Burma 1675/1982 TENNECO & DESIGN Burundi 1907 25OC1982 TENNECO Canada 164560 08AU1984 TENNECO Canada 271058 16JL1982 TENNECO Canada 271239 23JL1982 TENNECO Canada 338835 08AP1988 TENNECO Canada 389592 25OC1991 TENNECO Canada 437524 30DE1994 TENNECO Canada 501483 30SE1998 TENNECO & DESIGN Canada 169630 12JE1985 TENNECO & DESIGN Canada 338938 08AP1988 TENNECO & DESIGN Canada 389387 11OC1991 TENNECO & DESIGN Canada 418508 22OC1993 TENNECO & DESIGN Canada 501705 02OC1998 TENNECO Chile 431708 21SE1994 TENNECO Chile 509272 01JE1998 TENNECO Chile 525210 23OC1998 TENNECO & DESIGN Chile 431709 21SE1994 TENNECO & DESIGN Chile 353748 06AP1990 TENNECO & DESIGN Chile 392145 04SE1992 TENNECO China P.R. 904147 27NO1996
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TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO China P.R. 989224 21AP1997 TENNECO China P.R. 989603 21AP1997 TENNECO China P.R. 992005 28AP1997 TENNECO China P.R. 996258 07MY1997 TENNECO China P.R. 1001728 07MY1997 TENNECO China P.R. 1007489 14MY1997 TENNECO China P.R. 1019814 28MY1997 TENNECO China P.R. 1056478 21JL1997 TENNECO China P.R. 1067746 28JL1997 TENNECO & DESIGN China P.R. 904141 27NO1996 TENNECO & DESIGN China P.R. 989225 21AP1997 TENNECO & DESIGN China P.R. 989604 21AP1997 TENNECO & DESIGN China P.R. 992004 28AP1997 TENNECO & DESIGN China P.R. 996257 07MY1997 TENNECO & DESIGN China P.R. 1001727 07MY1997 TENNECO & DESIGN China P.R. 1001730 07MY1997 TENNECO & DESIGN China P.R. 1007488 14MY1997 TENNECO & DESIGN China P.R. 1019810 28MY1997 TENNECO & DESIGN China P.R. 1056480 21JL1997 TENNECO & DESIGN China P.R. 1067748 28JL1997 TENNECO & DESIGN China P.R. 989222 21AP1997 (IN CHINESE) TENNECO & DESIGN China P.R. 989606 21AP1997 (IN CHINESE) TENNECO & DESIGN China P.R. 992002 28AP1997 (IN CHINESE) TENNECO & DESIGN China P.R. 996259 07MY1997 (IN CHINESE) TENNECO & DESIGN China P.R. 1007486 14MY1997 (IN CHINEE) TENNECO & DESIGN China P.R. 1019811 28MY1997 (IN CHINESE) TENNECO & DESIGN China P.R. 1056477 21JL1997 (IN CHINESE) TENNECO & DESIGN China P.R. 1067749 28JL1997 (IN CHINESE) TENNECO & DESIGN China P.R. 180234 05JL1983 TENNECO & DESIGN China P.R. 760762 14AU1995 TENNECO (IN CHINESE) China P.R. 989223 21AP1997 TENNECO (IN CHINESE) China P.R. 989605 20AP1997 TENNECO (IN CHINESE) China P.R. 992003 28AP1997 TENNECO (IN CHINESE) China P.R. 996260 07MY1997 TENNECO (IN CHINESE) China P.R. 1001729 07MY1997 TENNECO (IN CHINESE) China P.R. 1007487 14MY1997 TENNECO (IN CHINESE) China P.R. 1019812 28MY1997 TENNECO (IN CHINESE) China P.R. 1056479 21JL1997 TENNECO (IN CHINESE) China P.R. 1067747 28JL1997 TENNECO Colombia 65173 08AU1967 TENNECO Colombia 65173A 08AU1967 TENNECO Colombia 65173B 08AU1967 TENNECO Colombia 65179 08AU1967 TENNECO Colombia 65181 08AU1982 TENNECO Colombia 187950 29JL1996 TENNECO Colombia 187951 29JL1996 TENNECO Colombia 188178 13AU1996
19
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Colombia 188179 13AU1996 TENNECO Colombia 188182 13AU1996 TENNECO Colombia 188183 13AU1996 TENNECO Colombia 188368 15AU1996 TENNECO Colombia 188832 23AU1996 TENNECO & DESIGN Colombia 65172 08AU1967 TENNECO & DESIGN Colombia 65172A 08AU1967 TENNECO & DESIGN Colombia 65174 08AU1967 TENNECO & DESIGN Colombia 65177 08AU1967 TENNECO & DESIGN Colombia 187949 29AU1996 TENNECO & DESIGN Colombia 188180 13AU1996 TENNECO & DESIGN Colombia 188181 13AU1996 TENNECO & DESIGN Colombia 188186 13AU1996 TENNECO & DESIGN Colombia 188187 13AU1996 TENNECO & DESIGN Colombia 188194 13AU1996 TENNECO & DESIGN Colombia 188195 13AU1996 TENNECO & DESIGN Colombia 188196 13AU1996 TENNECO & DESIGN Colombia 188197 13AU1996 TENNECO & DESIGN Colombia 106946 30AU1984 TENNECO Costa Rica 35778 30MY1982 TENNECO Costa Rica 35793 01JE1982 TENNECO Costa Rica 35795 01JE1982 TENNECO Costa Rica 35797 01JE1982 TENNECO Costa Rica 35798 01JE1982 TENNECO Costa Rica 35800 01JE1982 TENNECO & DESIGN Costa Rica 14043 28JL1982 TENNECO & DESIGN Costa Rica 35734 30MY1992 TENNECO & DESIGN Costa Rica 35790 01JE1982 TENNECO & DESIGN Costa Rica 35829 22JE1982 TENNECO & DESIGN Costa Rica 35830 22JE1982 TENNECO & DESIGN Costa Rica 35831 22JE1982 TENNECO & DESIGN Costa Rica 35872 06JE1982 TENNECO & DESIGN Costa Rica 61649 05JA1983 TENNECO & DESIGN Costa Rica 61650 05JA1983 TENNECO Cuba 116328 25JE1986 TENNECO Cuba 116332 25JE1986 TENNECO Cyprus 11201 TENNECO Cyprus 11202 TENNECO Cyprus 11203 TENNECO Cyprus 11204 TENNECO Cyprus 43474 22OC1998 TENNECO Cyprus 43475 22OC1998 TENNECO Cyprus 43476 22OC1998 TENNECO Cyprus 43477 22OC1998 TENNECO Cyprus 43478 22OC1998 TENNECO Cyprus 43479 22OC1998 TENNECO Cyprus 43480 22OC1998 TENNECO Cyprus 43481 22OC1998 TENNECO & DESIGN Cyprus 11205 TENNECO & DESIGN Cyprus 11206 TENNECO & DESIGN Cyprus 11207 TENNECO & DESIGN Cyprus 11208 TENNECO & DESIGN Cyprus 43464 22OC1998 TENNECO & DESIGN Cyprus 43465 22OC1998
20
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Cyprus 43467 22OC1998 TENNECO & DESIGN Cyprus 43468 22OC1998 TENNECO & DESIGN Cyprus 43469 22OC1998 TENNECO & DESIGN Cyprus 43470 22OC1998 TENNECO & DESIGN Cyprus 43471 22OC1998 TENNECO & DESIGN Cyprus 43472 22OC1998 TENNECO & DESIGN Cyprus 43473 22OC1998 TENNECO & DESIGN Cyprus 23042 05OC1982 TENNECO & DESIGN Cyprus 23044 05OC1982 TENNECO Czech Republic 205246 10NO1997 TENNECO & DESIGN Czech Republic 166350 TENNECO Denmark 3202 10NO1967 TENNECO & DESIGN Denmark 3196/1982 03SE1982 TENNECO Dominican Republic 15419 19JA1967 TENNECO Dominican Republic 15408 18JA1967 TENNECO Dominican Republic 15421 20JA1967 TENNECO Dominican Republic 34086 30JE1982 TENNECO Dominican Republic 81867 15JA1996 TENNECO Dominican Republic 81813 15JA1986 TENNECO Dominican Republic 81305 15JA1986 TENNECO Dominican Republic 81530 15JA1986 TENNECO Dominican Republic 81537 15JA1986 TENNECO & DESIGN Dominican Republic 81814 15JA1996 TENNECO & DESIGN Dominican Republic 81823 15JA1996 TENNECO & DESIGN Dominican Republic 81536 15JA1996 TENNECO & DESIGN Dominican Republic 81306 15JA1996 TENNECO & DESIGN Dominican Republic 81518 15JA1996 TENNECO & DESIGN Dominican Republic 81866 15JA1996 TENNECO & DESIGN Dominican Republic 81305 15JA1996 TENNECO Ecuador 270-88 20FE1967 TENNECO Ecuador 0504-95 31MY1995 TENNECO Ecuador 0505-95 31MY1995 TENNECO Ecuador 1774-95 31MY1995 TENNECO Ecuador 61264 28AP1997 TENNECO Ecuador 61265 28AP1997 TENNECO Ecuador 61266 28AP1997 TENNECO Ecuador 61267 28AP1997 TENNECO Ecuador 61268 28AP1997 TENNECO Ecuador 61269 28AP1997 TENNECO & DESIGN Ecuador 691 01NO1967 TENNECO & DESIGN Ecuador 1780-95 31MY1995 TENNECO & DESIGN Ecuador 61270 28AP1997 TENNECO & DESIGN Ecuador 61271 28AP1997 TENNECO & DESIGN Ecuador 61272 28AP1997 TENNECO & DESIGN Ecuador 61273 28AP1997 TENNECO & DESIGN Ecuador 61274 28AP1997 TENNECO & DESIGN Ecuador 61275 28AP1997 TENNECO & DESIGN Ecuador 61276 28AP1997 TENNECO & DESIGN Ecuador 61278 28AP1997 TENNECO & DESIGN Ecuador 61279 28AP1997 TENNECO & DESIGN Ecuador 467-88 02SE1988
21
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Ecuador 734-88 24NO1982 TENNECO Egypt 43492 30AP1987 TENNECO & DESIGN Egypt 60720 10MY1982 TENNECO & DESIGN Egypt 60721 10MY1982 TENNECO El Salvador 158/78 16SE1998 TENNECO El Salvador 29 08NO1996 TENNECO El Salvador 00062 07OC1997 TENNECO El Salvador 00129 22MY1997 TENNECO El Salvador 186 17JA1997 TENNECO El Salvador 187 03DE1996 TENNECO El Salvador 00217 17FE1997 TENNECO El Salvador 00218 17FE1997 TENNECO & DESIGN El Salvador 117/78 15JE1998 TENNECO & DESIGN El Salvador 28 28MY1997 TENNECO & DESIGN El Salvador 00129 17JA1997 TENNECO & DESIGN El Salvador 00153 05MR1997 TENNECO & DESIGN El Salvador 00196 25FE1997 TENNECO & DESIGN El Salvador 00197 25FE1997 TENNECO & DESIGN El Salvador 7444 14JA1997 TENNECO & DESIGN El Salvador 9453 09MY1997 TENNECO El Salvador 15843 25AP1968 TENNECO & DESIGN Estonia 10051 14AP1994 TENNECO & DESIGN Estonia 11100 27MY1994 TENNECO Ethiopia 0825 01NO1997 TENNECO Fiji Islands 27166 10OC1995 TENNECO Fiji Islands 27168 10OC1995 TENNECO Fiji Islands 27169 10OC1995 TENNECO Fiji Islands 27170 10OC1995 TENNECO Fiji Islands 27171 10OC19995 TENNECO Fiji Islands 27172 10OC1995 TENNECO Fiji Islands 27174 10OC1995 TENNECO & DESIGN Fiji Islands 27167 10OC1995 TENNECO & DESIGN Fiji Islands 27177 10OC1995 TENNECO & DESIGN Fiji Islands 27178 10OC1995 TENNECO & DESIGN Fiji Islands 27179 10OC1995 TENNECO & DESIGN Fiji Islands 27180 10OC1995 TENNECO & DESIGN Fiji Islands 27181 10OC1995 TENNECO Finland 50773 04AU1997 TENNECO & DESIGN Finland 89391 05JL1984 TENNECO France 1591891 14MY1990 TENNECO France 1602780 TENNECO & DESIGN France 1602778 17JL1990 TENNECO & France 1602779 17JL1990 DESIGN(COLOR) TENNECO & DESIGN France 1698802 10OC1991 TENNECO Georgia 2352 12JE1996
22
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Ghana 24121 TENNECO & DESIGN Ghana 24120 15MR1983 TENNECO Great Britain 893445 20AP1987 TENNECO Great Britain 893446 20AP1987 TENNECO Great Britain 893447 20AP1987 TENNECO Great Britain 893448 20AP1987 TENNECO Great Britain 893449 20AP1987 TENNECO Great Britain 2038076 20SE1995 TENNECO & DESIGN Great Britain 893450 20AP1987 TENNECO & DESIGN Great Britain 893451 20AP1987 TENNECO & DESIGN Great Britain 893452 20AP1987 TENNECO & DESIGN Great Britain 893453 20AP1987 TENNECO & DESIGN Great Britain 893454 20AP1987 TENNECO & DESIGN Great Britain 1125272 06DE1979 TENNECO Greece 36882 30JA1967 TENNECO & DESIGN Greece 126259 22SE1995 TENNECO & DESIGN Greece 71664 21AP1982 TENNECO Guatemala 22958 29DE1980 TENNECO Guatemala 22959 29DE1980 TENNECO Guatemala 22960 29DE1980 TENNECO Guatemala 22961 29DE1980 TENNECO Guatemala 24223 16NO1981 TENNECO Guatemala 24225 19AP1982 TENNECO Guatemala 24226 16NO1981 TENNECO Guatemala 24227 16NO1981 TENNECO Guatemala 82417 23DE1996 TENNECO Guatemala 83420 16JA1997 TENNECO Guatemala 83783 20JA1997 TENNECO & DESIGN Guatemala 43199 07MY1982 TENNECO & DESIGN Guatemala 43367 14MY1982 TENNECO & DESIGN Guatemala 43370 14MY1982 TENNECO & DESIGN Guatemala 43371 14MY1982 TENNECO & DESIGN Guatemala 43514 04JE1982 TENNECO & DESIGN Guatemala 81630 23DE1996 TENNECO & DESIGN Guatemala 82416 23DE1996 TENNECO & DESIGN Guatemala 91911 10NO1998 TENNECO & DESIGN Guatemala 43368 14MY1982 TENNECO & DESIGN Guatemala 43369 14MY1982 TENNECO Guyana 6541A 22DE1966 TENNECO Guyana 6543A 22DE1966 TENNECO Guyana 6545A 22DE1966 TENNECO Guyana 6546A TENNECO Guyana 6547A 22DE1966 TENNECO Guyana 6549A 22DE1966 TENNECO & DESIGN Guyana 6521A 22DE1966 TENNECO & DESIGN Guyana 6539A 22DE1966 TENNECO & DESIGN Guyana 6542A 22DE1966 TENNECO & DESIGN Guyana 6544A 22DE1966 TENNECO & DESIGN Guyana 6548A 22DE1966 TENNECO & DESIGN Guyana 6550A 22DE1966 TENNECO & DESIGN Guyana 11827A 12NO1982
23
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Guyana 11828A 12NO1982 TENNECO Haiti 370/112 12SE1997 TENNECO Haiti 371/112 12SE1997 TENNECO Haiti 372/112 12SE1997 TENNECO Haiti 373/112 12SE1997 TENNECO Haiti 374/112 12SE1997 TENNECO Haiti 375/112 12SE1997 TENNECO Haiti 376/112 12SE1997 TENNECO Haiti 377/112 12SE1997 TENNECO Haiti 378/112 12SE1997 TENNECO & DESIGN Haiti 379/112 12SE1997 TENNECO & DESIGN Haiti 380/112 12SE1997 TENNECO & DESIGN Haiti 382/112 12SE1997 TENNECO & DESIGN Haiti 383/112 12SE1997 TENNECO & DESIGN Haiti 384/112 12SE1997 TENNECO & DESIGN Haiti 385/112 12SE1997 TENNECO & DESIGN Haiti 386/112 12SE1997 TENNECO & DESIGN Haiti 387/112 12SE1997 TENNECO & DESIGN Haiti 388/112 12SE1997 TENNECO Honduras 3468 15MR1996 TENNECO Honduras 3472 15MR1996 TENNECO Honduras 3473 15MR1996 TENNECO Honduras 3474 15MR1996 TENNECO Honduras 3475 15MR1996 TENNECO Honduras 17064 10JL1980 TENNECO Honduras 40890 11OC1982 TENNECO Honduras 40891 11OC1982 TENNECO Honduras 40893 11OC1982 TENNECO Honduras 40894 11OC1982 TENNECO Honduras 40896 11OC1982 TENNECO Honduras 40897 11OC1982 TENNECO Honduras 64604 15MR1996 TENNECO Honduras 64605 15MR1996 TENNECO & DESIGN Honduras 3469 15MR1996 TENNECO & DESIGN Honduras 3470 15MR1996 TENNECO & DESIGN Honduras 3471 15MR1996 TENNECO & DESIGN Honduras 3477 15MR1996 TENNECO & DESIGN Honduras 3478 15MR1996 TENNECO & DESIGN Honduras 17065 10JL1980 TENNECO & DESIGN Honduras 41471 16FE1983 TENNECO & DESIGN Honduras 41473 16FE1983 TENNECO & DESIGN Honduras 41475 16FE1983 TENNECO & DESIGN Honduras 41477 16FE1983 TENNECO & DESIGN Honduras 41478 16FE1983 TENNECO & DESIGN Honduras 62621 15MR1996 TENNECO & DESIGN Honduras 64597 15MR1996 TENNECO & DESIGN Honduras 64603 15MR1996 TENNECO & DESIGN Honduras 65611 15MR1996 TENNECO & DESIGN Honduras 41472 16FE1983 TENNECO & DESIGN Honduras 41476 16FE1983 TENNECO Hong Kong 310/1968 23DE1966 TENNECO Hong Kong 881/1967 23DE1966 TENNECO Hong Kong 883/1967 23DE1966 TENNECO Hong Kong 885/1967 23DE1966
24
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Hong Kong 887/1967 23DE1966 TENNECO Hong Kong 308/68 23DE1966 TENNECO Hong Kong 1805/99 22SE1995 TENNECO Hong Kong 1823/99 22SE1995 TENNECO Hong Kong 1824/99 22SE1995 TENNECO Hong Kong 7910/98 06AU1998 TENNECO Hong Kong 7911/98 06AU1998 TENNECO Hong Kong 7912/98 06AU1998 TENNECO Hong Kong 11827/98 16NO1998 TENNECO & DESIGN Hong Kong 307/1968 23DE1966 TENNECO & DESIGN Hong Kong 309/1968 23DE1966 TENNECO & DESIGN Hong Kong 880/1967 23DE1966 TENNECO & DESIGN Hong Kong 882/1967 23DE1966 TENNECO & DESIGN Hong Kong 884/1967 23DE1966 TENNECO & DESIGN Hong Kong 886/1967 23DE1966 TENNECO & DESIGN Hong Kong 231/98 13JA1998 TENNECO & DESIGN Hong Kong 1803/99 22SE1995 TENNECO & DESIGN Hong Kong 1821/99 22SE1995 TENNECO & DESIGN Hong Kong 1822/99 22SE1995 TENNECO & DESIGN Hong Kong 5225/98 22SE1995 TENNECO & DESIGN Hong Kong 5226/98 22SE1995 TENNECO & DESIGN Hong Kong 7908/98 06AU1998 TENNECO & DESIGN Hong Kong 7909/98 06AU1998 TENNECO & DESIGN Hong Kong 10522/99 22SE1995 TENNECO & DESIGN Hong Kong 1686 07JA1983 TENNECO & DESIGN Hong Kong 1687 07JA1983 TENNECO & DESIGN Hungary 123551G TENNECO & DESIGN Iceland 430/1982 30DE1982 TENNECO India 155495 03DE1979 TENNECO India 239439 14DE1966 TENNECO India 239440 14DE1966 TENNECO India 239441 TENNECO India 239443 14DE1966 TENNECO India 239444 14DE1966 TENNECO & DESIGN India 239445 14DE1966 TENNECO & DESIGN India 239446 14DE1966 TENNECO & DESIGN India 239447 14DE1966 TENNECO & DESIGN India 239448 14DE1966 TENNECO & DESIGN India 239449 14DE1966 TENNECO & DESIGN India 239450 14DE1966 TENNECO Indonesia 350238 29DE1995 TENNECO Indonesia 352986 02FE1996 TENNECO Indonesia 360254 30MY1996 TENNECO Indonesia 364096 30JL1996 TENNECO Indonesia 364216 30JL1996 TENNECO Indonesia 364842 01AU1996 TENNECO Indonesia 390410 29JL1997 TENNECO Indonesia 390411 29JL1997 TENNECO & DESIGN Indonesia 348537 24NO1995 TENNECO & DESIGN Indonesia 352988 02FE1996 TENNECO & DESIGN Indonesia 360253 30MY1996 TENNECO & DESIGN Indonesia 363266 28JE1996 TENNECO & DESIGN Indonesia 363269 28JE1998
25
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Indonesia 364139 30JL1996 TENNECO & DESIGN Indonesia 364140 30JL1996 TENNECO & DESIGN Indonesia 364841 01AU1996 TENNECO & DESIGN Indonesia 364843 01AU1996 TENNECO & DESIGN Indonesia 305135 07DE1992 TENNECO & DESIGN Indonesia 305136 07DE1992 TENNECO Iran 30311 TENNECO & DESIGN Iran 55380 24MY1982 TENNECO Ireland 70236 19AP1987 TENNECO Ireland 70237 TENNECO Ireland 70238 19AP1987 TENNECO Ireland 70239 19AP1987 TENNECO Ireland 70240 19AP1987 TENNECO Ireland 201990 01JL1996 TENNECO & DESIGN Ireland 70241 26AP1987 TENNECO & DESIGN Ireland 70242 26AP1987 TENNECO & DESIGN Ireland 70243 26AP1987 TENNECO & DESIGN Ireland 70244 26AP1987 TENNECO & DESIGN Ireland 70245 26AP1987 TENNECO & DESIGN Ireland 201989 01JL1996 TENNECO & DESIGN Ireland 108253 20DE1982 TENNECO & DESIGN Ireland 108255 20DE1982 TENNECO Israel 100977 22SE1995 TENNECO Israel 100978 22SE1995 TENNECO Israel 100980 04FE1998 TENNECO Israel 100981 22SE1995 TENNECO Israel 100982 05AU1997 TENNECO Israel 100983 TENNECO Israel 100984 22SE1995 TENNECO Israel 100985 TENNECO Israel 100986 02JL1997 TENNECO & DESIGN Israel 100900 04FE1998 TENNECO & DESIGN Israel 100984 22SE1995 TENNECO & DESIGN Israel 100987 22SE1995 TENNECO & DESIGN Israel 100988 22SE1995 TENNECO & DESIGN Israel 100991 22SE1995 TENNECO & DESIGN Israel 100992 02JL1997 TENNECO & DESIGN Israel 100993 22SE1995 TENNECO & DESIGN Israel 100995 22SE1995 TENNECO & DESIGN Israel 100996 02JL1997 TENNECO Italy 403827 16SE1982 TENNECO Italy 714656 19AP1996 TENNECO & DESIGN Italy 403828 16SE1982 TENNECO & DESIGN Italy 714655 19AP1996 TENNECO & DESIGN Italy 387561 03OC1980 TENNECO Jamaica 11637 15DE1966 TENNECO Jamaica 11771 15DE1966 TENNECO Jamaica 11784 15DE1966 TENNECO Jamaica 12009 15DE1966 TENNECO Jamaica 12363 15DE1966 TENNECO & DESIGN Jamaica 11662 15DE1966
26
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Jamaica 12204 15DE1966 TENNECO & DESIGN Jamaica 12211 15DE1966 TENNECO & DESIGN Jamaica 12237 15DE1966 TENNECO & DESIGN Jamaica 12425 15DE1966 TENNECO & DESIGN Jamaica 28284 22SE1995 TENNECO & DESIGN Jamaica 29092 22SE1995 TENNECO & DESIGN Jamaica 29234 22SE1995 TENNECO & DESIGN Jamaica 20658 TENNECO & DESIGN Jamaica 20836 TENNECO Japan 1818000 31OC1985 TENNECO Japan 4011684 13JE1997 TENNECO Japan 4021196 04JL1997 TENNECO Japan 4196397 09OC1998 TENNECO & DESIGN Japan 1817999 31OC1985 TENNECO & DESIGN Japan 4011686 13JE1997 TENNECO & DESIGN Japan 4021197 04JL1997 TENNECO & DESIGN Japan 4196399 09OC1998 TENNECO & DESIGN Japan 4011687 13JE1997 (IN KATAKANA) TENNECO & DESIGN Japan 4021199 04JL1997 (IN KATAKANA) TENNECO & DESIGN Japan 4196400 09OC1998 (IN KATAKANA) TENNECO & DESIGN Japan 1818001 31OC1985 (KATAKANA CHARACTERS) TENNECO (IN Japan 4011685 13JE1997 KATAKANA) TENNECO (IN Japan 4060964 26SE1997 KATAKANA) TENNECO (IN Japan 4196398 09OC1998 KATAKANA) TENNECO (KATAKANA Japan 1818002 31OC1985 CHARACTERS) TENNECO Jordan 9546 27MY1967 TENNECO Jordan 9548 27MY1967 TENNECO Jordan 9550 27MY1967 TENNECO Jordan 9552 27MY1967 TENNECO Jordan 9554 27MY1967 TENNECO Jordan 9556 27MY1967 TENNECO Jordan 39277 21SE1995 TENNECO Jordan 39279 21SE1995 TENNECO & DESIGN Jordan 9545 27MY1967 TENNECO & DESIGN Jordan 9547 27MY1967 TENNECO & DESIGN Jordan 9549 27MY1967 TENNECO & DESIGN Jordan 9551 27MY1967 TENNECO & DESIGN Jordan 9553 27MY1967 TENNECO & DESIGN Jordan 9555 27MY1967 TENNECO & DESIGN Jordan 39272 21SE1995 TENNECO & DESIGN Jordan 39273 21SE1995 TENNECO & DESIGN Jordan 39275 21SE1995 TENNECO & DESIGN Jordan 39276 21SE1995 TENNECO & DESIGN Kansas NONE 26AP1961 TENNECO Kazakstan 1058 05AP1995 TENNECO Kazakstan 6949 13MY1998
27
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Kenya 0509 22SE1995 TENNECO Kenya 0510 22SE1995 TENNECO Kenya 0512 22SE1995 TENNECO Kenya 0513 22SE1995 TENNECO Kenya 15887 06AU1968 TENNECO Kenya 15888 06AU1968 TENNECO Kenya 15889 06AU1968 TENNECO Kenya 15890 06AU1968 TENNECO Kenya 43083 22SE1995 TENNECO Kenya 43084 22SE1995 TENNECO Kenya 43085 22SE1995 TENNECO & DESIGN Kenya 0514 22SE1995 TENNECO & DESIGN Kenya 0515 22SE1995 TENNECO & DESIGN Kenya 0516 22SE1995 TENNECO & DESIGN Kenya 0517 22SE1995 TENNECO & DESIGN Kenya 0518 22SE1995 TENNECO & DESIGN Kenya 15891 06AU1968 TENNECO & DESIGN Kenya 15892 06AU1968 TENNECO & DESIGN Kenya 15893 06AU1968 TENNECO & DESIGN Kenya 15894 06AU1968 TENNECO & DESIGN Kenya 43086 22SE1995 TENNECO & DESIGN Kenya 43087 22SE1995 TENNECO & DESIGN Kenya 43089 22SE1995 TENNECO & DESIGN Kenya 43090 22SE1995 TENNECO & DESIGN Kenya 30587 TENNECO & DESIGN Kenya 30588 26NO1982 TENNECO Kuwait 4538 TENNECO Kuwait 4539 07JA1970 TENNECO Kuwait 4542 TENNECO Kuwait 4544 TENNECO Kuwait 4590 TENNECO & DESIGN Kuwait 4540 07JA1970 TENNECO & DESIGN Kuwait 4541 TENNECO & DESIGN Kuwait 4543 TENNECO & DESIGN Kuwait 4545 TENNECO & DESIGN Kuwait 4591 TENNECO Kyrgyzstan KG 3492 28JE1996 TENNECO Latvia M15784 20JE1994 TENNECO Lebanon 71074 TENNECO Lesotho LS/M/91/00413 18AP1996 TENNECO Lesotho 8991 TENNECO Lesotho 9039 TENNECO Lesotho 9044 TENNECO Lesotho 9045 TENNECO & DESIGN Lesotho 8985 TENNECO & DESIGN Lesotho 8986 TENNECO & DESIGN Lesotho 8987 TENNECO & DESIGN Lesotho 8988 TENNECO & DESIGN Lesotho 8989 TENNECO Liberia 22995/385 22SE1995 TENNECO Liberia 131288/907 22MY1967 TENNECO & DESIGN Liberia 22995/386 22SE1995 TENNECO Libya 4902 TENNECO Libya 4903 TENNECO Libya 4904
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TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Libya 4905 TENNECO Libya 4906 TENNECO Libya 4907 TENNECO & DESIGN Libya 4908 TENNECO & DESIGN Libya 4909 TENNECO & DESIGN Libya 4910 TENNECO & DESIGN Libya 4911 TENNECO & DESIGN Libya 4912 TENNECO & DESIGN Libya 4913 TENNECO Lithuania 10297 28MY1993 TENNECO Lithuania 29552 14OC1998 TENNECO Macao 3386 13JL1990 TENNECO Macao 3387 13JL1990 TENNECO Macao 3388 13JL1990 TENNECO Macao 3392 13JL1990 TENNECO & DESIGN Macao 3390 13JL1990 TENNECO & DESIGN Macao 3391 13JL1990 TENNECO & DESIGN Macao 3398 13JL1990 TENNECO & DESIGN Macao 3399 13JL1990 TENNECO & DESIGN Macao 3400 13JL1990 TENNECO & DESIGN Macao 3401 13JL1990 TENNECO Malawi 227/76 15NO1983 TENNECO Malawi 227/76 15NO1983 TENNECO Malawi 408/95 22SE1995 TENNECO Malawi 410/95 22SE1995 TENNECO & DESIGN Malawi 411/95 22SE1995 TENNECO & DESIGN Malawi 412/95 22SE1995 TENNECO & DESIGN Malawi 414/95 22SE1995 TENNECO & DESIGN Malawi 415/95 22SE1995 TENNECO Malaya M/47082-A 16DE1966 TENNECO Malaya M/47083-A 16DE1966 TENNECO Malaya M/47085-A 16DE1966 TENNECO Malaya M/47080-A 16DE1966 TENNECO Malaya M/47081-A 16DE1966 TENNECO Malaya M/47084-A 16DE1966 TENNECO & DESIGN Malaya M/47090-A 16DE1966 TENNECO & DESIGN Malaya M/47086-A 16DE1966 TENNECO & DESIGN Malaya M/47089-A TENNECO & DESIGN Malaya M/47086-A 16DE1966 TENNECO & DESIGN Malaya M/47087-A 16DE1966 TENNECO & DESIGN Malaya M/47088-A TENNECO & DESIGN Malaya M/47090-A 16DE1966 TENNECO & DESIGN Malaya M/47091-A TENNECO & DESIGN Malaya 83/00289 01OC1983 TENNECO Malaysia 047630 12AU1997 TENNECO Malaysia 048482 03OC1997 TENNECO & DESIGN Malaysia 047847 15AU1997 TENNECO & DESIGN Malaysia 048484 03OC1997 TENNECO & DESIGN Malaysia 83/00290 01OC1983 TENNECO Malta 15850 12AU1997 TENNECO Malta 24787 22SE1995 TENNECO Malta 24788 22SE1995 TENNECO & DESIGN Malta 24789 22SE1995 TENNECO & DESIGN Malta 24790 22SE1995
29
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Malta 24792 22SE1995 TENNECO & DESIGN Malta 24793 22SE1995 TENNECO Mexico 131058 28JE1966 TENNECO Mexico 131059 28JE1967 TENNECO Mexico 131061 28JE1966 TENNECO Mexico 131062 28JE1966 TENNECO Mexico 131607 TENNECO Mexico 134285 28JE1986 TENNECO Mexico 466910 19JL1994 TENNECO Mexico 469430 12AU1994 TENNECO & DESIGN Mexico 131053 28JE1986 TENNECO & DESIGN Mexico 131054 28JE1986 TENNECO & DESIGN Mexico 131055 28JE1986 TENNECO & DESIGN Mexico 131056 28JE1986 TENNECO & DESIGN Mexico 131057 28JE1986 TENNECO & DESIGN Mexico 132178 28JE1966 TENNECO & DESIGN Mexico 471522 29AU1994 TENNECO & DESIGN Mexico 131052 28JE1986 TENNECO & DESIGN Mexico 202286 10JE1976 TENNECO & DESIGN Mexico 244981 12MY1980 TENNECO & DESIGN Mexico 471522 29AU1994 TENNECO & DESIGN Moldova 58 08AP1994 TENNECO & DESIGN Moldova 59 08AP1994 TENNECO & DESIGN Mississippi T-274 28AP1961 TENNECO Monoco 9617417 31JA1967 TENNECO & DESIGN Montana 12608 06JL1961 TENNECO & DESIGN Morocco 32225 03MY1982 TENNECO Nepal 11243/052 24DE1995 TENNECO Nepal 11244/052 24DE1995 TENNECO Nepal 11246/052 24DE1995 TENNECO Nepal 11247/052 24DE1995 TENNECO Nepal 11248/052 24DE1995 TENNECO Nepal 11249/052 24DE1995 TENNECO Nepal 11250/052 24DE1995 TENNECO Nepal 11261/052 24DE1995 TENNECO Nepal 11262/052 24DE1995 TENNECO & DESIGN Nepal 11253/052 24DE1995 TENNECO & DESIGN Nepal 11254/052 24DE1995 TENNECO & DESIGN Nepal 11256/052 24DE1995 TENNECO & DESIGN Nepal 11257/052 24DE1995 TENNECO & DESIGN Nepal 11258/052 24DE1995 TENNECO & DESIGN Nepal 11259/052 24DE1995 TENNECO & DESIGN Nepal 11260/052 24DE1995 TENNECO & DESIGN Nepal 11251/052 24DE1995 TENNECO & DESIGN Nepal 11252/052 24DE1995 TENNECO Netherlands Antilles 6822 05JL1998 TENNECO & DESIGN Netherlands Antilles 12823 03MR1983 TENNECO New Zealand A-82948 12DE1987 TENNECO New Zealand A-82947 12DE1987 TENNECO New Zealand A-82946 12DE1987 TENNECO New Zealand A-82945 12DE1987 TENNECO New Zealand A-82944 12DE1987 TENNECO New Zealand A-82943 12DE1987 TENNECO New Zealand 253783 21SE1995
30
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO New Zealand 253784 21SE1995 TENNECO New Zealand 253785 21SE1995 TENNECO New Zealand 253786 21SE1995 TENNECO New Zealand 253787 21SE1995 TENNECO New Zealand 253788 21SE1995 TENNECO New Zealand 253789 21SE1995 TENNECO & DESIGN New Zealand A-82954 12DE1987 TENNECO & DESIGN New Zealand A-82953 12DE1987 TENNECO & DESIGN New Zealand A-82952 12DE1987 TENNECO & DESIGN New Zealand A-82951 12DE1987 TENNECO & DESIGN New Zealand A-82950 12DE1987 TENNECO & DESIGN New Zealand A-82949 12DE1987 TENNECO & DESIGN New Zealand 253790 21SE1995 TENNECO & DESIGN New Zealand 253791 21SE1995 TENNECO & DESIGN New Zealand 253793 21SE1995 TENNECO & DESIGN New Zealand 253794 21SE1995 TENNECO & DESIGN New Zealand 253795 21SE1995 TENNECO & DESIGN New Zealand 253796 21SE1995 TENNECO & DESIGN New Zealand 253797 21SE1995 TENNECO & DESIGN New Zealand 253798 21SE1995 TENNECO & DESIGN New Zealand 253799 21SE1995 TENNECO & DESIGN New Zealand 145947 11FE1983 TENNECO & DESIGN New Zealand 145948 11FE1983 TENNECO Nicaragua 17595 03AP1998 TENNECO Nicaragua 30703 09AP1996 TENNECO Nicaragua 30704 09AP1996 TENNECO Nicaragua 30705 09AP1996 TENNECO Nicaragua 30979 06MY1996 TENNECO Nicaragua 30980 06MY1996 TENNECO Nicaragua 30981 06MY1996 TENNECO Nicaragua 31007 07MY1996 TENNECO & DESIGN Nicaragua 30681 29MR1996 TENNECO & DESIGN Nicaragua 30683 29MR1996 TENNECO & DESIGN Nicaragua 30684 29MR1996 TENNECO & DESIGN Nicaragua 30702 09AP1996 TENNECO & DESIGN Nicaragua 30994 06MY1996 TENNECO & DESIGN Nicaragua 30995 06MY1996 TENNECO & DESIGN Nicaragua 33055 19DE1996 TENNECO & DESIGN Nicaragua 33211 29JA1997 TENNECO & DESIGN Nicaragua 36467 08FE1998 TENNECO & DESIGN Nicaragua 14890 03FE1983 TENNECO Nigeria 54269 22SE1995 TENNECO Nigeria 54270 22SE1995 TENNECO Nigeria 54271 22SE1995 TENNECO Nigeria 54272 22SE1995 TENNECO & DESIGN Nigeria 54273 22SE1995 TENNECO & DESIGN Nigeria 43409 18FE1983 TENNECO Norway 70034 15SE1986 TENNECO Norway 178128 21NO1996 TENNECO & DESIGN Norway 115305 05JA1984 TENNECO O.A.P.I 35497 22SE1995 TENNECO & DESIGN O.A.P.I 35494 22SE1995
31
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Pakistan 46497 20DE1966 TENNECO Pakistan 46500 20DE1966 TENNECO Pakistan 46501 20DE1966 TENNECO Pakistan 46503 20DE1966 TENNECO Pakistan 46504 20DE1966 TENNECO Pakistan 46506 20DE1966 TENNECO & DESIGN Pakistan 46498 20DE1966 TENNECO & DESIGN Pakistan 46499 20DE1966 TENNECO & DESIGN Pakistan 46502 20DE1966 TENNECO & DESIGN Pakistan 46505 20DE1966 TENNECO & DESIGN Pakistan 46507 20DE1966 TENNECO & DESIGN Pakistan 46508 20DE1966 TENNECO & DESIGN Pakistan 96073 15OC1987 TENNECO Panama 13156 18FE1981 TENNECO Panama 67633 18FE1991 TENNECO Panama 67634 18FE1991 TENNECO Panama 67635 18FE1991 TENNECO Panama 67637 18FE1991 TENNECO Panama 67638 18FE1991 TENNECO Panama 67639 18FE1991 TENNECO Panama 67640 18FE1991 TENNECO Panama 67641 18FE1991 TENNECO Panama 77940 23OC1995 TENNECO Panama 77941 23OC1995 TENNECO Panama 77942 23OC1995 TENNECO Panama 77943 23OC1995 TENNECO Panama 77944 23OC1995 TENNECO Panama 77945 23OC1995 TENNECO Panama 77946 23OC1995 TENNECO Panama 77947 23OC1995 TENNECO Panama 79745 29FE1996 TENNECO & DESIGN Panama 13170 19FE1971 TENNECO & DESIGN Panama 60010 19FE1991 TENNECO & DESIGN Panama 60011 19FE1991 TENNECO & DESIGN Panama 60012 19FE1991 TENNECO & DESIGN Panama 60013 19FE1991 TENNECO & DESIGN Panama 60015 19FE1991 TENNECO & DESIGN Panama 60016 19FE1991 TENNECO & DESIGN Panama 60018 19FE1971 TENNECO & DESIGN Panama 77949 23OC1995 TENNECO & DESIGN Panama 77950 23OC1995 TENNECO & DESIGN Panama 77951 23OC1995 TENNECO & DESIGN Panama 77952 23OC1995 TENNECO & DESIGN Panama 77953 23OC1995 TENNECO & DESIGN Panama 77954 23OC1995 TENNECO & DESIGN Panama 77955 23OC1995 TENNECO & DESIGN Panama 77956 23OC1995 TENNECO & DESIGN Panama 77958 23OC1995 TENNECO & DESIGN Panama 34908 09NO1984 TENNECO & DESIGN Panama 34995 17OC1984 TENNECO & DESIGN Panama 38870 30JE1986 TENNECO & DESIGN Panama 38871 26JE1986
32
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Panama 60014 19FE1991 TENNECO Papua New Guinea 59059 25SE1995 TENNECO Papua New Guinea 59060 25SE1995 TENNECO Papua New Guinea 59062 25SE1995 TENNECO Papua New Guinea 59063 25SE1995 TENNECO Papua New Guinea 59064 25SE1995 TENNECO Papua New Guinea 59065 25SE1995 TENNECO Papua New Guinea 59066 25SE1995 TENNECO Papua New Guinea 59067 25SE1995 TENNECO Papua New Guinea 59608 25SE1995 TENNECO & DESIGN Papua New Guinea 59049 25SE1995 TENNECO & DESIGN Papua New Guinea 59050 25SE1995 TENNECO & DESIGN Papua New Guinea 59052 25SE1995 TENNECO & DESIGN Papua New Guinea 59053 25SE1995 TENNECO & DESIGN Papua New Guinea 59054 25SE1995 TENNECO & DESIGN Papua New Guinea 59055 25SE1995 TENNECO & DESIGN Papua New Guinea 59056 25SE1995 TENNECO & DESIGN Papua New Guinea 59057 25SE1995 TENNECO & DESIGN Papua New Guinea 59058 25SE1995 TENNECO Paraguay 125191 30AU1977 TENNECO Paraguay 157564 27OC1982 TENNECO Paraguay 190464 26NO1996 TENNECO & DESIGN Paraguay 157567 27OC1982 TENNECO & DESIGN Paraguay 190162 25NO1996 TENNECO & DESIGN Paraguay 190461 26NO1996 TENNECO & DESIGN Paraguay 157568 27OC1982 TENNECO & DESIGN Paraguay 157569 27OC1982 TENNECO Peru 6713 22MR1996 TENNECO Peru 6714 22MR1996 TENNECO Peru 6715 22MR1996 TENNECO Peru 6797 01AP1996 TENNECO Peru 6852 08AP1996 TENNECO Peru 23951 05MR1996 TENNECO Peru 24096 11MR1996 TENNECO Peru 24863 08AP1996 TENNECO Peru 71405 23OC1987 TENNECO Peru 71406 23OC1987 TENNECO Peru 83677 02JA1990 TENNECO & DESIGN Peru 6605 11MR1996 TENNECO & DESIGN Peru 6606 11MR1996 TENNECO & DESIGN Peru 6711 22MR1996 TENNECO & DESIGN Peru 6712 22MR1996 TENNECO & DESIGN Peru 6886 12AP1996 TENNECO & DESIGN Peru 24097 11MR1996 TENNECO & DESIGN Peru 24183 13MR1996 TENNECO & DESIGN Peru 24524 22MR1996 TENNECO & DESIGN Peru 24862 08AP1996 TENNECO & DESIGN Peru 69778 13AU1987 TENNECO & DESIGN Peru 72038 07DE1987 TENNECO & DESIGN Peru 72039 07DE1987 TENNECO & DESIGN Peru 46741 09DE1982 TENNECO & DESIGN Peru 46744 09DE1982
33
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Poland 59305 TENNECO Portugal 312665 15JA1997 TENNECO Qatar 7859 15FE1990 TENNECO Qatar 7860 28MY1995 TENNECO Qatar 7861 28MY1995 TENNECO & DESIGN Qatar 7865 15FE1990 TENNECO & DESIGN Qatar 7866 28MY1995 TENNECO & DESIGN Qatar 7867 15FE1990 TENNECO & DESIGN Qatar 7868 28MY1995 TENNECO & DESIGN Qatar 7869 15FE1990 TENNECO & DESIGN Qatar 7870 15FE1990 TENNECO & DESIGN Ras Al-Khaimah 3061 30JE1982 TENNECO Ras Al-Khaimah 3051 30JE1982 TENNECO Ras Al-Khaimah 3054 30JE1982 TENNECO & DESIGN Ras Al-Khaimah 3058 30JE1982 TENNECO & DESIGN Ras Al-Khaimah 3062 30JE1982 TENNECO & DESIGN Rhode Island NONE 20MR1961 TENNECO Romania 25508 13OC1997 TENNECO & DESIGN Romania 12633 TENNECO Russia 38061 TENNECO & DESIGN Russia 38062 TENNECO & DESIGN Russia 72144 TENNECO & DESIGN Russia 74512 05MY1983 TENNECO Russian Federation 166908 18AU1998 TENNECO & DESIGN Russian Federation 72144 TENNECO & DESIGN Russian Federation 74512 05MY1983 TENNECO Sabah 11710 TENNECO Sabah 11711 28AP1967 TENNECO Sabah 11712 28AP1967 TENNECO Sabah 11713 28AP1967 TENNECO Sabah 11714 28AP1967 TENNECO Sabah 11715 28AP1967 TENNECO & DESIGN Sabah 11704 28AP1967 TENNECO & DESIGN Sabah 11705 28AP1967 TENNECO & DESIGN Sabah 11706 TENNECO & DESIGN Sabah 11707 TENNECO & DESIGN Sabah 11708 28AP1967 TENNECO & DESIGN Sabah 11709 TENNECO & DESIGN Sabah 31593 28FE1983 TENNECO Sarawak 7045 26AU1967 TENNECO Sarawak 7223 26AU1967 TENNECO Sarawak 7224 26AU1967 TENNECO Sarawak 7226 26AU1967 TENNECO Sarawak 7228 26AU1967 TENNECO Sarawak 7231 26AU1967 TENNECO & DESIGN Sarawak 7044 19AU1967 TENNECO & DESIGN Sarawak 7222 26AU1967
34
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Sarawak 7225 26AU1967 TENNECO & DESIGN Sarawak 7227 26AU1967 TENNECO & DESIGN Sarawak 7229 26AU1967 TENNECO & DESIGN Sarawak 7230 26AU1967 TENNECO & DESIGN Sarawak 26954 06AP1983 TENNECO & DESIGN Sarawak 26955 06AP1983 TENNECO Saudi Arabia 386/48 15OC1996 TENNECO Saudi Arabia 386/46 16OC1996 TENNECO Saudi Arabia 386/44 15OC1996 TENNECO Saudi Arabia 386/42 15OC1996 TENNECO Saudi Arabia 386/40 15OC1996 TENNECO Saudi Arabia 386/38 15OC1996 TENNECO Saudi Arabia 386/34 15OC1996 TENNECO Saudi Arabia 386/32 15OC1996 TENNECO Saudi Arabia 274/18 25JA1993 TENNECO Saudi Arabia 274/17 25JA1993 TENNECO Saudi Arabia 274/16 25JA1993 TENNECO Saudi Arabia 274/15 25JA1993 TENNECO Saudi Arabia 274/14 15JA1993 TENNECO & DESIGN Saudi Arabia 386/41 15OC1996 TENNECO & DESIGN Saudi Arabia 274/13 25JA1993 TENNECO & DESIGN Saudi Arabia 274/12 25JA1993 TENNECO & DESIGN Saudi Arabia 274/11 25JA1993 TENNECO & DESIGN Saudi Arabia 274/10 25JA1993 TENNECO & DESIGN Saudi Arabia 118/21 TENNECO Singapore T/95/09068F 22SE1995 TENNECO Singapore T95/09069D 22SE1995 TENNECO Singapore 4992/83 20SE1983 TENNECO Singapore 9054/95 22SE1995 TENNECO Singapore 9060/95 22SE1995 TENNECO Singapore 9062/95 22SE1995 TENNECO Singapore 40765 19DE1966 TENNECO Singapore 40766 19DE1966 TENNECO Singapore 40767 19DE1966 TENNECO Singapore 40768 19DE1966 TENNECO Singapore 40769 19DE1966 TENNECO Singapore 40772 19DE1966 TENNECO & DESIGN Singapore T95/09055D 22SE1995 TENNECO & DESIGN Singapore T95/09058I 22SE1995 TENNECO & DESIGN Singapore 9056/95 22SE1995 TENNECO & DESIGN Singapore 9061/95 22SE1995 TENNECO & DESIGN Singapore 9067/95 22SE1995 TENNECO & DESIGN Singapore 9070.95 22SE1995 TENNECO & DESIGN Singapore 40770 19DE1966 TENNECO & DESIGN Singapore 40771 19DE1966 TENNECO & DESIGN Singapore 40773 19DE1966 TENNECO & DESIGN Singapore 40774 19DE1966 TENNECO & DESIGN Singapore 40775 19DE1966 TENNECO & DESIGN Singapore 40776 19DE1966 TENNECO & DESIGN Singapore 4998/83 20SE1983 TENNECO South Africa 95/12646 08OC1998 TENNECO South Africa 95/12645 08OC1998 TENNECO South Africa 95/12644 08OC1998
35
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO South Africa 95/12643 08OC1998 TENNECO South Africa 95/12642 08OC1998 TENNECO South Africa 95/12641 08OC1998 TENNECO South Africa 66/1506 TENNECO South Africa 66/1504 TENNECO South Africa 95/1247 08OC1998 TENNECO & DESIGN South Africa 95/12657 22SE1995 TENNECO & DESIGN South Africa 95/12656 22SE1995 TENNECO & DESIGN South Africa 95/12655 22SE1995 TENNECO & DESIGN South Africa 95/12654 22SE1995 TENNECO & DESIGN South Africa 95/12653 22SE1995 TENNECO & DESIGN South Africa 95/12652 22SE1995 TENNECO & DESIGN South Africa 95/12651 22SE1995 TENNECO & DESIGN South Africa 95/12649 22SE1995 TENNECO & DESIGN South Africa 95/12648 22SE1995 TENNECO & DESIGN South Africa 82/7627 TENNECO & DESIGN South Africa 82/7626 TENNECO & DESIGN South Carolina 2109 27AP1961 TENNECO South Korea 225677 12NO1991 TENNECO South Korea 367481 03JL1997 TENNECO & DESIGN South Korea 36648 13JE1997 TENNECO & DESIGN South Korea 373072 25AU1997 TENNECO South Korea 362065 16MY1997 TENNECO South Korea 364940 13JE1997 TENNECO South Korea 362736 22MY1997 TENNECO South Korea 36598 11JE1997 TENNECO South Korea 36599 11JE1997 TENNECO South Korea 36589 25SE1995 TENNECO South Korea 36590 10JE1997 TENNECO South Korea 36647 12JE1997 TENNECO South Korea 375810 23SE1997 TENNECO South Korea supp to 88588 TENNECO & DESIGN South Korea 367482 03JL1997 TENNECO & DESIGN South Korea 362066 16MY1997 TENNECO & DESIGN South Korea 364941 13JE1997 TENNECO & DESIGN South Korea 381795 12NO1997 TENNECO & DESIGN South Korea 362737 23MY1997 TENNECO & DESIGN South Korea 378534 17OC1997 TENNECO & DESIGN South Korea 36591 10JE1997 TENNECO & DESIGN South Korea 36592 10JE1997 TENNECO & DESIGN South Korea 36593 10JE1997 TENNECO & DESIGN South Korea 36594 10JE1997 TENNECO & DESIGN South Korea 381794 12NO1997 TENNECO & DESIGN South Korea 375811 26SE1997 TENNECO & DESIGN South Korea 91592 09JE1983 TENNECO Spain 502045 10OC1967 TENNECO Spain 502047 10OC1967 TENNECO Spain 502049 03JL1967 TENNECO Spain 502051 12SE1968 TENNECO Spain 1986601 22SE1995 TENNECO Spain 1986602 22SE1995 TENNECO Spain 1986603 05MR1996 TENNECO Spain 1986604 05MR1996 TENNECO Spain 1986605 05MR1996 TENNECO Spain 1986606 05MR1996
36
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Spain 1986591 22SE1995 TENNECO & DESIGN Spain 1986592 22SE1995 TENNECO & DESIGN Spain 1986594 05JL1996 TENNECO & DESIGN Spain 1986595 05JL1996 TENNECO & DESIGN Spain 1986596 05MR1996 TENNECO & DESIGN Spain 1986597 05MR1996 TENNECO & DESIGN Spain 1986598 05MR1996 TENNECO & DESIGN Spain 1986599 05MR1996 TENNECO & DESIGN Spain 1986600 05MR1996 TENNECO Sri Lanka 30343 11JE1982 TENNECO Sri Lanka 30344 TENNECO Sri Lanka 48281 05OC1984 TENNECO Sri Lanka 75827 22SE1995 TENNECO & DESIGN Sri Lanka 30341 TENNECO & DESIGN Sri Lanka 30342 11JE1968 TENNECO & DESIGN Sri Lanka 48287 05OC1984 TENNECO & DESIGN Sri Lanka 75812 22SE1995 TENNECO & DESIGN Sri Lanka 75813 22SE1995 TENNECO & DESIGN Sri Lanka 75814 22SE1995 TENNECO & DESIGN Sri Lanka 75816 22SE1995 TENNECO & DESIGN Sri Lanka 75817 22SE1995 TENNECO & DESIGN Sri Lanka 75818 22SE1995 TENNECO & DESIGN Sri Lanka 48288 05OC1984 TENNECO & DESIGN Sri Lanka 48289 05OC1984 TENNECO Sudan 10599 13MY1987 TENNECO Sudan 24523 22NO1997 TENNECO Sudan 24524 22NO1997 TENNECO Sudan 24525 22NO1997 TENNECO Sudan 24526 22NO1997 TENNECO Sudan 24527 22NO1997 TENNECO Sudan 24528 22NO1997 TENNECO Sudan 24529 22NO1997 TENNECO Sudan 24530 22NO1997 TENNECO Sudan 24531 22NO1997 TENNECO & DESIGN Sudan 24532 22NO1997 TENNECO & DESIGN Sudan 24533 22NO1997 TENNECO & DESIGN Sudan 24535 22NO1997 TENNECO & DESIGN Sudan 24536 22NO1997 TENNECO & DESIGN Sudan 24537 22NO1997 TENNECO & DESIGN Sudan 24538 22NO1997 TENNECO & DESIGN Sudan 24539 22NO1997 TENNECO & DESIGN Sudan 24540 22NO1997 TENNECO & DESIGN Sudan 24541 22NO1997 TENNECO & DESIGN Sweden 189244 09DE1983 TENNECO Switzerland 352380 03AU1986 TENNECO & DESIGN Switzerland 347574 19AP1966 TENNECO & DESIGN Switzerland 326951 TENNECO Syria 7029 11MR1982 TENNECO & DESIGN Syria 7030 11MR1967 TENNECO & DESIGN Syria 30189 08MY1982 TENNECO Taiwan 80949 31JA1996 TENNECO Taiwan 82260 01MY1996
37
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Taiwan 84796 16SE1996 TENNECO Taiwan 89858 01AP1997 TENNECO Taiwan 96208 01JA1994 TENNECO Taiwan 97043 01AP1996 TENNECO Taiwan 729663 01OC1996 TENNECO Taiwan 737253 01DE1996 TENNECO Taiwan 738069 01DE1996 TENNECO Taiwan 764987 16JE1996 TENNECO & DESIGN Taiwan 84822 16SE1996 TENNECO & DESIGN Taiwan 87029 16DE1996 TENNECO & DESIGN Taiwan 88226 01FE1997 TENNECO & DESIGN Taiwan 90697 15SE1995 TENNECO & DESIGN Taiwan 97042 01AP1996 TENNECO & DESIGN Taiwan 729758 01OC1996 TENNECO & DESIGN Taiwan 737289 01DE1996 TENNECO & DESIGN Taiwan 738137 01DE1996 TENNECO & DESIGN Taiwan 765008 16JE1996 TENNECO & DESIGN Taiwan 765007 16JE1996 (CHINESE CHARACTERS) TENNECO & DESIGN Taiwan 86292 16NO1996 (IN CHINESE) TENNECO & DESIGN Taiwan 86680 01DE1996 (IN CHINESE) TENNECO & DESIGN Taiwan 87128 16DE1996 (IN CHINESE) TENNECO & DESIGN Taiwan 87308 16DE1996 (IN CHINESE) TENNECO & DESIGN Taiwan 89448 16SE1995 (IN CHINESE) TENNECO & DESIGN Taiwan 729759 01OC1996 (IN CHINESE) TENNECO & DESIGN Taiwan 737296 01DE1996 (IN CHINESE) TENNECO & DESIGN Taiwan 738142 01DE1996 (IN CHINESE) TENNECO & DESIGN Taiwan 82469 16AP1996 TENNECO & DESIGN Taiwan 78149 16SE1995 TENNECO Taiwan 73899 01JA1995 TENNECO Taiwan 78133 16SE1995 TENNECO Taiwan 74594 16DE1996 TENNECO Taiwan 738069 01DE1996 TENNECO & DESIGN Taiwan 74699 01MR1995 TENNECO & DESIGN Taiwan 198801 01DE1982 TENNECO & DESIGN Taiwan 247957 30JE1983 TENNECO & DESIGN Taiwan 83918 01JA1995 TENNECO (IN CHINESE) Taiwan 84797 16SE1996 TENNECO (IN CHINESE) Taiwan 86291 15NO1996 TENNECO (IN CHINESE) Taiwan 86640 01DE1996 TENNECO (IN CHINESE) Taiwan 87031 16DE1996 TENNECO (IN CHINESE) Taiwan 87305 16DE1996 TENNECO (IN CHINESE) Taiwan 729664 01OC1996 TENNECO (IN CHINESE) Taiwan 737254 01DE1996 TENNECO (IN CHINESE) Taiwan 738070 01DE1996 TENNECO (IN CHINESE) Taiwan 764986 16JE1996 TENNECO Tajikistan TJ2183 22JE1995
38
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Tajikistan TJ3177 04AU1998 TENNECO & DESIGN Tajikistan TJ3178 04AU1998 TENNECO & DESIGN Tajikistan TJ 2185 22JE1995 TENNECO & DESIGN Tajikistan TJ 2186 22JE1995 TENNECO & DESIGN Tajikistan TJ 2187 22JE1995 TENNECO Thailand 4664 22SE1995 TENNECO Thailand 4665 22SE1995 TENNECO Thailand 4666 22SE1995 TENNECO Thailand 4667 22SE1995 TENNECO Thailand 4971 22SE1995 TENNECO Thailand 48009 22SE1995 TENNECO Thailand 49218 22SE1995 TENNECO & DESIGN Thailand 4662 22SE1995 TENNECO & DESIGN Thailand 4663 22SE1995 TENNECO & DESIGN Thailand 4673 22SE1995 TENNECO & DESIGN Thailand 4695 22SE1995 TENNECO & DESIGN Thailand 4970 22SE1995 TENNECO & DESIGN Thailand 46821 22SE1995 TENNECO & DESIGN Thailand 47661 22SE1995 TENNECO & DESIGN Thailand 49225 22SE1995 TENNECO & DESIGN Thailand 49226 22SE1995 TENNECO & DESIGN Thailand 4668 22SE1995 (THAI) TENNECO & DESIGN Thailand 4669 22SE1995 (THAI) TENNECO & DESIGN Thailand 4670 22SE1995 (THAI) TENNECO & DESIGN Thailand 4973 22SE1995 (THAI) TENNECO & DESIGN Thailand 4974 22SE1995 (THAI) TENNECO & DESIGN Thailand 46819 22SE1995 (THAI) TENNECO & DESIGN Thailand 47709 01AU1996 (THAI) TENNECO & DESIGN Thailand 49227 22SE1995 (THAI) TENNECO & DESIGN Thailand 49969 22SE1995 (THAI) TENNECO (THAI) Thailand Kor82629 13NO1997 TENNECO (THAI) Thailand 4645 22SE1995 TENNECO (THAI) Thailand 4646 22SE1995 TENNECO (THAI) Thailand 4671 22SE1995 TENNECO (THAI) Thailand 4672 22SE1995 TENNECO (THAI) Thailand 4975 22SE1995 TENNECO (THAI) Thailand 46820 22SE1995 TENNECO (THAI) Thailand 49224 22SE1995 TENNECO (THAI) Thailand 49228 22SE1995 TENNECO (THAI) Thailand 49229 22SE1995 TENNECO Transkei 66/1506 TENNECO Transkei 66/1504 TENNECO & DESIGN Transkei 66/1511 TENNECO & DESIGN Transkei 66/1509
39
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO Trinidad 24591 22SE1995 TENNECO & DESIGN Trinidad 24590 22SE1995 TENNECO Tunisia 211/82 TENNECO Turkey 136877 15SE1992 TENNECO & DESIGN Turkey 137059 15SE1992 TENNECO & DESIGN Ukraine 4387 15AP1994 TENNECO & DESIGN Ukraine 4388 15AP1994 TENNECO United Arab Emirates 13887 20NO1995 TENNECO United Arab Emirates 13888 20NO1995 TENNECO Uruguay 278254 10SE1995 TENNECO & DESIGN Uzbekistan 1489 26SE1994 TENNECO & DESIGN Uzbekistan 1491 01OC1994 TENNECO Venda 66/1506 TENNECO Venda 66/1504 TENNECO & DESIGN Venda 66/1511 TENNECO & DESIGN Venda 66/1509 TENNECO Venezuela 57606 15AP1970 TENNECO Venezuela 57607 15AP1970 TENNECO Venezuela 57608 15AP1970 TENNECO Venezuela 57614 15AP1970 TENNECO Venezuela 57605 15AP1970 TENNECO Venezuela 57604 15AP1970 TENNECO Venezuela 57603 15AP1970 TENNECO Venezuela 57602 15AP1970 TENNECO Venezuela 57616 15AP1970 TENNECO Venezuela 118141 22AP1986 TENNECO Venezuela 118142 22AP1986 TENNECO Venezuela 118139 22AP1986 TENNECO & DESIGN Venezuela 57601 14AP1970 TENNECO & DESIGN Venezuela 57613 15AP1970 TENNECO & DESIGN Venezuela 57612 15AP1970 TENNECO & DESIGN Venezuela 57600 14AP1970 TENNECO & DESIGN Venezuela 57617 15AP1970 TENNECO & DESIGN Venezuela 57619 15AP1970
40
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Venezuela 57618 15AP1970 TENNECO & DESIGN Venezuela 57620 15AP1970 TENNECO & DESIGN Venezuela 57611 15AP1970 TENNECO & DESIGN Venezuela 118144 22AP1986 TENNECO & DESIGN Venezuela 118146 22AP1986 TENNECO & DESIGN Venezuela 118143 22AP1986 TENNECO & DESIGN Venezuela 118145 22AP1986 TENNECO Vietnam 21124 19JE1996 TENNECO & DESIGN Vietnam 19165 23NO1995 TENNECO West Germany 896205/4 TENNECO & DESIGN West Virginia NONE 10FE1961 TENNECO Yemen Arab 5918 21SE1995 TENNECO Yemen Arab 5919 21SE1995 TENNECO Yemen Arab 5921 21SE1995 TENNECO Yemen Arab 5922 21SE1995 TENNECO Yemen Arab 5923 21SE1995 TENNECO Yemen Arab 5924 21SE1995 TENNECO Yemen Arab 5925 21SE1995 TENNECO Yemen Arab 5926 21SE1995 TENNECO Yemen Arab 5927 21SE1995 TENNECO & DESIGN Yemen Arab 5921 21SE1995 TENNECO & DESIGN Yemen Arab 5928 21SE1995 TENNECO & DESIGN Yemen Arab 5929 21SE1995 TENNECO & DESIGN Yemen Arab 5931 21SE1995 TENNECO & DESIGN Yemen Arab 5933 21SE1995 TENNECO & DESIGN Yemen Arab 5934 21SE1995 TENNECO & DESIGN Yemen Arab 5935 21SE1995 TENNECO & DESIGN Yemen Arab 5936 21SE1995 TENNECO & DESIGN Yemen Arab 5937 21SE1995 TENNECO & DESIGN Zaire 2606/91 05JL1991 TENNECO Zimbabwe 482/68 05JE1968 TENNECO Zimbabwe 483/68 05JE1968 TENNECO Zimbabwe 484/68 05JE1968 TENNECO Zimbabwe 485/68 05JE1968 TENNECO Zimbabwe 1359/95 22SE1995 TENNECO Zimbabwe 1361/95 22SE1995 TENNECO Zimbabwe 1362/95 22SE1995 TENNECO Zimbabwe 1363/95 22SE1995 TENNECO Zimbabwe 1364/95 22SE1995 TENNECO Zimbabwe 1365/95 22SE1995 TENNECO Zimbabwe 1366/95 22SE1995 TENNECO Zimbabwe 1367/95 22SE1995 TENNECO & DESIGN Zimbabwe 486/68 05JE1968 TENNECO & DESIGN Zimbabwe 488/68 05JE1968 TENNECO & DESIGN Zimbabwe 489/68 05JE1968 TENNECO & DESIGN Zimbabwe 1368/95 22SE1995 TENNECO & DESIGN Zimbabwe 1369/95 22SE1995 TENNECO & DESIGN Zimbabwe 1371/95 22SE1995 TENNECO & DESIGN Zimbabwe 1372/95 22SE1995
41
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE TENNECO & DESIGN Zimbabwe 1373/95 22SE1995 TENNECO & DESIGN Zimbabwe 1374/95 22SE1995 TENNECO & DESIGN Zimbabwe 1375/95 22SE1995 TENNECO & DESIGN Zimbabwe 1376/95 22SE1995 TENNECO & DESIGN Zimbabwe 1377/95 22SE1995
42 FOREIGN TRADEMARK APPLICATIONS
TRADEMARK COUNTRY APPLICATION No. APPLICATION Date TENNECO Azerbaijan 1088-IIPT 31MR1994 TENNECO Azerbaijan 95.1928/3 22SE1995 TENNECO & DESIGN Azerbaijan 95.1927/3 22SE1995 TENNECO & DESIGN Azerbaijan 1122-IIPT 31MR1994 TENNECO & DESIGN Azerbaijan 1123-HPT 31MR1994 TENNECO & DESIGN Azerbaijan 1124-HPT 31MR1994 TENNECO Bangladesh 44884 21SE1995 TENNECO Bangladesh 44885 21SE1995 TENNECO & DESIGN Bangladesh 44800 21SE1995 TENNECO & DESIGN Bangladesh 44879 21SE1995 TENNECO & DESIGN Bangladesh 44881 21SE1995 TENNECO & DESIGN Bangladesh 44882 21SE1995 TENNECO & DESIGN Bangladesh 44883 21SE1995 TENNECO Barbados P2853 22SE1995 TENNECO Barbados P2854 22SE1995 TENNECO Barbados P2855 22SE1995 TENNECO Barbados P2856 22SE1995 TENNECO Barbados P2857 22SE1995 TENNECO Barbados P2858 22SE1995 TENNECO Barbados P2859 22SE1995 TENNECO & DESIGN Barbados P2860 22SE1995 TENNECO & DESIGN Barbados P2861 22SE1995 TENNECO & DESIGN Barbados P2862 22SE1995 TENNECO & DESIGN Barbados P2863 22SE1995 TENNECO & DESIGN Barbados P2864 22SE1995 TENNECO & DESIGN Barbados P2865 22SE1995 TENNECO & DESIGN Barbados P2866 22SE1995 TENNECO & DESIGN Barbados P2867 22SE1995 TENNECO & DESIGN Barbados P2868 22SE1995 TENNECO & DESIGN Barbados P2869 22SE1995 TENNECO Bermuda 27203 22SE1995 TENNECO Bermuda 27205 22SE1995 TENNECO & DESIGN Bermuda 27212 22SE1995 TENNECO & DESIGN Bermuda 27214 22SE1995 TENNECO Brazil 818.783.451 22SE1995 TENNECO Brazil 818.783.460 22SE1995 TENNECO Brazil 818.783.478 22SE1995 TENNECO Brazil 818.783.486 22SE1995 TENNECO & DESIGN Brazil 818.783.494 22SE1995 TENNECO & DESIGN Brazil 818.783.516 22SE1996 TENNECO & DESIGN Brazil 818.783.524 22SE1996 TENNECO & DESIGN Brazil 818.783.540 22SE1996 TENNECO & DESIGN Brazil 818.783.559 22SE1996 TENNECO & DESIGN Brazil 818.783.567 22SE1996 TENNECO & DESIGN Brazil 818.783.508 22SE1996 TENNECO & DESIGN Brazil 818.783.532 22SE1996 TENNECO & DESIGN Brazil 818.783.575 22SE1996 TENNECO & DESIGN Brazil 818.783.583 22SE1996 TENNECO Burundi 3045/BUR 25SE1995 TENNECO & DESIGN Burundi 3046/BUR 25SE1995 TENNECO & DESIGN Chile 320573 22SE1995 TENNECO & DESIGN Chile 320575 22SE1995
43
TRADEMARK COUNTRY APPLICATION No. APPLICATION Date TENNECO Costa Rica 6660-95 22SE1995 TENNECO Costa Rica 6661-95 22SE1995 TENNECO Costa Rica 6662-95 22SE1995 TENNECO Costa Rica 6663-95 22SE1995 TENNECO Costa Rica 6664-95 22SE1995 TENNECO Costa Rica 6665-95 22SE1995 TENNECO Costa Rica 6666-95 22SE1995 TENNECO Costa Rica 6667-95 22SE1995 TENNECO Costa Rica 6668-95 22SE1995 TENNECO & DESIGN Costa Rica 6651-95 22SE1995 TENNECO & DESIGN Costa Rica 6652-95 22SE1995 TENNECO & DESIGN Costa Rica 6653-95 22SE1995 TENNECO & DESIGN Costa Rica 6654-95 22SE1995 TENNECO & DESIGN Costa Rica 6655-95 22SE1995 TENNECO & DESIGN Costa Rica 6656-95 22SE1995 TENNECO & DESIGN Costa Rica 6657-95 22SE1995 TENNECO & DESIGN Costa Rica 6658-95 22SE1995 TENNECO & DESIGN Costa Rica 6659-95 22SE1995 TENNECO & DESIGN Costa Rica 6732-95 22SE1995 TENNECO Cyprus 44942 02AP1996 TENNECO Egypt 97526 21SE1995 TENNECO Egypt 97527 21SE1995 TENNECO Egypt 97528 21SE1995 TENNECO Egypt 97529 21SE1995 TENNECO Egypt 97530 21SE1995 TENNECO Egypt 97531 21SE1995 TENNECO Egypt 97532 21SE1995 TENNECO & DESIGN Egypt 97516 21SE1995 TENNECO & DESIGN Egypt 97517 21SE1995 TENNECO & DESIGN Egypt 97519 21SE1995 TENNECO & DESIGN Egypt 97520 21SE1995 TENNECO & DESIGN Egypt 97521 21SE1995 TENNECO & DESIGN Egypt 97522 21SE1995 TENNECO & DESIGN Egypt 97523 21SE1995 TENNECO & DESIGN Egypt 97524 21SE1995 TENNECO & DESIGN Egypt 97525 21SE1995 TENNECO El Salvador 000423 28AP1994 TENNECO & DESIGN El Salvador 4199/95 22SE1995 TENNECO Georgia 9305/03 22SE1995 TENNECO & DESIGN Georgia 9306/03 22SE1995 TENNECO Ghana 26695 22SE1995 TENNECO Ghana 26789 22SE1995 TENNECO Ghana 26791 22SE1995 TENNECO & DESIGN Ghana 26694 22SE1995 TENNECO & DESIGN Ghana 26697 22SE1995 TENNECO & DESIGN Ghana 26786 22SE1995 TENNECO & DESIGN Ghana 26788 22SE1995 TENNECO Guatemala 95-06728 21SE1995 TENNECO Guatemala 95-06729 21SE1995 TENNECO Guatemala 95-06730 21SE1995 TENNECO Guatemala 95-06731 21SE1995 TENNECO Guatemala 95-06733 21SE1995 TENNECO & DESIGN Guatemala 95006737 21SE1995 TENNECO & DESIGN Guatemala 95006738 21SE1995 TENNECO & DESIGN Guatemala 95006742 21SE1995 TENNECO & DESIGN Guatemala 95-06734 21SE1995 TENNECO & DESIGN Guatemala 95-06740 21SE1995
44
TRADEMARK COUNTRY APPLICATION No. APPLICATION Date TENNECO & DESIGN Guatemala 95-07057 21SE1995 TENNECO & DESIGN Hong Kong 95 11905 22SE1995 TENNECO India 681166 22SE1995 TENNECO India 681167 22SE1995 TENNECO & DESIGN India 681161 22SE1995 TENNECO & DESIGN India 681163 22SE1995 TENNECO & DESIGN India 681164 22SE1995 TENNECO & DESIGN India 681165 22SE1995 TENNECO Indonesia D9517368 22SE1995 TENNECO & DESIGN Indonesia D9517363 22SE1995 TENNECO & DESIGN Indonesia D9517373 22SE1995 TENNECO Ireland 176716 21SE1995 TENNECO Ireland 176717 21SE1995 TENNECO & DESIGN Ireland 176711 21SE1995 TENNECO & DESIGN Ireland 176714 21SE1995 TENNECO Jamaica 21/326 22SE1995 TENNECO Jamaica 6/319 22SE1995 TENNECO & DESIGN Jamaica 12/714 22SE1995 TENNECO & DESIGN Jamaica 21/327 22SE1995 TENNECO Japan 98125/1995 22SE1995 TENNECO Japan 98126/1995 22SE1995 TENNECO Japan 98127/1995 22SE1995 TENNECO Japan 98128/1995 22SE1995 TENNECO Japan 98130/1995 22SE1995 TENNECO & DESIGN Japan 98145/1995 22SE1995 TENNECO & DESIGN Japan 98146/1995 22SE1995 TENNECO & DESIGN Japan 98147/1995 22SE1995 TENNECO & DESIGN Japan 98148/1995 22SE1995 TENNECO & DESIGN Japan 98150/1995 22SE1995 TENNECO & DESIGN Japan 98155/1995 22SE1995 (IN KATAKANA) TENNECO & DESIGN Japan 98156/1995 22SE1995 (IN KATAKANA) TENNECO & DESIGN Japan 98157/1995 22SE1995 (IN KATAKANA) TENNECO & DESIGN Japan 98158/1995 22SE1995 (IN KATAKANA) TENNECO & DESIGN Japan 98160/1995 22SE1995 (IN KATAKANA) TENNECO (IN Japan 98131/1995 22SE1995 KATAKANA) TENNECO (IN Japan 98135/1995 22SE1995 KATAKANA) TENNECO (IN Japan 98136/1995 22SE1995 KATAKANA) TENNECO (IN Japan 98138/1995 22SE1995 KATAKANA) TENNECO (IN Japan 98140/1995 22SE1995 KATAKANA) TENNECO & DESIGN Kazakstan 7853 22SE1995 TENNECO Kenya SMA/0511 22SE1995 TENNECO Kuwait 31866 20SE1995 TENNECO Kuwait 31868 20SE1995 TENNECO Kuwait 31869 20SE1995 TENNECO Kuwait 31870 20SE1995 TENNECO Kuwait 31871 20SE1995 TENNECO Kuwait 31872 20SE1995
45
TRADEMARK COUNTRY APPLICATION No. APPLICATION Date TENNECO Kuwait 31873 20SE1995 TENNECO & DESIGN Kuwait 31874 20SE1995 TENNECO & DESIGN Kuwait 31875 20SE1995 TENNECO & DESIGN Kuwait 31877 20SE1995 TENNECO & DESIGN Kuwait 31878 20SE1995 TENNECO & DESIGN Kuwait 31879 20SE1995 TENNECO & DESIGN Kuwait 31880 20SE1995 TENNECO & DESIGN Kuwait 31881 20SE1995 TENNECO & DESIGN Kuwait 31882 20SE1995 TENNECO & DESIGN Kuwait 31883 20SE1995 TENNECO & DESIGN Kyrgyzstan 951248.3 22SE1995 TENNECO & DESIGN Lebanon 31882 22SE1995 TENNECO & DESIGN Lebanon 31883 22SE1995 TENNECO Lesotho LS/M/95/00734 22SE1995 TENNECO & DESIGN Lesotho LS/M/95/00728 22SE1995 TENNECO Malaysia 95/09995 23SE1995 TENNECO Malaysia 95/10001 23SE1995 TENNECO & DESIGN Malaysia 95/09994 23SE1995 TENNECO & DESIGN Malaysia 95/09998 23SE1995 TENNECO Mexico 191448 21FE1994 TENNECO Mexico 243772 22SE1995 TENNECO Mexico 243773 22SE1995 TENNECO Mexico 243774 22SE1995 TENNECO Mexico 243775 22SE1995 TENNECO Mexico 243776 22SE1995 TENNECO Mexico 243777 22SE1995 TENNECO Mexico 243778 22SE1995 TENNECO Mexico 243779 22SE1995 TENNECO & DESIGN Mexico 243758 22SE1995 TENNECO & DESIGN Mexico 243759 22SE1995 TENNECO & DESIGN Mexico 243760 22SE1995 TENNECO & DESIGN Mexico 243761 22SE1995 TENNECO & DESIGN Mexico 243762 22SE1995 TENNECO & DESIGN Mexico 243766 22SE1995 TENNECO & DESIGN Mexico 243767 22SE1995 TENNECO & DESIGN Mexico 243769 22SE1995 TENNECO & DESIGN Mexico 243770 22SE1995 TENNECO Morocco 57529 22SE1995 TENNECO & DESIGN Morocco 57528 22SE1995 TENNECO & DESIGN Nigeria TP.25076 22SE1995 TENNECO & DESIGN Nigeria TP.25078 22SE1995 TENNECO & DESIGN Nigeria TP.25080 22SE1995 TENNECO & DESIGN Nigeria TP.25082 22SE1995 TENNECO & DESIGN Nigeria 43406/83/4 08MR1983 TENNECO & DESIGN Nigeria 43407/83/4 08MR1983 TENNECO Oman 12237 20SE1995 TENNECO Oman 12238 20SE1995 TENNECO Oman 12239 20SE1995 TENNECO Oman 12240 20SE1995 TENNECO Oman 12241 20SE1995 TENNECO Oman 12242 20SE1995 TENNECO Oman 5762 09JL1991 TENNECO Oman 5763 09JL1991 TENNECO Oman 5764 09JL1991 TENNECO Oman 5765 09JL1991 TENNECO Oman 5768 09JL1991
46
TRADEMARK COUNTRY APPLICATION No. APPLICATION Date TENNECO Oman 5769 09JL1991 TENNECO & DESIGN Oman 12243 20SE1995 TENNECO & DESIGN Oman 12244 20SE1995 TENNECO & DESIGN Oman 12246 20SE1995 TENNECO & DESIGN Oman 12247 20SE1995 TENNECO & DESIGN Oman 12248 20SE1995 TENNECO & DESIGN Oman 12249 20SE1995 TENNECO & DESIGN Oman 12250 20SE1995 TENNECO & DESIGN Oman 12251 20SE1995 TENNECO & DESIGN Oman 12252 20SE1995 TENNECO & DESIGN Oman 5770 09JL1991 TENNECO & DESIGN Oman 5771 09JL1991 TENNECO & DESIGN Oman 5772 09JL1991 TENNECO & DESIGN Oman 5773 09JL1991 TENNECO & DESIGN Oman 5774 09JL1991 TENNECO & DESIGN Oman 5775 09JL1991 TENNECO & DESIGN Oman 5776 09JL1991 TENNECO & DESIGN Oman 5777 09JL1991 TENNECO Pakistan 132008 21SE1995 TENNECO & DESIGN Pakistan 132009 21SE1995 TENNECO & DESIGN Pakistan 132329 21SE1995 TENNECO & DESIGN Pakistan 132331 21SE1995 TENNECO Panama 78102 02NO1995 TENNECO Paraguay 019588 22SE1995 TENNECO Paraguay 019589 22SE1995 TENNECO Paraguay 019590 02SE1995 TENNECO Paraguay 019591 02SE1995 TENNECO Paraguay 019593 02SE1995 TENNECO Paraguay 019594 02SE1995 TENNECO Paraguay 019595 02SE1995 TENNECO & DESIGN Paraguay 019578 22SE1995 TENNECO & DESIGN Paraguay 019579 22SE1995 TENNECO & DESIGN Paraguay 019580 22SE1995 TENNECO & DESIGN Paraguay 019582 22SE1995 TENNECO & DESIGN Paraguay 019583 22SE1995 TENNECO & DESIGN Paraguay 019585 22SE1995 TENNECO & DESIGN Paraguay 019586 22SE1995 TENNECO & DESIGN Paraguay 019587 22SE1995 TENNECO Philippines 102915 22SE1995 TENNECO Philippines 102916 22SE1995 TENNECO Philippines 102918 22SE1995 TENNECO Philippines 106614 12MR1996 TENNECO Philippines 106615 12MR1996 TENNECO Philippines 106616 12MR1996 TENNECO Philippines 106617 12MR1996 TENNECO & DESIGN Philippines 105059 04JA1996 TENNECO & DESIGN Philippines 105060 04JA1996 TENNECO & DESIGN Philippines 105062 04JA1996 TENNECO & DESIGN Philippines 105063 04JA1996 TENNECO & DESIGN Philippines 105064 04JA1996 TENNECO & DESIGN Philippines 105065 04JA1996 TENNECO & DESIGN Philippines 105066 04JA1996 TENNECO & DESIGN Philippines 105067 04JA1996 TENNECO & DESIGN Philippines 105068 04JA1996 TENNECO Poland Z-151610 22SE1995
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TRADEMARK COUNTRY APPLICATION No. APPLICATION Date TENNECO & DESIGN Poland Z-151609 22SE1995 TENNECO Qatar 13915 20SE1995 TENNECO Qatar 13916 20SE1995 TENNECO Qatar 13917 20SE1995 TENNECO Qatar 13918 20SE1995 TENNECO Qatar 13919 20SE1995 TENNECO Qatar 13920 20SE1995 TENNECO Qatar 13921 20SE1995 TENNECO Qatar 13922 20SE1995 TENNECO Qatar 13923 20SE1995 TENNECO Qatar 7862 15FE1990 TENNECO & DESIGN Qatar 13924 20SE1995 TENNECO & DESIGN Qatar 13925 20SE1995 TENNECO & DESIGN Qatar 13927 20SE1995 TENNECO & DESIGN Qatar 13928 20SE1995 TENNECO & DESIGN Qatar 13929 20SE1995 TENNECO & DESIGN Qatar 13930 20SE1995 TENNECO & DESIGN Qatar 13931 20SE1995 TENNECO & DESIGN Qatar 13932 20SE1995 TENNECO & DESIGN Qatar 13933 20SE1995 TENNECO Sabah UNKNOWN 28FE1983 TENNECO & DESIGN Sabah S/031594 28FE1983 TENNECO & DESIGN Saudi Arabia 30990 20SE1995 TENNECO & DESIGN Saudi Arabia 30991 20SE1995 TENNECO & DESIGN Saudi Arabia 30992 20SE1995 TENNECO & DESIGN Saudi Arabia 30993 20SE1995 TENNECO & DESIGN Saudi Arabia 30994 20SE1995 TENNECO & DESIGN Saudi Arabia 30996 20SE1995 TENNECO & DESIGN Saudi Arabia 30997 20SE1995 TENNECO & DESIGN Saudi Arabia 30998 20SE1995 TENNECO & DESIGN Saudi Arabia 30999 20SE1995 TENNECO & DESIGN Saudi Arabia 99133414 22SE1995 TENNECO Singapore 9064/95 22SE1995 TENNECO Singapore 9066/95 22SE1995 TENNECO & DESIGN Singapore 9059/95 22SE1995 TENNECO & DESIGN Singapore 9063/95 22SE1995 TENNECO & DESIGN Singapore 9065/95 22SE1995 TENNECO Sri Lanka 75822 22SE1995 TENNECO Sri Lanka 75823 22SE1995 TENNECO Sri Lanka 75824 22SE1995 TENNECO Sri Lanka 75825 22SE1995 TENNECO Sri Lanka 75826 22SE1995 TENNECO Sri Lanka 75828 22SE1995 TENNECO Sri Lanka 75829 22SE1995 TENNECO Sri Lanka 75830 22SE1995 TENNECO & DESIGN Sri Lanka 75815 22SE1995 TENNECO & DESIGN Sri Lanka 75819 22SE1995 TENNECO & DESIGN Sri Lanka 75820 22SE1995 TENNECO Surinam 14.568 22SE1995 TENNECO Surinam 14.569 22SE1995 TENNECO Surinam 14.570 22SE1995 TENNECO Surinam 14.571 22SE1995 TENNECO Surinam 14.572 22SE1995 TENNECO Surinam 14.573 22SE1995 TENNECO Surinam 14.574 22SE1995 TENNECO Surinam 14.575 22SE1995
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TRADEMARK COUNTRY APPLICATION No. APPLICATION Date TENNECO Surinam 14.576 22SE1995 TENNECO Surinam 14.577 22SE1995 TENNECO & DESIGN Surinam 14.578 22SE1995 TENNECO & DESIGN Surinam 14.579 22SE1995 TENNECO & DESIGN Surinam 14.580 22SE1995 TENNECO & DESIGN Surinam 14.581 22SE1995 TENNECO & DESIGN Surinam 14.582 22SE1995 TENNECO & DESIGN Surinam 14.583 22SE1995 TENNECO & DESIGN Surinam 14.584 22SE1995 TENNECO & DESIGN Surinam 14.585 22SE1995 TENNECO & DESIGN Surinam 14.586 22SE1995 TENNECO & DESIGN Surinam 14.587 22SE1995 TENNECO Taiwan 84-047850 21SE1995 TENNECO Taiwan 84-052191 19OC1995 TENNECO Taiwan 84-052193 19OC1995 TENNECO & DESIGN Taiwan (84) 19033 24AP1995 TENNECO & DESIGN Taiwan 84-047861 21SE1995 TENNECO & DESIGN Taiwan 84-053227 24OC1995 (IN CHINESE) TENNECO (IN CHINESE) Taiwan 84-047855 21SE1995 TENNECO & DESIGN Transkei 1077 14MR1991 TENNECO & DESIGN Transkei 91/1076 14MR1991 TENNECO Turkey 10401/95 21SE1995 TENNECO Turkey 10402/95 21SE1995 TENNECO & DESIGN Turkey 10404/95 21SE1995 TENNECO & DESIGN Turkey 95/010403 21SE1995 TENNECO Turkmenistan 3(880) 22SE1995 TENNECO & DESIGN Turkmenistan 3(879) 22SE1995 TENNECO Ukraine 95092786/T 22SE1995 TENNECO Ukraine 95113204/T 16NO1995 TENNECO United Arab Emirates 12796 20SE1995 TENNECO United Arab Emirates 12797 20SE1995 TENNECO United Arab Emirates 12799 20SE1995 TENNECO United Arab Emirates 12800 20SE1995 TENNECO United Arab Emirates 12801 20SE1995 TENNECO United Arab Emirates 12802 20SE1995 TENNECO United Arab Emirates 12803 20SE1995 TENNECO United Arab Emirates 12804 20SE1995 TENNECO United Arab Emirates 12805 20SE1995 TENNECO & DESIGN United Arab Emirates 12806 20SE1995 TENNECO & DESIGN United Arab Emirates 12807 20SE1995 TENNECO & DESIGN United Arab Emirates 12809 20SE1995 TENNECO & DESIGN United Arab Emirates 12810 20SE1995 TENNECO & DESIGN United Arab Emirates 12811 20SE1995 TENNECO & DESIGN United Arab Emirates 12812 20SE1995 TENNECO & DESIGN United Arab Emirates 12813 20SE1995 TENNECO & DESIGN United Arab Emirates 12814 20SE1995 TENNECO & DESIGN United Arab Emirates 12815 20SE1995 TENNECO Uruguay 281249 22SE1995 TENNECO & DESIGN Uruguay 281341 22SE1995 TENNECO & DESIGN Venda 91/0160 11MR1991 TENNECO & DESIGN Venda 91/0161 11MR1991 TENNECO Venezuela 14.792-95 22SE1995
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TRADEMARK COUNTRY APPLICATION No. APPLICATION Date TENNECO Venezuela 14.793-95 22SE1995 TENNECO Venezuela 14.794-95 22SE1995 TENNECO Venezuela 14.795-95 22SE1995 TENNECO Venezuela 14.796-95 22SE1995 TENNECO Venezuela 14.797-95 22SE1995 TENNECO Venezuela 14.798-95 22SE1995 TENNECO Venezuela 17.309-95 01NO1995 TENNECO Venezuela 17.310-95 01NO1995 TENNECO & DESIGN Venezuela 14.799-95 22SE1995 TENNECO & DESIGN Venezuela 14.800-95 22SE1995 TENNECO & DESIGN Venezuela 14.802-95 22SE1995 TENNECO & DESIGN Venezuela 14.803-95 22SE1995 TENNECO & DESIGN Venezuela 14.804-95 22SE1995 TENNECO & DESIGN Venezuela 14.805-95 22SE1995 TENNECO & DESIGN Venezuela 14.806-95 22SE1995 TENNECO & DESIGN Venezuela 14.807-95 22SE1995 TENNECO & DESIGN Venezuela 14.808-95 22SE1995
EX-10.5 15 PACTIV CORPORATION EXEC. INCENTIVE COMP. PLAN 1 EXHIBIT 10.5 PACTIV CORPORATION EXECUTIVE INCENTIVE COMPENSATION PLAN (THE "Plan") Section 1. Establishment and Purpose 1.1 Establishment of the Plan. Pactiv Corporation (the "Company") hereby establishes the Plan effective upon the distribution of the Company's stock to the shareholders of Tenneco Inc. 1.2 Purpose. The objectives of the Plan are to: (a) Reinforce a results-oriented management culture with executive pay that varies according to overall Corporate and individual performance against aggressive business goals and core behavioral standards. (b) Provide incentives, in the form of substantial reward potential, for Executives to remain employees of the Company. (c) Focus on business results that include financial measures such as return on capital employed, net income, cash flow, working capital, and earnings per share, with improvement in customer satisfaction, quality, safety, environmental, effective leadership and workforce diversity. (d) Place greater emphasis on variable performance-based (versus fixed) compensation. (e) Provide key Executives with competitive levels of total current compensation and incentive earning opportunities commensurate with the business results achieved and individual performance. (f) Provide a plan that is easy to describe and understand. Section 2. Plan Definitions (a) "Company" includes any successor employer which adopts the Plan and any subsidiary corporation designated by the Compensation / Nominating / Governance Committee of the Board of Directors of the Company (the "Committee") as eligible to participate in the Plan; except that when used with reference to authority under the Plan, Company shall mean Company as defined in Section 1.1 hereof. (b) "Corporate" means the entity which is responsible for the overall management and staff support functions of the Company. (c) "Division" means each operating organizational entity which, through the conduct of its business, produces revenues for the Company. (d) "Executive" means a regular, full-time salaried employee of the Company who is in a position meeting the defined eligibility criteria for participation in the Plan. 2 (e) "Participant" means an Executive who has been approved for participation in the Plan. (f) "Plan Year" means the calendar year. (g) "Salary Grade" means the position classification assigned to the Participant in accordance with the position evaluation system adopted by Company Management for Plan purposes. (h) "EICP Objectives" means the "Target" (Budget) level of financial objectives (e.g., net income, cash flow, and earnings per share) or other operating measurements for the Plan Year, assigned annually by the Company to each Division. This represents the expected level of achievement for the Plan Year. The target goal (budget) for Corporate will be the Company's consolidated operating measurements. (i) "Individual Incentive Target Award" means the anticipated individual incentive award to be allocated to a Participant in the event EICP Objectives are met and his/her individual performance is fully satisfactory. The schedule of individual incentive target awards applicable to the various Salary Grades shall be determined by the Company. Section 3. Eligibility and participation 3.1 Eligibility and Participation. Eligibility for participation in the Plan will be limited to those key Executives who, by the nature and scope of their positions, regularly and directly make or influence policy decisions which significantly impact the overall results and success of the Company. The Company will receive recommendations for participation from Division Heads and appropriate Corporate Staff Officers. Each such nominated Executive shall become a Participant upon being approved by the Company. All such Executives approved for participation shall be notified of their selection as soon as practical following approval. 3.2 Cessation of Participation. The Company may withdraw its approval of an existing position at any time during the Plan Year. Participants whose employment is terminated during the Plan Year for reasons other than disability, death, or normal retirement under a Company retirement plan shall forfeit participation in the Plan unless otherwise authorized by the Company. At the sole discretion of the Company, participation may be prorated for Participants who become disabled, die, normal retire or are assigned to non-eligible position during the Plan Year. Section 4. Fund Generation 4.1 Incentive Amounts. Annually, the Company shall establish EICP Objectives (Target/Budget). In addition, the Company shall determine for a target incentive amount equal to the sum of individual incentive targets. The Company may adjust the target incentive amount during the Plan Year to accommodate the admission or elimination of Participants to the Plan and to incorporate adjustments to individual incentive targets of Participants whose Salary Grade changes -2- 3 during the Plan Year. Incentive funds will be determined based on the budgeted financial objectives (e.g., net income, cash flow, and earnings per share) with each weighted to reflect appropriate emphasis. The size of the incentive fund will be determined as follows: FINANCIAL OBJECTIVES A preliminary fund will be established based on performance against financial objectives from the Annual Operating Plan ("AOP") which will be approved annually by the Company's Board of Directors. The preliminary fund can range from 0% to 200% of the sum of the individual target awards based on the Company's performance against its AOP. - - Performance on AOP will generate a fund equal to the sum of individual target awards. - - Performance below AOP will result in a lower incentive fund as recommended by Company Management and approved by the Board of Directors taking into consideration the reasons that AOP was not attained. - - Performance above AOP may result in a higher than target level fund as recommended by Company Management and approved by the Board of Directors taking into consideration the reasons that AOP was exceeded. The preliminary fund can be adjusted, upward or downward, based on the recommendation of Company Management and approved by the Board of Directors taking into account unusual events. NON-FINANCIAL OBJECTIVES Quantitative Adjustments Once the preliminary fund is established, the following quantitative adjustment factors will be applied to determine a final incentive fund:
Factor Maximum ------ ------- - Return on Capital Employed 10% - Working Capital Measures 5% - Environmental Measures 5% - Safety & Health Measures 5%
Each of these quantitative adjustment factors will be applied for a total increase (decrease) to the fund of as much as 25%. Qualitative Adjustments -3- 4 The following qualitative adjustment factors for overall leadership will also be applied. - Innovation - Customer Satisfaction / Quality - Leadership of Change - Workforce Diversity - Operational Considerations (Quality of Earnings) These qualitative factors will be applied to a maximum of 2%, for a total increase/decrease to the fund as much as 10%. 4.2 Committee Authority. The Committee shall have the right at any time in its sole discretion to modify, eliminate or withdraw for such period or periods as it may determine, the incentive amounts, in part or in whole, to be made available under this Section 4 for payment of awards to any or all participating Corporate or Division entities or any Participant or Participants hereunder. Section 5. Determination of Individual Awards 5.1 Determination of Individual Incentive Target Awards. Annually, the Committee shall determine the Salary Grade applicable to the Chief Executive Officer of the Company, and the Company shall determine the Salary Grade applicable to all other Participants. Each Participant's Individual Incentive Target Award will be determined by the Company. 5.2 Determination of Individual Incentive Awards. Actual individual awards to be paid to Participants will vary above or below the assigned Individual Incentive Target Awards dependent upon each individual's performance in accordance with guidelines prescribed by the Company. The actual award to a Participant must be approved by both the Company and the Committee (or only the Committee for awards applicable to the Chief Executive Officer of the Company) and shall not exceed 100% of the Participant's annual base salary without approval of the Committee. Section 6. Form of Timing of Awards Payment of Individual Awards. The actual awards to be paid to Participants in accordance with Section 5.2 shall be paid in cash as soon as practical once final operating performance is available. Section 7. Administration This Plan shall be administered by the Company in accordance with rules that may be established from time to time by the Committee. The determination of the Company as to any disputed question arising under this Plan, including any question of construction or interpretation, shall be final, binding, and conclusive upon all persons. -4- 5 Section 8. Amendment and Termination The Committee, in its absolute discretion and without notice, may at any time and from time to time modify or amend, in whole or in part, any or all of the provisions of this Plan, or suspend or terminate it entirely. Section 9. Applicable Laws This Plan shall be construed, administered and governed in all respects under the laws of the State of Illinois. IN WITNESS WHEREOF, the Company has caused the Plan to be executed on its behalf by its respective officers thereunder duly authorized, on the day and year set forth below. PACTIV CORPORATION Date: November 1, 1999 By: /S/ John Potempa ---------------- ----------------------------- Its: Vice President Employee ----------------------------- Relations and Administration ----------------------------- EX-10.6 16 PACTIV CORP. SUPPLEMENTAL RETIREMENT PLAN 1 EXHIBIT 10.6 PACTIV CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (THE "PLAN") PURPOSE The Plan is maintained by Pactiv Corporation (the "Company") as an unfunded plan for the purpose of providing retirement benefits with respect to certain employees that are equal to retirement benefits lost under its qualified defined benefit pension plan for salaried employees (the "Retirement Plan") as a result of the imposition of the limitations contained in the Internal Revenue Code of 1986, as amended (the "Code"). The portion of the Plan that provides for benefits limited by Code Section 415 is maintained as an "excess benefit plan" as described in Section 3(36) of the Employee Retirement Income Security Act of 1974 as amended ("ERISA"). The other benefits provided for under the Plan are only available to a "select group of management or highly compensated employees" as determined by the Compensation / Nominating / Governance Committee of the Board of Directors of the Company (the "Committee"), and the portion of the Plan providing such benefits is intended to satisfy the ERISA exemption requirements for a plan limited to such a group. Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Retirement Plan. THE PLAN 1. Effective Date The Plan as set forth herein is an amendment and restatement of the Tenneco Inc. Supplemental Executive Retirement Plan (the "Former Plan") as provided in the Human Resources Agreement (the "HR Agreement") between the Company and Tenneco Inc. and is effective on the date on which the Company's stock is distributed to the shareholders of Tenneco Inc. (the "Distribution Date"). The benefit entitlement, if any, under the Former Plan of any person who separated from service prior to that date shall be governed by the provisions of the Former Plan as it was in effect from time to time prior to that date, and liability for such benefit has been allocated under the HR Agreement. 2. Eligibility An employee shall be a "Participant" in this Plan if the employee is a participant in the Retirement Plan or is provided a benefit under Section 11 hereof. Participation by active and former employees of the Automotive Group (as that term is defined in the Distribution Agreement between and among Tenneco Inc. and the Company) shall cease as of the close of business on the Distribution Date and all liability for benefits accrued under the Plan by such employees shall be retained and assumed by Tenneco Inc. 3. Amount of Benefit 2 The benefit payable under this Plan to a Participant, or to the Participant's Eligible Spouse, Eligible Child(ren), joint annuitant or other beneficiary(ies), all as determined under the provisions of the Retirement Plan, shall equal the excess, if any, of (a) over (b) where: (a) is the benefit that would be paid under the Retirement Plan if the provisions of the Retirement Plan were administered without regard to the limitations imposed by the Code and, only with respect to Participants who, at any time, were participants in the Company's Executive Incentive Compensation Plan or the Tenneco Inc. Executive Incentive Compensation Plan (collectively, the "EICP"), if Final Average Compensation, as computed under the Retirement Plan, were determined on the basis of compensation paid during the three calendar years (of the five calendar year period ending no later than the calendar year immediately preceding his or her termination or retirement) for which such compensation is the highest, and increased by the quotient of (i) the total of the cash bonuses, as defined below, paid to the Participant in the three calendar years (during the same five calendar year period ending no later than the calendar year immediately preceding his or her termination or retirement) for which such total is the highest, divided by (ii) three or such lesser number of calendar years (included in such period) in which such bonuses were paid to the Participant; provided, that the calendar year including his or her termination or retirement shall be included if such event follows the payment of regular bonuses for that year; and provided, that bonuses and salary, respectively, deferred at the election of the Participant shall be counted only in the year that they would have been paid absent such election, and provided further, that the foregoing language shall be applied to count bonuses which relate to a calendar year as paid in that year, for example, 2000 bonuses will be counted in 2000 notwithstanding the fact that they are actually paid in 2001; and (b) is the benefit that is payable under the Retirement Plan. Notwithstanding the foregoing, if, except as otherwise provided in writing, an employee is granted credit for purposes of benefit accrual under the Retirement Plan for service rendered prior to the time that the employee became a participant in the Retirement Plan, such employee shall be credited with such service under this Plan only if and to the extent determined by the Committee. Unless otherwise provided in writing, no benefit shall be payable under the Plan unless a benefit also is payable under the Retirement Plan, except that benefits accrued hereunder as of the effective date are treated as fully vested and nonforfeitable to the extent provided in the HR Agreement. Cash bonus means only cash bonuses paid under the EICP and other cash bonuses as the Committee determines. -2- 3 4. Form of Benefit Any benefit under this Plan shall be paid in the same form and manner as the benefit payments made to, or with respect to, the Participant under the Retirement Plan. Notwithstanding the preceding sentence, no benefit is payable hereunder prior to 60 days after the Participant has separated from service, unless the Committee so determines. Prior to the commencement of benefits but, in no event later than 24 months after the Participant has separated from service, and only with respect to a Participant who at any time was a participant in the EICP (or a beneficiary of such a Participant), such Participant or beneficiary may elect, but only with the approval of the Committee, to receive payment of such benefit in the form of a lump sum or annuity, provided that in cases where a Participant has chosen a lump sum and the exact amount of a Participant's benefit cannot be determined by the date elected for payment, a preliminary lump sum shall be paid with respect to amounts that can be clearly ascertained then, with the remainder to be issued in a subsequent lump sum when that amount is exactly determined by the Committee or its delegee. In addition, with respect to all Plan Participants, if the benefit payable from this Plan (expressed as an age 65 life annuity) would be less than $50 per month, the benefit payable from this Plan automatically shall be paid as a lump sum. The actuarial factors set forth in the Retirement Plan shall be used to compute benefits hereunder, provided that, for purposes of any lump sum payment that may be payable under the Plan, the interest rate used shall be the annual rate of interest on 30-year Treasury securities as specified by the IRS for the second calendar month preceding the first day of the Plan Year during which the annuity starting date occurs, and the applicable mortality table described in Rev. Rul. 95-6, 1995-1 C.B. (page 80), or in such other formal guidance as may be issued from time to time by the IRS. 5. Unfunded Plan This Plan shall be maintained as an unfunded non-qualified deferred compensation plan. All benefits under this Plan shall be payable from the general assets of the Company. No person shall be entitled to receive any benefits under this Plan from the funds of the Retirement Plan. 6. No Assignment No benefit under this Plan shall be assignable or alienable or subjected, by attachment or otherwise, to the claims of creditors of any person. 7. No Guarantee of Employment This Plan shall not be construed to give any Participant the right to be retained in the employment of the Company or any of its affiliates. -3- 4 8. Operation and Administration This Plan shall be operated under the direction of and administered by the Committee and in accordance with its administrative rules. The Committee's decision in all matters involving the interpretation and application of this Plan shall be final and binding. The Committee shall establish a claims procedure which is consistent with the claims procedure employed under the Retirement Plan. 9. Governing Law To the extent not preempted by federal law, this Plan shall be construed, administered and enforced in accordance with the laws of the State of Illinois. 10. Amendment and Discontinuance The Company reserves the right, by action of the Committee, to amend or discontinue the Plan. However, no such amendment or discontinuance shall impair or adversely affect any benefits accrued under this Plan as of the date of such action. 11. Special Appendix The Company may from time to time determine to provide certain persons additional supplemental pension benefits, which may be reflected in a Special Appendix hereto or in such other document as the Company shall determine. References in a Special Appendix or such other document to the "Plan" are to this Plan. 12. Employees Transferred to Newco This Section effects the terms of the Human Resources Agreement between and among Tenneco Inc., Tenneco Packaging Inc. ("TPI") and Packaging Corporation of America ("Newco"). Active employees of Tenneco Packaging Inc. ("TPI") who become employees of Newco or one of its subsidiaries and other persons who have vested benefits in the Retirement Plan and become employees of Newco or one of its subsidiaries ("Newco Employees") prior to the earliest of: (i) five years from April 12, 1999; or (ii) the date specified in the notice provided to Tenneco by Newco that such arrangement will terminate (the "Salaried Plan Transition Date") will continue to be covered under the Plan until the earliest of: (i) the Salaried Plan Transition Date; (ii) his or her separation from service with Newco; or (iii) payment of his or her benefits under the Plan pursuant to mutual agreement. Newco Employees will cease participation in future benefit accruals under the Plan as of the date specified in the preceding sentence. Until that date, any service or compensation, if applicable, will be used to determine whether Newco Employees attain eligibility for benefits under the Plan, including eligibility for subsidized early retirement benefits. All benefits accrued by Newco Employees will be fully vested and nonforfeitable on April 12, 1999, and all subsequent benefits accrued until the Salaried Plan Transition Date will be fully vested and nonforfeitable upon accrual. In addition, service with Newco after the Salaried Plan Transition Date will be recognized -4- 5 as service under the Plan for purposes of determining additional retirement benefit accruals beyond those accrued as of the Salaried Plan Transition Date. Subject to (iii) above, Newco Employees will not be treated as persons who separated from service, unless they actually do separate from service with Newco or an affiliate of Newco, for purposes of entitling them to commence receiving benefits under the Plan. Any and all enhancements to which a Newco Employee is entitled under Section 11 hereof shall be preserved through the Salaried Plan Transition Date. 13. Special Rules Applicable to TMC Personnel Notwithstanding any other provision hereof, the following rules shall apply to the benefits hereunder of the personnel (active employees and persons treated as active employees) of Tenneco Management Company who are covered by the Tenneco Rabbi Trust: (i) the lump sum benefit of any such person shall in no event be less than his/her lump sum computed using an interest rate no greater than the interest rate in effect for benefits paid in 1999; (ii) any such person shall be permitted to elect prior to his or her separation from service, a lump sum distribution; and (iii) such a person who separates from service in 1999, shall be eligible to receive benefits in 1999 regardless of the fact that 60 days have not elapsed. The provisions of this Section and the provisions of any document described in Section 11 of the Former Plan are not subject to amendment except with the written consent of the person affected. IN WITNESS WHEREOF, the Company has caused the Plan to be executed on its behalf by its respective officers thereunder duly authorized, on the day and year set forth below. PACTIV CORPORATION Date: November 1, 1999 By: /S/ John Potempa --------------------- ------------------------------- Its: Vice President Employee ----------------------------- Relations and Administration ----------------------------- -5- 6 R. WAMBOLD BENEFITS UNDER THE COMPANY'S SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN") The benefits of Richard L. Wambold ("Wambold") under the Plan will be adjusted as follows: The annual pension benefits to which Wambold shall be entitled under all the Company's defined benefit plans (qualified and non-qualified) commencing at age 55 or his separation from service, if later, will, at a minimum, be equal to the product of (x) and (y), where (x) is the average of his total base compensation plus bonus for the three calendar years immediately preceding his separation from service and (y) is the total of 25% plus 2.5% for each full year of service with Tenneco Inc. and the Company earned in the period commencing January 1, 1997, for a maximum total of 50%. Notwithstanding the foregoing, the provisions set forth herein shall be applicable only if Wambold completes five years of service with Tenneco Inc. and the Company during the period commencing January 1, 1997. -6- 7 J. FAULKNER BENEFITS UNDER THE COMPANY'S SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN") The benefits of James V. Faulkner, Jr. ("Faulkner") under the Plan will be adjusted as follows: The monthly pension benefits to which Faulkner shall be entitled under the Plan and herein shall be equal to the normal retirement pension benefits to which Faulkner would be entitled under the Plan if Faulkner had commenced participation in the Tenneco Inc. Retirement Plan ("TRP") on his employment commencement date. If Faulkner reaches age 55 while performing services for Tenneco Inc. or the Company as an officer, he will be eligible for an early retirement benefit under the Plan as though he then met the participation and service requirements of the TRP, with subsidized reduction factors no less favorable than those in effect under the TRP on January 1, 1997. If Faulkner dies before commencing to receive the benefits described hereunder, his beneficiary will receive a death benefit which is the present value of the benefits he has accrued hereunder as of the date of his death. If Faulkner remains employed by the Company through December 31, 2002 his benefit hereunder will be determined by counting an additional three years of service and participation and an additional three years of age beyond actual service, participation and age at the time of separation from service. If he resigns or is discharged for cause prior to December 31, 2002, he will be ineligible for the supplemental pension plan enhancement described in this paragraph. In all other circumstances, including without limitation his death, disability or discharge without cause, Faulkner or his beneficiary in the case of death will be eligible for this supplemental pension plan enhancement. -7- 8 MEAD SPECIAL APPENDIX TO THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN") This Special Appendix sets forth certain special provisions of the Plan with respect to the benefits of Dana G. Mead ("Mead"). 1. Mead shall be entitled to monthly pension benefits in the amount determined under Section 2 hereof commencing on the first day of the calendar month immediately following the termination of his employment with the Tenneco Management Company (the "Company"). 2. The monthly pension benefits to which Mead shall be entitled shall be equal to the greater of (a) or (b) where (a) equals the benefits to which Mead would be entitled under the Tenneco Inc. Retirement Plan (the "TRP") and this Plan, computed using the Final Average Earnings, as defined in Section 3 hereof, and Years of Credited Service, as defined in Section 4 hereof, and substituting the rules of Sections 1, 5 and 6 hereof for the generally applicable rules of such plans; and (b) equals 2.48% of Mead's Final Average Earnings, as defined in Section 3 hereof, times his Years of Credited Service, as defined in Section 4 hereof, and substituting the rules of Sections 1, 5 and 6 hereof for the generally applicable rules of such plans. 3. "Final Average Earnings" means the quotient of (i) Mead's Earnings, as defined below, divided by (ii) 36. "Earnings" means the greater of (a) Mead's regular base salary for the 3 calendar years in which such regular base salary was the highest in the 5 consecutive calendar year period ending prior to his termination of employment plus the total cash bonus earned by Mead for the 3 calendar years in which such total was the highest in the 5 consecutive calendar year period ending prior to his termination of employment; or (b) Mead's regular base salary (annualized for the year of termination of employment) for the 3 calendar years in which such regular base salary was highest in the 5 consecutive calendar year period ending in the year of his termination of employment plus the total cash bonus earned by Mead for the 3 calendar years in which such total was the highest in the 5 consecutive calendar year period ending in the year of his termination of employment. 4. "Years of Credited Service" means the total of (i) 14 2/3 plus (ii) Mead's Actual Tenneco Service, as defined below. "Actual Tenneco Service" means the period, in whole years and fractions thereof with each month or portion thereof -8- 9 counting as one-twelfth of one year, from March 16, 1992 through the date that Mead attains age 65. 5. The benefits provided hereunder shall be paid in the joint and 50% survivor form of annuity if Mead is married at the time benefits are to commence -- i.e., to Mead for life and, after his death, 50% of the monthly amount payable during Mead's life continuing to the spouse, if any, to whom he was legally married at the date of the commencement of payment of benefits hereunder and to whom he was so married on the date of his death. There shall be no reduction in the amount of the benefits payable during Mead's life on account of payment in the joint and 50% survivor form. The benefits provided hereunder shall be paid in the life only form of annuity if Mead is not married at the time that benefit payments are to commence. Subject to the rules stated in the immediately following paragraph, Mead may elect to receive such benefits in another form which is the actuarial equivalent of the normal form of benefit specified above for his marital status at the time in question. At Mead's election, the Company will purchase and distribute to him an annuity contract issued by an insurance company acceptable to Mead to provide such benefits. If his termination of employment is effective after he attains age 62 or earlier with the consent of the Company, Mead may elect to receive such benefits in the form of a lump sum distribution. If a lump sum distribution is elected, it shall be computed under the assumptions then in use with respect to the TRP, or its successor; provided, that in no event shall the interest assumption be greater than the Pension Benefit Guaranty Corporation immediate annuity interest rate in effect as of January 1 of the year in which the payment is to be made, and provided further that the mortality table shall be no less favorable to Mead or his Beneficiary than the 1983 group annuity table, 50% male, 50% female mix. Mead may elect that the lump sum benefit be paid at some date certain which is later than the date specified for benefit commencement in Section 1 hereof. Any such election shall be irrevocable and must be filed prior to the date benefits would otherwise commence hereunder. If he makes such an election, the lump sum amount computed above shall be credited with interest at the prime rate prevailing from time to time from the date specified in Section 1 above until the date of actual payment. 6. If Mead dies before commencing to receive the benefits described hereunder, his Beneficiary will receive a death benefit in a lump sum distribution which is the present value of the benefits which he has accrued hereunder as of the date of his death computed in accordance with the rules set forth herein, including the interest assumption specified in Section 5 hereof. Without limiting the generality of the foregoing, it is specifically provided that the special alternative death benefit called for by the TRP as in effect on December 31, 1994, shall apply if that produces a higher benefit. -9- 10 7. The benefits provided hereunder are in lieu of any benefits to which Mead might otherwise be entitled under the TRP, Tenneco Inc. Benefit Equalization Plan or this Plan, but shall not adversely affect his entitlement to benefits under any other plan, fund or program maintained by the Company, nor shall benefits provided under any other such plan fund or program be offset against or otherwise reduce the benefits provided for hereunder. 8. For the purpose of calculating Mead's Earnings, the Company shall determine an amount that shall be used as a cash bonus number (the "Hypothetical Bonus") for any year in which Mead has received something in lieu of a cash bonus. Notwithstanding the foregoing, a Hypothetical Bonus shall be counted only in circumstances in which it would yield larger monthly pension benefits. -10- EX-10.7 17 PACTIV CORP. CHANGE IN CTRL SERVERANCE PLAN 1 EXHIBIT 10.7 PACTIV CORPORATION CHANGE IN CONTROL SEVERANCE BENEFIT PLAN FOR KEY EXECUTIVES (THE "PLAN") This Plan is established by Pactiv Corporation (the "Company") effective on the date on which the stock of the Company is distributed to the shareholders of Tenneco Inc. (the "Effective Date"). The purpose of the Plan is to induce key employees to enter into, or continue their services or employment with, and to steadfastly serve the Company if and when a Change in Control (as defined below) is threatened, despite attendant career uncertainties, by committing the Company to provide severance benefits in the event their employment terminates as a result of a Change in Control. 1. Definitions A. "Change in Control" shall mean the first to occur of the following events (but no event other than the following events), except as otherwise provided below: (1) any person and any of their affiliates or associates becomes the beneficial owner, directly or indirectly, of securities of the Company representing (a) fifteen percent (15%) or more of either the Company's then outstanding shares of common stock or the combined voting power of the Company's then outstanding securities having general voting rights, and a majority of the Incumbent Board does not approve the acquisition before the acquisition occurs, or (b) forty percent (40%) or more of the Company's then outstanding shares of common stock or the combined voting power of the Company's then outstanding securities having general voting rights. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur pursuant to this paragraph (1) solely because the requisite percentage of the Company's then outstanding shares of common stock or the combined voting power of the Company's then outstanding securities having general voting rights is acquired by one or more employee benefit plans maintained by one or more Pactiv Companies; or (2) members of the Incumbent Board cease to constitute a majority of the Company Board; or (3) the consummation of any plan of merger, consolidation, share exchange or combination between the Company and any person including without limitation becoming a subsidiary of any other person without members of the Incumbent Board, as constituted immediately prior to the merger, consolidation, share exchange or combination constituting a majority of the board of directors of (a) the surviving or successor corporation, or, (b) if the surviving or successor corporation is a majority-owned subsidiary of another corporation or corporations, the ultimate parent company of the surviving or successor corporation; or (4) the consummation of any sale, exchange or other disposition of all or substantially all of the Company's assets without members of the Incumbent 2 Board immediately prior to any sale, exchange or disposition of all or substantially all of the Company's assets constituting a majority of the board of directors of (a) the corporation which holds such assets after such disposition, or, (b) if such corporation is a majority-owned subsidiary of another corporation or corporations, the ultimate parent company of the successor corporation provided, that the Company Board may determine conclusively that any transaction does not constitute a sale, exchange or other disposition of substantially all of the Company's assets; (5) if any person and any of their affiliates and associates, shall elect or have elected, during any period not exceeding 24 months, at least 25% of the members of the Company Board, without the approval of the Incumbent Board and such members are comprised of persons not serving as members of the Company Board immediately prior to the formation of such group or the first solicitation of proxies by such person; or (6) the Company's stockholders approve a plan of complete liquidation or dissolution of the Company. B. "Company Board" means the Board of Directors of the Company. C. "Constructive Termination" will be deemed to have occurred if, upon or following the Change in Control, a Key Executive separates from service with all Pactiv Companies after the Pactiv Companies, by action or inaction, and without the Key Executive's express prior written consent: (1) diminish in any manner the Key Executive's status, position, duties or responsibilities with Pactiv Companies from those in effect immediately prior to the Change in Control; without limiting the foregoing, for purposes of this clause (1) a diminution will be deemed to have occurred if the Key Executive does not maintain the same or greater status, position, duties and responsibilities with the ultimate parent corporation of a controlled group of corporations of which the Company is a member upon consummation of the transaction or transactions constituting the Change in Control; (2) reduce the Key Executive's then current annual cash compensation from Pactiv Companies below the sum of (a) the Key Executive's annual base salary or annual base compensation from the Pactiv Companies in effect immediately prior to the Change in Control and (b) the Key Executive's average annual award under the Company's Executive Incentive Compensation Plan (or any successor plan) for the three calendar year periods (or for such shorter period as the Key Executive has been employed by the Company) completed immediately prior to the Change in Control; (3) cause a material reduction in (a) the level of aggregate Pactiv Companies-paid medical benefit, life insurance and disability plan coverages; or (b) the aggregate rate of Pactiv Companies-paid thrift/savings plan -2- 3 contributions and of Pactiv Companies-paid defined benefit retirement plan benefit accrual, from those coverages and rates in effect immediately prior to the Change in Control; or (4) effectively require the Key Executive to relocate because of transfer of the Key Executive's place of employment with Pactiv Companies from the place where the Key Executive was employed immediately prior to the Change in Control; for purposes of the foregoing, a transfer of place of employment shall be deemed to require a Key Executive to relocate if such transfer (i) is greater than 25 miles from the place where the Key Executive was employed immediately prior to the Change in Control and (ii) increases the normal commuting time of such Key Executive by more than 50%. A Constructive Termination will be deemed to have occurred for all Key Executives if any successor to the Company in a merger, consolidation, purchase or other combination constituting a Change in Control fails to assume, in writing, all of the Company's obligations under the Plan promptly upon consummation of such Change in Control. In addition, a determination that a Key Executive has been Constructively Terminated for purposes of eligibility for benefits under this Plan shall be based solely on the criteria set forth in this paragraph C and the Key Executive's eligibility or application for, or receipt of, any retirement benefits from any Pactiv Company following separation from service shall have no bearing on such determination. D. "Discharge for Cause" shall be deemed to have occurred only if, following the Change in Control, a Key Executive is discharged by Pactiv Companies from employment because: (1) the Key Executive has engaged in dishonesty or other serious misconduct in his or her capacity as an employee of Pactiv Companies having the effect of materially injuring the reputation or business of Pactiv Companies, monetarily or otherwise; or (2) the Key Executive has willfully and continually failed (unless due to incapacity resulting from physical or mental illness) to perform the duties of his or her employment by Pactiv Companies after written demand for substantial performance is delivered to the Key Executive by Pactiv Companies specifically identifying the manner in which the Key Executive has not substantially performed such duties. Notwithstanding the foregoing, a Key Executive who, immediately prior to the Change in Control, is a member of Executive Group I shall not be deemed to have been Discharged for Cause under paragraph l or 2 above unless a written notice has been delivered to the Key Executive stating that the Pactiv Companies have terminated the Key Executive's employment, which notice shall include a resolution, adopted by at least a three-quarter's vote of the Incumbent Board (after the Key -3- 4 Executive has been provided with reasonable notice and an opportunity, together with counsel, for a hearing before the entire Incumbent Board), finding that the Key Executive has engaged in the conduct set forth in paragraphs (1) or (2) of the preceding sentence. E. "Executive Group I" shall consist of each individual who, immediately prior to a Change in Control, (1) is an executive officer of the Company listed in the Company's proxy statement most recently filed with the Securities and Exchange Commission and any other officer of the Company of the rank of Vice President or above designated by the Chief Executive Officer of the Company; or (2) is the President (or other principal officer) of any other Pactiv Company, if designated by the Chief Executive Officer of the Company, in writing on or before the Change in Control, as a member of Executive Group I. F. "Executive Group II" shall consist of each individual (1) who is not a member of Executive Group I; and (2) (a) who, immediately prior to the Change in Control, is an active participant in the Company's Executive Incentive Compensation Plan, or (b) who, immediately prior to the Change in Control, is an employee of a Pactiv Company who has been designated by the Chief Executive Officer of the Company, in writing on or before the Change in Control, as a member of Executive Group II. G. "Incumbent Board" means (1) the members of the Company Board on the Effective Date, to the extent that they continue to serve as members of the Company Board; and (2) any individual who becomes a member of the Company Board after the Effective Date, if his or her election or nomination for election as a director is approved by a vote of at least three-quarters of then Incumbent Board. H. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended. I. "Key Executive" means an individual who, immediately prior to the Change in Control, is a member of Executive Group I or Executive Group II. J. "Pactiv Company" or "Pactiv Companies" mean the Company and any stock corporation of which a majority of the voting common or capital stock is owned directly or indirectly by the Company. -4- 5 K. "Threatened Change in Control" shall mean (i) any publicly disclosed proposal, offer, actual or proposed purchase of stock or other action which, if consummated, would, in the opinion of the Incumbent Board constitute a Change in Control, including the Company entering into an agreement, the consummation of which would result in a Change in Control or (ii) the adoption of a resolution by the Incumbent Board that a Threatened Change in Control has occurred. L. "Threatened Change in Control Period" shall mean the period beginning on the date a Threatened Change in Control occurs and ending on earlier of (1) the date the proposal, offer, actual or proposed purchase of stock or other action is formally withdrawn or the Incumbent Board has determined that the circumstances which constituted the Threatened Change in Control no longer exist; or (2) the date a Change in Control occurs. For purposes of the foregoing definitions, the terms "associate", "affiliate", "person", and "beneficial owner" shall have the respective meaning set forth in Sections 3(a) and 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the regulations promulgated thereunder, and the regulations promulgated under Section 12 of the Exchange Act. 2. Eligibility for Benefits. Any Key Executive who meets the criteria set forth in paragraphs (A) or (B) below shall be entitled to receive the benefits described therein. A. (i) If within two years after a Change in Control, a Key Executive is separated from service as an employee with Pactiv Companies because (a) the Key Executive is discharged by the Pactiv Companies, provided, such discharge is not Discharge for Cause, or (b) because of Constructive Termination, and (ii) throughout the period beginning with the Change in Control and ending with such separation from service with Pactiv Companies, the Key Executive remains an employee of Pactiv Companies, he or she shall be entitled to receive the benefits described in Sections 3 and 6 below; or B. If, during the first thirty days following the first anniversary of a Change in Control, a member of Executive Group I on the date of the Change in Control, voluntarily elects to separate from service, he or she shall be entitled to receive the benefits described in Section 3(A) below. 3. Severance Benefits. A. If the Key Executive is a member of Executive Group I immediately prior to the Change in Control -- an amount equal to three times the sum of (a) the Key Executive's annual base salary or other annual base compensation in effect immediately prior to the Change in Control, plus (b) the greater of (i) the average of the Key Executive's annual awards under the Company's Executive Incentive Compensation Plan (or any successor plan), together with any special awards from Pactiv Companies, for the last three years of the Key Executive's employment with Pactiv Companies or such shorter period as the Key Executive has been employed -5- 6 by Pactiv Companies, or (ii) the Key Executive's targeted annual award under such plans in effect immediately prior to the Change in Control. B. If the Key Executive is a member of Executive Group II immediately prior to the Change in Control -- an amount equal to two times the sum of (a) the Key Executive's annual base salary in effect immediately prior to the Change in Control, plus (b) the greater of (i) the average of the Key Executive's annual awards under the Company's Executive Incentive Compensation Plan (or any successor plan), together with any special awards from Pactiv Companies, for the last three years of the Key Executive's employment with Pactiv Companies or such shorter period as the Key Executive has been employed by Pactiv Companies, or (ii) the Key Executive's targeted annual award under such plans in effect immediately prior to the Change in Control. C. All deferred compensation (and earnings accrued thereon) credited to the account of a Key Executive under any deferred compensation plan, program or arrangement of Pactiv Companies shall be paid to such Key Executive immediately following termination of employment, notwithstanding any provisions of such plan, program or arrangement to the contrary. D. An amount, paid in a single lump sum of cash, equal to the sum of (i) any incentive compensation which has been allocated or awarded to such Key Executive for a completed calendar year or other measuring period preceding the Change in Control but has not yet been paid and (ii) a pro rata portion to the date of the Change in Control of the aggregate value of all contingent incentive compensation awards to such Key Executive for the current calendar year or other measuring period under any compensation or incentive plans of the Company, calculated as if 100% of any performance target or goal was achieved or otherwise on a basis on which such Key Executive will receive with a pro rata portion (based on elapsed time) of the amounts he or she would have been entitled to receive if he or she had continued to be employed by the Company throughout the period contemplated with respect to such award and if all other conditions for receiving the maximum amount with respect to all such awards had been met, notwithstanding any provision of any such plan to the contrary. E. The Key Executive shall be entitled to be paid in cash the total of the fair market value, determined as of the date of his or her separation from service, of any Restricted Stock, Stock Appreciation Rights, Performance Units, Stock Equivalent Units and Dividend Equivalents which he or she held immediately prior to such separation from service to the extent that he or she would not otherwise receive the value thereof. The terms "Restricted Stock", "Stock Appreciation Rights", "Performance Units", "Stock Equivalent Units" and "Dividend Equivalents" shall have the meaning ascribed to those terms in the Company's Stock Ownership Plan. -6- 7 F. The Key Executive and his or her eligible dependents, if any, shall continue to be covered by the health, life and disability plans applicable to comparably situated active employees as in effect from time to time and subject to the rules thereof for the period described below. For persons entitled to Executive Group I benefits, and their eligible dependents, the period is three (3) years from his or her separation from service. For persons entitled to Executive Group II benefits, and their eligible dependents, the period is two (2) years from his or her separation from service. This period of coverage will not count against the minimum period of health coverage required by the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), and persons covered by this provision will be afforded their applicable COBRA rights at the end of the health coverage provided herein. G. The Company shall provide each Key Executive with reasonable out placement services consistent with past practices of the Company with respect to officers at such level prior to the Change in Control. H. If a Key Executive receives other cash severance benefits from Pactiv Companies, the amount of severance benefit to which the Key Executive is entitled under Section 3(A) or (B) above shall be considered to be satisfied to the extent of such other cash severance payment. 4. Other Benefits. Upon a Change in Control, and without regard to the Key Executive's employment status following such Change in Control, all Stock Options granted under the Company's Stock Ownership Plan or any other similar plan maintained by the Company shall become immediately vested and exercisable for the lesser of 36 months or the remaining life of the option. The term "Stock Options" shall have the meaning ascribed thereto in the Company's Stock Ownership Plan. 5. Method of Payment. The Company shall pay, or cause to be paid, the cash severance benefits under the Plan to the Key Executive in a single cash sum within 30 days following the later of the Key Executive's separation from service as an employee with Pactiv Companies and submission of a claim as required by Section 12 of the Plan. Except for withholdings required by law to satisfy local, state, and federal tax withholding requirements, no offset nor any other reduction shall be taken in paying such benefit. 6. Gross-Up Payment. If any portion of the payments described herein, and/or any other payments no matter the source of such payments, shall be subject to the tax imposed by Section 4999 of the Internal Revenue Code (the portion of such payments which are subject to the Excise Tax being referred to herein as the "Payments") the Company shall pay to the affected Key Executive, not later than the 30th day following the date the Key Executive becomes subject to the Excise Tax an additional amount (the "Gross-Up Payment"), such that the net amount retained by the Key Executive after deduction of the Excise Tax on such Payments, and all federal, state and local income and employment tax (assuming the Key Executive is in the highest marginal tax bracket), interest and penalties and Excise Tax on the Gross-Up Payment, shall be equal to the amount which would have been retained by the Key Executive had the payments not been subject to the Excise Tax. -7- 8 7. Assignment. No Key Executive may assign, transfer, convey, mortgage, hypothecate, or in any way encumber any severance benefit payable under the Plan, nor shall the Key Executive have any right to receive any severance benefit under the Plan except at the time, in the amount and in the manner provided in the Plan, provided that the rights of a Key Executive under the Plan may be enforced by the Key Executive's heirs and legal representatives. This Plan may and shall be assigned or transferred to, and shall be binding upon and shall inure to the benefit of, any successor of the Company, and any such successor shall be deemed substituted for all purposes of "the Company" under the provisions of the Plan. As used in the preceding sentence, the term "successor" shall mean any person, firm, corporation, or business entity which at any time, whether by merger, purchase or otherwise, acquires all, or substantially all, of the assets or business of the Company. Notwithstanding such assignments, the Company shall remain, with such successor, jointly and severally liable for all obligations under the Plan, which, except as herein provided, may not be assigned by the Company. 8. Plan Amendment and Termination. The Plan may be terminated or amended at any time by the Board of Directors provided that during a Threatened Change in Control Period, the Plan may not be terminated or amended in any manner that reduces the benefits to a Key Executive or adversely affects the rights of a Key Executive under the Plan. In the event of a Change in Control, no amendment, or termination, made on or after the date of the Change in Control shall apply to any Key Executive until the expiration of two years and thirty-one days from the date of the Change in Control. 9. Funding. The Company shall pay, or cause to be paid, any severance benefit under the Plan out of general assets of Pactiv Companies. Nothing contained herein shall preclude the Company from establishing a grantor trust through which assets to satisfy obligations under the Plan may be set aside to provide for benefit payments to participants in the Plan. Any assets or property held by such trust shall be subject to the claims of general creditors of the Company, but only upon the insolvency or bankruptcy of the Company and only to the extent that the assets or property held by such trust are attributable to contributions made by the Company. No person other than the Company shall, by virtue of the provisions of the Plan, have any interest in such funds. 10. Controlling Law. The Plan shall be interpreted under the laws of the State of Illinois, except to the extent that federal law preempts such laws. 11. Plan Administrator. The Company is the Plan Administrator, and it shall have the authority to control and manage the operation of this Plan with the authority to interpret the Plan. 12. Making a Claim A. Submission of a Claim. In order to claim a severance benefit under this Plan, a Key Executive need only advise the Plan Administrator in writing that the Key Executive's employment with Pactiv Companies has terminated, that the Key Executive claims a severance benefit under the Plan and of the mailing address to which the severance benefit or related correspondence is to be sent. -8- 9 B. Denial of a Claim. If a Key Executive has made a claim for benefits under this Plan and any portion of the claim is denied, the Plan Administrator will furnish the Key Executive with a written notice stating the specific reasons for the denial, specific reference to pertinent Plan provisions upon which the denial was based, a description of any additional information or material necessary to perfect the claim and an explanation of why such information or material is necessary, and appropriate information concerning steps to take if the Key Executive wishes to submit the claim for review. The claim will be deemed accepted if the Plan Administrator does not approve the claim and fails to notify the Key Executive within 90 days after receipt of the claim, plus any extension of time for processing the claim, not to exceed 90 additional days, as special circumstances require. To obtain an extension, the Plan Administrator must advise the Key Executive in writing during the initial 90 days if an extension is necessary, stating the special circumstances requiring the extension and the date by which the Key Executive can expect the Plan Administrator's decision regarding the claim. C. Review Procedure. Within 60 days after the date of written notice denying any benefits, the Key Executive or the Key Executive's authorized representative may write to the Plan Administrator requesting a review of that decision by the Company Board or the Compensation / Nominating / Governance Committee thereof (the "Committee"). The request for review may contain such issues and comments as the Key Executive wishes to have considered in the review. The Key Executive may also review pertinent documents in the Plan Administrator's possession. The Company Board or the Committee will make a final determination with respect to the claim as soon as practicable. The Plan Administrator will advise the Key Executive of the determination in writing and will set forth the specific reasons for the determination and the specific references to any pertinent Plan provisions upon which the determination is based. The claim will be deemed accepted on review if the Plan Administrator fails to give the Key Executive written notice of final determination within 60 days after receipt of the request for review, plus any extension of time for completing the review, not to exceed 60 additional days, as special circumstances require. To obtain an extension, the Plan Administrator must advise the Key Executive in writing during the initial 60 days if any extension is necessary, stating the special circumstances requiring the extension and the date by which the Key Executive can expect the Company's decision, regarding the review of the claim. 13. Legal Fees and Costs. In the event a Key Executive initiates legal action to enforce his or her right to any benefit under this Plan, the Company shall pay all reasonable legal fees and -9- 10 costs incurred by the Key Executive in connection with such legal action, provided that the Key Executive prevails on any material issue that is a subject of the legal action. 14. Severability. If for any reason any provision or provisions of the Plan are determined invalid or unenforceable, the validity and effect of the other provisions of the Plan shall not be affected thereby. IN WITNESS WHEREOF, the Company has caused the Plan to be executed on its behalf by its respective officers thereunder duly authorized, on the day and year set forth below. PACTIV CORPORATION Date: November 1, 1999 By: /S/ John Potempa --------------------- -------------------------------- Its: Vice President Employee -------------------------------- Relations and Administration -------------------------------- -10- EX-10.8 18 PACTIV CORP DEFERRED COMPENSATION PLAN 1 EXHIBIT 10.8 PACTIV CORPORATION DEFERRED COMPENSATION PLAN (THE "PLAN") 1. PURPOSE The purpose of the Plan is to provide to directors and a select group of management or highly compensated employees of Pactiv Corporation and its subsidiaries and affiliates (hereinafter collectively referred to as the "Company") an opportunity to defer compensation received by them from the Company in accordance with the terms and conditions set forth herein. This document amends and restates the Tenneco Inc. Deferred Compensation Plan made as of January 1, 1997 and amends, restates and incorporates the Deferred Compensation Plan for Directors of Tenneco Inc., both as to persons whose deferred compensation accounts are allocated to the Company under the Human Resources Agreement between the Company and Tenneco Inc. (the "Agreement"). 2. ADOPTION AND ADMINISTRATION The plan shall be administered by the Compensation / Nominating / Governance Committee of the Board of Directors of the Company (the "Committee"). The Committee shall have sole and complete authority and discretion to interpret the terms and provisions of the Plan and to adopt, alter and repeal such administrative rules, regulations and practices governing the operation of the Plan, and to determine facts under the Plan as it shall from time to time deem advisable. 3. ELIGIBILITY Directors and U.S. paid participants in the Company's Executive Incentive Compensation Plan shall be eligible to participate in the Plan. Any person who had an account balance in the Tenneco Inc. Deferred Compensation Plan (or the Deferred Compensation Plan for Directors of Tenneco Inc. ) as of the date on which the stock of the Company was distributed to the shareholders of Tenneco Inc. and whose account balance was allocated to the Company under the Agreement shall continue to participate in this Plan. Participation by Active and Former Employees of the Automotive Group shall cease as of the close of business on the Distribution Date and all interests in the Plan of (and Plan liabilities with respect to) such employees shall be transferred to the Tenneco Automotive Inc. Deferred Compensation Plan. Persons eligible to participate in the Plan shall be referred to as "Participant" or "Participants" as the case may be. 4. ELECTION TO DEFER (a) A Participant may elect in writing to defer receipt of all or a specified portion of his or her bonuses or incentive compensation to be received during a calendar year ("Deferral Election"); provided, however, that any election by a Participant who is subject to the reporting and short swing profits liability provisions of Section 16 of the Securities and Exchange Act of 1934, as amended, including an election relating 2 to the form of distribution or to defer income into a "Pactiv stock index account" pursuant to Section 6 of the Plan, shall not be effective until such election and the transactions contemplated thereby shall have been specifically approved by the Committee to the extent such approval is required to avoid liability under Section 16 of the Securities and Exchange Act of 1934 and the regulations thereunder. Amounts deferred under the Plan shall be referred to as the "Deferred Amounts." Once received by the Committee, a Deferral Election cannot be revoked. (b) Except as provided in this Section 4(b), a Deferral Election must be made prior to September 30 of the calendar year in which the bonus or incentive compensation will be awarded. A Participant must make a separate Deferral Election with respect to each calendar year of participation in the Plan. A new Participant in the Plan shall have 30 days following his or her notification by the Committee of his or her eligibility to participate in the Plan to make a Deferral Election with respect to bonus or incentive compensation to be awarded within that calendar year. (c) As specified by the Participant in a Deferral Election, the period of deferral shall be until the Participant dies, terminates employment with Pactiv, or until a specific date selected by the Participant in the Deferral Election. 5. ESTABLISHMENT OF DEFERRED COMPENSATION ACCOUNT At the time of a Participant's initial Deferral Election, the Company shall establish a memorandum account (a "Deferred Compensation Account") for such Participant on its books. The Deferred Amount shall be credited to the Participant's Deferred Compensation Account as of the day on which the Participant would otherwise be entitled to receive the bonus or incentive compensation. Any required withholding for taxes (e.g. Social Security taxes) on the Deferred Amount shall be made from other compensation of the Participant. Adjustments as provided below, shall be made to the Participant's Deferred Compensation Account. 6. ADJUSTMENTS TO DEFERRED AMOUNTS The Committee shall credit the balance of the Participant's Deferred Compensation Account with an earnings factor. The earnings factor will equal the amount the Participant's Deferred Compensation Account would have earned if it had been invested in the investment options listed below. The Participant is permitted to select the investment option used to determine the earnings factor and may change the selection at any time. The Participant may choose more than one investment option in increments of at least one (1) percent. The Company reserves the right to change or amend any of the investment options at any time. The investment options used to determine the earnings factor are: (a) The prime rate of interest as reported by The Chase Manhattan Bank at the first day of each calendar month. -2- 3 (b) Pactiv stock index account -- amount of deferral will be invested in Pactiv stock equivalent unit account. Any investment in this account will be measured solely by the performance of the Company's common stock (including dividends that will be reinvested). (c) The return for selected Mutual Funds currently offered in the Company's qualified thrift plan for salaried employees: (1) Fidelity Growth Company Fund (2) Barclays U.S. Debt Index Fund (Bond) (3) Barclays Daily Equity Index Fund The Company is under no obligation to acquire or provide any of the investments designated by a Participant, and any investments actually made by the Company will be made solely in its name and will remain its property. The crediting of an earnings factor shall occur so long as there is a balance in the Participant's Deferred Compensation Account regardless of whether the Participant has terminated employment. 7. PAYMENT OF DEFERRED AMOUNTS (a) Except as otherwise provided in subsection (b) or (c) below, a Participant's Deferred Amount shall be paid, or commence to be paid, to the Participant, or the Participant's beneficiary, as soon as practicable after: (i) the Participant's death, (ii) the termination of the Participant's employment or service as a director, or (iii) the date specified in the applicable Deferral Election made by the Participant. In the event of the Participant's death, payment of the balance in the Participant's Deferred Compensation Account shall be made, either (i) in a lump sum or (ii) in a number of annual installments, not to exceed five, as soon as administratively feasible to the Participant's designated beneficiary, or if none, to the Participant's estate. (b) Prior to his separation from service, the Participant may elect to receive payment of the balance of his or her Deferred Compensation Account either (i) in a lump sum upon termination or (ii) in a single payment at a specified date prior to termination or (iii) in a number of post termination annual installments, not to exceed five, as the Participant shall elect. If no election is made, a lump sum payment will be made upon the Participant's termination. (c) Anything contained in this Section 7 to the contrary notwithstanding, in the event a Participant incurs a severe financial hardship, the Committee, in its sole discretion -3- 4 and upon written application of such Participant, may direct immediate payment of all or a portion of the then current value of such Participant's Deferred Compensation Account; provided that such payment shall in no event exceed the amount necessary to alleviate such financial hardship; and provided further that in the case of such payment, the Participant's Deferred Compensation Account shall be reduced by 110% of the amount of such payment. 8. PARTICIPANT REPORTS The Committee shall provide a statement to the Participant quarterly concerning the status of his or her Deferred Compensation Account. 9. TRANSFERABILITY OF INTERESTS During the period of deferral, all Deferred Amounts shall be considered as general assets of the Company for use as it deems necessary and shall be subject to the claims of its creditors. The rights and interests of a Participant during the period of deferral shall be those of a general unsecured creditor except that such Participant's rights and interests may not be reached by the creditors of the Participant or the Participant's beneficiary, or anticipated, assigned, pledged, transferred or otherwise encumbered except in the event of the death of the Participant, and then only by will or the laws of descent and distribution. 10. AMENDMENT, SUSPENSION AND TERMINATION The Company at any time may amend, suspend or terminate the Plan or any portion thereof in such manner and to such extent as it may deem advisable and in its best interests. No amendment, suspension and termination shall reduce the amount then credited to a Participant's Deferred Compensation Account. 11. UNFUNDED OBLIGATION The Plan shall not be funded; no trust, escrow or other provisions shall be established to secure payments due under the Plan; and the Plan shall be regarded as unfunded for purposes of the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code. A Participant shall be treated as a general, unsecured creditor at all times under the Plan, and shall have no rights to any specific assets of the Company. All amounts credited to the memorandum accounts of the Participants will remain general assets of the Company and shall be payable solely from the general assets of the Company. 12. NO RIGHT TO EMPLOYMENT OR OTHER BENEFITS Nothing contained herein shall be construed as conferring upon any Participant the right to continue in the employ of the Company. Any compensation deferred and any payments made under this Plan -4- 5 shall not be included in creditable compensation in computing benefits under any employee benefit plan of the Company except to the extent expressly provided therein. 13. DISPUTE RESOLUTION By participating in the Plan, the Participant agrees that any dispute arising under the Plan shall be resolved by binding arbitration in Lake Forest, Illinois under the rules of the American Arbitration Association and that there will be no remedy besides the disputed deferred compensation amount in issue. 14. EFFECTIVE DATE The effective date of this Plan is the date on which the stock of the Company is distributed to the shareholders of Tenneco Inc. IN WITNESS WHEREOF, the Company has caused the Plan to be executed on its behalf by its respective officers thereunder duly authorized, on the day and year set forth below. PACTIV CORPORATION Date: November 1, 1999 By: /S/ John Potempa --------------------- ------------------------------- Its: Vice President Employee ------------------------------- Relations and Administration ------------------------------- -5- EX-10.9 19 PACTIV CORPORATION STOCK OWNERSHIP PLAN 1 EXHIBIT 10.9 PACTIV CORPORATION STOCK OWNERSHIP PLAN (THE "PLAN") 1. Purpose The purpose of the Plan is to promote the long-term success of Pactiv Corporation (the "Company") for the benefit of shareholders by encouraging its directors, officers and key employees to have meaningful investments in the Company so that, as stockholders themselves, those individuals will be more likely to represent the views and interest of other stockholders and by providing incentives to such directors, officers and key employees for continued service. The Company believes that the possibility of participation under the Plan will provide this group of directors, officers and employees an incentive to perform more effectively and will assist the Company in attracting and retaining people of outstanding training, experience and ability. 2. Definitions "Award" means an award or grant made to a Participant under Section 8. "Award Agreement" means the agreement provided in connection with an Award under Section 12. "Award Date" means the date that an Award is made, as specified in an Award Agreement. "Code" means the Internal Revenue Code of 1986, as amended, or any successor legislation. "Committee" means the Compensation / Nominating / Governance Committee of the Board of Directors of the Company, or any successor committee thereto. "Common Stock" means the Company's common stock. "Covered Employees" shall have the meaning specified in Section 162(m)(3) of the Code. "Dividend Equivalent" means an amount equal to the amount of the cash dividends that are declared and become payable after the Award Date for the Award to which it relates and on or before the Settlement Date for such Award. "Fair Market Value" on any date means the average of the highest and the lowest sales prices of a share of Common Stock on the Composite Tape for such date, as reported by the National Quotation Bureau Incorporated, provided that if (i) no sales of Common Stock are included on the Composite Tape for such date, or (ii) in the opinion of the Committee, the sales of Common Stock on such date are insufficient to constitute a representative market, then the Fair Market Value of a share of Common Stock on such date shall be deemed to be the average of the highest and lowest prices of a share of Common Stock as reported on said Composite Tape for the next preceding day on which (x) sales of Common Stock are included and (y) the circumstances described in this clause (ii) do not exist. 2 "ISO" means any Stock Option designated in an Award Agreement as an "Incentive Stock Option" within the meaning of Section 422 of the Code. "Non-Qualified Stock Option" means any Stock Option that is not an ISO. "Option Price" means the purchase price of one share of Common Stock under a Stock Option. "Pactiv Company" means the Company and any stock corporation of which a majority of the voting common or capital stock is owned directly or indirectly by the Company and any other company designated as such by the Committee, but only during the period of such ownership or designation. "Participant" means a director, employee or officer of a Pactiv Company who has been selected by the Committee to receive an Award under the Plan. "Performance Unit" means an Award denominated in cash, the amount of which may be based on the performance of the Participant, of a Pactiv Company or of any subsidiary or division thereof. "Reload Stock Option" means a Stock Option (i) that is awarded, either automatically in accordance with the terms of an Award Agreement in which one or more other Awards are made or by separate Award, upon the exercise of a Stock Option granted under this Plan or otherwise where the Option Price is paid by the option holder by delivery of shares of Common Stock on the Settlement Date for such exercise and (ii) that entitles such holder to purchase the number of shares so delivered for an Option Price equal to the Fair Market Value of a share of Common Stock on such Settlement Date. "Restricted Stock" means shares of Common Stock subject to restrictions and conditions pursuant to Section 8(c). "Settlement Date" means, (i) with respect to any Stock Option that has been exercised in whole or in part, the date or dates upon which shares of Common Stock are to be delivered to the Participant and the Option Price therefor paid, (ii) with respect to any SARs that have been exercised, the date or dates upon which a cash payment is to be made to the Participant, or in the case of SARs that are to be settled in shares of Common Stock, the date or dates upon which such shares are to be delivered to the Participant, (iii) with respect to Performance Units, the date or dates upon which cash or shares of Common Stock are to be delivered to the Participant, (iv) with respect to Dividend Equivalents, the date upon which payment thereof is to be made, and (v) with respect to Stock Equivalent Units, the date upon which payment thereof is to be made, in each case, determined in accordance with the terms of the Award Agreement under which any Award was made. "Stock Appreciation Right" or "SAR" means an Award that entitles the Participant to receive on the Settlement Date an amount equal to the excess of -2- 3 (i) the Fair Market Value of one share of Common Stock on the date of exercise of the SAR over (ii) the Fair Market Value of one share of Common Stock on the Award Date or any other higher amount specified in the Award Agreement. "Stock Equivalent Unit" means an Award that entitles the Participant to receive on the Settlement Date an amount equal to the Fair Market Value of one share of Common Stock on such date. "Stock Option" or "Option" means any right to purchase shares of Common Stock (including a Reload Stock Option) awarded pursuant to Section 8(a). 3. Term The Plan shall be effective as of the date on which the stock of the Company is distributed to the shareholders of Tenneco Inc., and shall remain in effect through the fifth anniversary of that date. After termination of the Plan, no further Awards may be granted other than Reload Stock Options granted in accordance with Award Agreements existing as of the termination of the Plan, but outstanding Awards shall remain effective in accordance with their terms and the terms of the Plan. 4. Plan Administration (a) The Committee shall be responsible for administering the Plan. (i) Composition of the Committee. The Committee shall be comprised of two or more members of the Board of Directors, all of whom shall be "non-employee directors" as defined in Rule 16b-3 and "outside directors" as that term is used in Section 162 of the Code and the regulations promulgated thereunder. (ii) Powers. The Committee shall have full and exclusive discretionary power to interpret the Plan and to determine eligibility for benefits and to adopt such rules, regulations and guidelines for administering the Plan as the Committee may deem necessary or proper. Such power shall include, but not be limited to, selecting Award recipients, establishing all Award terms and conditions and, subject to Section 13, adopting modifications and amendments to the Plan or any Award Agreement, including without limitation, any that are necessary to comply with the laws of the countries in which the Company or its affiliates operate. (iii) Delegation. The Committee may delegate to one or more of its members or to one or more agents or advisors such non-discretionary administrative duties as it may deem advisable, and the Committee or any person to whom it has delegated duties as aforesaid may employ one or more persons to render advice with respect to any responsibility the Committee or such persons may have under the Plan. -3- 4 (b) The Committee may employ attorneys, consultants, accountants and other persons, and the Committee, the Company and its officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Participants, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or Awards, and all members of the Committee shall be fully protected by the Company, to the fullest extent permitted by applicable law, in respect to any such action, determination and interpretation. 5. Eligibility Awards will be limited to persons who are directors, officers, or key employees of the Pactiv Companies. In determining the persons to whom Awards shall be made, the Committee shall, in its discretion, take into account the nature of the person's duties, past and potential contributions to the success of the Pactiv Companies and such other factors as the Committee shall deem relevant in connection with accomplishing the purposes of the Plan. A person who has received an Award or Awards may receive an additional Award or Awards. For purposes of this Section 5, the terms "director," "key employee" and "officer" shall also include any former director, former key employee or former officer of a Pactiv Company or Tenneco Inc. eligible to receive a replacement Award as contemplated in the third sentence of Section 8. 6. Authorized Awards; Limitations (a) Except for adjustments pursuant to Section 7, the maximum number of shares of Common Stock that shall be available for issuance under the Plan (the "Authorized Plan Shares") shall be 24,000,000. (b) If an Award expires unexercised or is forfeited, surrendered, canceled, terminated or settled in cash in lieu of Common Stock, the shares of Common Stock that were theretofore subject (or potentially subject) to such Award may again be made subject to an Award Agreement. (c) Common Stock that may be issued under the Plan may be either authorized and unissued shares, or issued shares that have been reacquired by the Company and that are being held as treasury shares. No fractional shares of Common Stock shall be issued under the Plan; provided, however, that cash, in an amount equal to the Fair Market Value of a fractional share of Common Stock as of the Settlement Date of the Award, shall be paid in lieu of any fractional shares in the settlement of Awards payable in shares of Common Stock. (d) In no event shall the number of shares of Common Stock subject to Stock Options plus the number of shares underlying SARs awarded to any one Participant during the term set forth in Section 3 hereof, exceed 10% of the Authorized Plan Shares. In all events, determinations under the preceding sentence shall be made in a manner that is consistent with Code Section 162 and the regulations promulgated thereunder. -4- 5 7. Adjustments and Reorganizations The Committee may make such adjustments to Awards granted under the Plan (including the terms, exercise price and otherwise) as it deems appropriate in the event of changes that impact the Company, the Company's share price, or share status, provided, that, notwithstanding any other provision hereof, insofar as any Award is subject to performance goals established to qualify payments thereunder as "performance-based compensation" as described in Section 162(m) of the Code, the Committee shall have no power to adjust such Awards other than (i) negative discretion and (ii) the power to adjust Awards for corporate transactions, in either case to the extent permissible under regulations interpreting Code Section 162(m). In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, extraordinary dividend, spin-off, split-off, rights offering, share combination, or other change in the corporate structure of the Company affecting the Common Stock, the number and kind of shares that may be delivered under the Plan shall be subject to such adjustment as the Committee, in its sole discretion, may deem appropriate, and the number and kind and price of shares subject to outstanding Awards and any other terms of outstanding Awards shall be subject to such adjustment as the Committee, in its sole discretion, may deem appropriate. 8. Awards The Committee shall determine the type and amount of any Award to be made to any Participant; provided however, that, except as provided in paragraph (g), no Awards granted pursuant to this Plan shall vest in less than six months after the date the Award is granted. Awards may be granted singly, in combination, or in tandem. Awards may also be made in combination or in tandem with, in replacement of, as alternatives to, or as the payment form for, grants or rights under any other employee benefit or compensation plan of the Pactiv Companies or Tenneco Inc., including any such employee benefit or compensation plan of any acquired entity. (a) Stock Options (i) Awards. Stock Options (including Reload Stock Options) granted under this Plan may be either of the following: (1) an ISO or (2) a Non-Qualified Stock Option. The Committee may grant any Participant one or more ISOs, Non-Qualified Stock Options, or both types of Stock Options, in each case with or without SARs or Reload Stock Options or any other form of Award. Stock Options granted pursuant to this Plan shall be subject to such additional terms, conditions, or restrictions as may be provided in the Award Agreement relating to such Stock Option. (ii) Option Price. The Option Price of a Stock Option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the Award Date. -5- 6 (iii) ISOs. Anything in this Plan to the contrary notwithstanding, no term of this Plan relating to ISOs shall be interpreted, amended or altered, nor shall any discretion or authority awarded under the Plan be exercised, so as to disqualify this Plan under Section 422 of the Code, or, without the consent of the Participants affected, to disqualify any ISO under Section 422 of the Code. An ISO shall not be granted to an individual who, on the date of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the employing Company or of its parent or any subsidiary corporation. The aggregate Fair Market Value, determined on the Award Date, of the shares of Common Stock with respect to which one or more ISOs that are exercisable for the first time by the Participant during any calendar year shall not exceed the $100,000 limitation imposed by Section 422(d) of the Code. (iv) Manner of Payment of Option Price. The Option Price shall be paid in full at the time of the exercise of the Stock Option and may be paid in any of the following methods or combinations thereof; (A) In United States dollars in cash, check, bank draft or money order payable to the order of the Company; (B) By the delivery of shares of Common Stock having an aggregate Fair Market Value on the date of such exercise to the Option Price; (C) Participants may simultaneously exercise the Stock Option and sell their shares of Common Stock acquired thereby and apply the proceeds to the payment of the Option Price pursuant to the procedures established by the Committee; and (D) In any other manner that the Committee shall approve. Any shares of Common Stock required or permitted to be sold by an executive officer of the Company in connection with the payment of the Option Price shall be transferred to the Company. (v) Reload Stock Options. The Committee may award Reload Stock Options to any Participant either in combination with other Awards or in separate Award Agreements that grant Reload Stock Options upon exercise of outstanding stock options granted under this Plan or otherwise. (b) Stock Appreciation Rights. -6- 7 (i) Awards. The Committee may award any Participant SARs, which shall be subject to such additional terms, conditions, or restrictions as may be provided in the Award Agreement relating to such SAR Award, including any limits on aggregate appreciation. SARs may be settled in Common Stock or cash or both. (ii) Award Price. The award price per share of Common Stock of an SAR shall be fixed in the Award Agreement and shall be not less than 100% of the Fair Market Value of a share of Common Stock on the date of the Award. (iii) Distribution of SARs. SARs shall be exercisable in accordance with the conditions and procedures set out in the Award Agreement relating to such SAR Award. (c) Restricted Stock. The Committee may award Restricted Stock to any Participant. Awards of Restricted Stock shall be subject to such conditions and restrictions as are established by the Committee and set forth in the Award Agreement, which may include, but are not limited to, continued service with the Company, achievement of specific business objectives, and other measurements of individual or business unit or Company performance. (d) Stock Equivalent Units. The Committee may award Stock Equivalent Units to any Participant. All or part of any Stock Equivalent Units Award may be subject to conditions and restrictions established by the Committee, and set forth in the Award Agreement, which may include some or all of the following: continued service with the Company, achievement of specific business objectives, and other measurements of individual or business unit or Company performance that may include but shall not be limited to, earnings per share, net profits, total shareholder return, cash flow, return on shareholders' equity, EVA, and cumulative return on net assets employed. Without limiting the generality of the foregoing, it is intended that the Committee shall establish performance goals applicable to Stock Equivalent Units granted to Participants who, in the judgment of the Committee, may be Covered Employees, in such manner as shall permit payments with respect thereto to qualify as "performance-based compensation" as described in Section 162(m)(4)(C) of the Code. The maximum number of Stock Equivalent Units that may be awarded to any Participant in any one calendar year shall not exceed 100,000. (e) Dividend Equivalents. The Committee may provide in any Award Agreement in which Stock Equivalent Units are awarded that such Stock Equivalent Units may accrue Dividend Equivalents. In lieu of awarding Dividend Equivalents, the Committee may provide for automatic Awards of additional Stock Equivalent Units on each date that cash dividends are paid on the Common Stock in an amount equal to (i) the product of the dividend per share on the Common Stock times the total number of Stock Equivalent Units then held by the Participant, divided by (ii) the Fair Market Value of the Common Stock on the dividend payment date. (f) Performance Units. Performance Units shall be based on the attainment, over a specified period, of individual performance targets or, on other parameters that may include but shall not be limited to, earnings per share, net profits, total shareholder return, cash flow, return on shareholders' equity, EVA, and cumulative return on net assets employed. Performance Units may be settled in Common Stock or cash or both. Without limiting the generality of the foregoing, it is -7- 8 intended that the Committee shall establish performance goals applicable to Performance Units granted to Participants who, in the judgment of the Committee, may be Covered Employees, in such a manner as shall permit payments with respect thereto to qualify as "performance-based compensation" as described in Section l62(m)(4)(C) of the Code. The maximum amount of compensation that may be paid to any one Participant by means of Performance Units with respect to any one year shall be $2,000,000. (g) The Committee may also, in its sole discretion, shorten or terminate the restricted period or waive any other conditions for the lapse of restrictions with respect to all or any portion of any Award. Notwithstanding the foregoing, all restricted periods shall terminate and the Awards shall be fully vested with respect to any Participant upon the Participant's Retirement, death or Total Disability, coincident with termination of employment with Pactiv Companies. For purposes of this Section 8: "Retirement" means the Participant's termination of employment with all Pactiv Companies at a time that is determined by the Committee to be Retirement. "Total Disability" means the permanent inability of the Participant, which is a result of accident or sickness, to perform such Participant's occupation or employment for which the Participant is suited by reason of the Participant's previous training, education and experience and which results in the termination of the Participant's employment with all Pactiv Companies. 9. Dividends The Committee may provide in the appropriate Award Agreement that dividends on Restricted Stock may be paid currently in cash or credited to a Participant's account for subsequent distribution as determined by the Committee. The Award Agreement may provide for the reinvestment of dividends paid on Restricted Stock in shares of Common Stock. 10. Deferrals and Settlements Settlement of Awards may be in the form of cash, Common Stock, other Awards, or in combinations thereof as the Committee shall determine, and which such other restrictions as it may impose. The Committee may also require or permit Participants to defer the issuance or vesting of shares or the settlement of Awards under such rules and procedures as it may establish under the Plan. The Committee may also provide that deferred settlements include the payment or crediting of interest on, the deferral amounts or the payment or crediting of Dividend Equivalents on deferred settlements denominated in shares. 11. Transferability and Beneficiaries No Awards under the Plan shall be assignable, alienable, saleable or otherwise transferable other than by will or the laws of descent and distribution, or pursuant to a qualified domestic relations order (as defined by the Code) or Title I of the Employee Retirement Income Security Act, or the rules thereunder unless otherwise determined by the Committee. -8- 9 12. Award Agreements Awards under the Plan shall be evidenced by Award Agreements that set forth the details, conditions and limitations for each Award, which may include the term of an Award (except that (i) except as provided in Section 8(g), no Award shall vest in less than six months after the date the Award is granted and (ii) in no event shall the term of any ISO exceed a period of ten years from the date of its grant), the provisions applicable in the event the Participant's employment terminates, and the Company's authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind any Award. 13. Amendments; Compliance with Applicable Laws The Committee may suspend, terminate, or amend the Plan as it deems necessary or appropriate to better achieve the purposes of the Plan, except that, if shareholder approval is necessary in order for any such amendment to comply with any applicable tax or regulatory requirements, including for these purposes, any approval requirement which is a prerequisite for exemptive relief under Section 16b of the Securities Exchange Act of 1934 (the "Exchange Act"), no such amendment shall be made without the approval of the Company's shareholders. 14. Tax Withholding The Company shall have the right to (i) make deductions from any settlement of an Award made under the Plan, including the delivery or vesting of shares, or require shares or cash or both be withheld from any Award, in each case in an amount sufficient to satisfy withholding of any federal, state or local taxes required by law, or (ii) take such other action as may be necessary or appropriate to satisfy any such withholding obligations. The Committee may determine the manner in which such tax withholding may be satisfied, and may permit shares of Common Stock (rounded up to the next whole number) to be used to satisfy required tax withholding based on the Fair Market Value of any such shares of Common Stock, as of the Settlement Date of the applicable Award. 15. Other Company Benefit and Compensation Programs Unless otherwise specifically determined by the Committee, settlements of Awards received by a Participant under the Plan shall not be deemed a part of the Participant's regular, recurring compensation for purposes of calculating payments or benefits from any Company benefit plan, severance program or severance pay law of any country. Further, the Company may adopt other compensation programs, plans or arrangements as it deems appropriate or necessary. 16. Unfunded Plan Unless otherwise determined by the Committee, the Plan shall be unfunded and shall not create (or be construed to create) a trust or separate fund or funds. The Plan shall not establish any fiduciary relationship between the Company and any Participant or other person. To the extent any person holds any rights by virtue of an Award granted under the Plan, such right (unless otherwise -9- 10 determined by the Committee) shall be no greater than the right of an unsecured general creditor of the Company. 17. Future Rights No person shall have any claim or right to be granted an Award under the Plan, and no Participant shall have any right under the Plan to be retained in the employment of the Company or its affiliates. 18. Governing Law The validity, construction and effect of the Plan, and any actions taken or relating to the Plan, shall be determined in accordance with the laws of the State of Illinois and applicable federal law. 19. Successors and Assigns The Plan shall be binding on all successors and assigns of a Participant, including, without limitation, the estate of such Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant's creditors. 20. Rights as a Shareholder Except as otherwise provided in any Award Agreement, a Participant shall have no rights as a shareholder of the Company until he or she becomes the holder of record of Common Stock. 21. Section 16b No Award or other transaction shall be permitted under this Plan which would have the effect of imposing liability on a Participant under Section 16 of the Exchange Act. Irrespective of any other provision of this Plan or an Award Agreement, any such Award or other transaction purportedly made under or pursuant to this Plan shall be void, ab initio. IN WITNESS WHEREOF, the Company has caused the Plan to be executed on its behalf by its respective officers thereunder duly authorized, on the day and year set forth below. PACTIV CORPORATION Date: November 1, 1999 By: /S/ John Potempa --------------------- -------------------------------- Its: Vice President Employee -------------------------------- Relations and Administration -------------------------------- -10- EX-10.11 20 PACTIV CORPORATION RABBI TRUST 1 EXHIBIT 10.11 PACTIV CORPORATION RABBI TRUST The Pactiv Corporation Rabbi Trust (the "Trust") is hereby adopted by Pactiv, (the "Company") and shall be maintained by and between the Company and certain individuals as trustee (collectively the "Trustee"). Effective on the date on which the stock of the Company is distributed to the shareholders of Tenneco Inc. (the "Effective Date"), the following rules shall govern: WHEREAS, the Company has adopted the nonqualified compensation plan(s) and supplemental pension arrangements as listed in Appendix A (collectively the "Plans" and each a "Plan") covering the benefit obligations allocated to it under the Human Resources Agreement between and among Tenneco Inc. and the Company (the "HR Agreement"), and WHEREAS, the Company wishes to maintain the Trust and to contribute to the Trust assets that shall be held therein, subject to the claims of the Company's creditors in the event of the Company's Insolvency, as herein defined, until paid to Plan participants and their beneficiaries in such manner and at such times as specified in the Plan(s); and WHEREAS, it is the intention of the parties that this Trust shall not affect the status of the Plan(s) as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974; and WHEREAS, it is the intention of the Company to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan(s). NOW, THEREFORE, the parties do hereby adopt the Trust and agree that the Trust shall be comprised, held and disposed of as follows: 1. Establishment of Trust. (a) Subject to the rules explicitly set forth herein, the Trust hereby established is irrevocable. (b) The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly. (c) The principal of the Trust, and any earnings thereon shall be held separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes of Plan participants and general creditors as herein set forth. Plan participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of 1 2 the Trust. Any rights created under the Plan(s) and this Trust Agreement shall be mere unsecured contractual rights of Plan participants and their beneficiaries against the Company. Any assets held by the Trust will be subject to the claims of the general creditors of the Company and any of the Company's domestic subsidiaries. (d) The Company, in its sole discretion, may at any time, or from time to time, make deposits of common stock of the Company or other property in trust with the Trustee to augment the principal to be held, administered and disposed of by the Trustee as provided in this Trust Agreement. Except as provided herein, neither the Trustee nor any Plan participant or beneficiary shall have any right to compel additional deposits. 2. Payments to Plan Participants and their Beneficiaries. (a) At least annually, the Company shall deliver to the Trustee a schedule (the "Payment Schedule") that indicates the amounts payable in respect of each Plan participant (and his or her beneficiaries), that provides a formula or other instructions acceptable to the Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan(s)), and the time of commencement for payment of such amounts. To the extent that any amounts are due to an employee (or beneficiary of an employee) of a subsidiary of the Company, and the subsidiary fails to make such payment, the Company shall do so. Except as otherwise provided herein, if the Company has failed to make payments to the Plan participants and their beneficiaries in accordance with such Payment Schedule the Trustee shall do so. The Company shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan(s) and shall pay amounts withheld to the appropriate taxing authorities. (b) The entitlement of a Plan participant or his or her beneficiaries to benefits under the Plan(s) shall be determined by the Company or such party as it shall designate under the Plan(s), and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan(s). Notwithstanding the foregoing, the Trustee may, without direction from the Company, make payments to participants and beneficiaries in such manner and in such amounts as the Trustee shall determine they are entitled to be paid under the Plans (to the extent funded through the Trust) based on the most recent information furnished to the Trustee by the Company and any supplemental information furnished to the Trustee by a participant or beneficiary upon which the Trustee may reasonably rely in making such determination. Notwithstanding any other provision hereof, persons (other than persons covered by the Tenneco Inc. Pilots' Supplemental Retirement Plan) who were employees of Tenneco Management Company ("TMC") immediately prior to the Effective Date or who are treated as such under the HR Agreement, except such persons who are employed by the Company or a subsidiary of the Company other than TMC immediately after the Effective Date though they may be participants in the plans listed in Appendix A, shall not be entitled to payments under the Trust, and payments shall be available for their benefit obligations through a separate rabbi trust. 2 3 (c) The Company may make payment of benefits directly to Plan participants or their beneficiaries as they become due under the terms of the Plan(s). The Company shall notify the Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payment of benefits in accordance with the terms of the Plan(s), the Company shall make the balance of each such payment as it falls due. The Trustee shall notify the Company where principal and earnings are not sufficient. (d) The Company shall cause its actuary to determine the projected benefit obligation ("PBO") under all of the Plans as of each January 1, commencing with January 1, 2000. To the extent that the value of the assets of the Trust as of the January 1 in question is less than the total PBO under all of the Plans as so determined, the Company shall contribute additional assets to the Trust with a value equal to the difference. To the extent that the assets of the Trust exceed 110% of the PBO, the Company may withdraw assets with a value equal to the excess of the value of the Trust's assets over 110% of such PBO. (e) Notwithstanding any other provision hereof, the Trustee may sell Company common stock or other assets in order to provide cash to pay benefits hereunder. 3. Trustee Responsibility Regarding Payments to Trust Beneficiary when the Company is Insolvent. (a) The Trustee shall cease payment of benefits to Plan participants and their beneficiaries if the Company is Insolvent. The Company shall be considered "Insolvent" for purposes of this Trust Agreement if (i) the Company is unable to pay its debts as they become due, or (ii) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) In the event of Insolvency of the Company the following rules shall apply: (1) The Company shall inform the Trustee in writing of the Company's Insolvency. If a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payment of benefits to Plan participants or their beneficiaries. (2) Unless the Trustee has actual knowledge of the Company's Insolvency, or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the Company is Insolvent. The Trustee may in all events rely on such evidence concerning the Company's solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning the Company's solvency. 3 4 (3) If at any time the Trustee has determined that the Company is Insolvent, the Trustee shall discontinue payments to Plan participants or their beneficiaries and shall hold the assets of the Trust for the benefit of the Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Plan participants or their beneficiaries to pursue their rights as general creditors of the Company with respect to benefits due under the Plan(s) or otherwise. (4) The Trustee shall resume the payment of benefits to Plan participants or their beneficiaries in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that the Company is not Insolvent (or is no longer Insolvent). (c) Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan participants or their beneficiaries under the terms of the Plan(s) for the period of such discontinuance, less the aggregate amount of any payments made to Plan participants or their beneficiaries by the Company in lieu of the payments provided for hereunder during any such period of discontinuance. 4. Payments to the Company. Except as provided in Section 2 or 3 hereof, the Company shall have no right or power to direct the Trustee to return to the Company or to divert to others any of the Trust assets before all payment of benefits have been made to Plan participants and their beneficiaries pursuant to the terms of the Plan(s). 5. The Trustee's Powers of Investment and Management. The Trustee shall have the following powers with respect to any and all assets at any time held by it and constituting part of the Trust Fund: (a) The Trust shall hold the assets of the Trust exclusively in shares of the common stock of the Company, and any assets distributed with respect thereto. (b) All rights associated with any stock held in the Trust, including voting rights, shall be exercised by the Trustee or the person designated by the Trustee, and shall in no event be exercisable by or rest with Plan participants. Voting rights are exercisable by the Trustee in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity. 6. Disposition of Income. 4 5 During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested in Company common stock. 7. Accounting by the Trustee. Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and the Trustee. Within 60 days following the close of each calendar year and within 60 days after the removal or resignation of the Trustee, the Trustee shall deliver to the Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash and securities held in the Trust at the end of such year or as of the date of such removal or resignation as the case may be. 8. Responsibility of the Trustee. (a) The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that the Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by the Company which is contemplated by, and in conformity with, the terms of this Trust and is given in writing by the Company. In the event of a dispute between the Company and a party, the Trustee may apply to a court of competent jurisdiction to resolve the dispute. (b) If the Trustee undertakes or defends any litigation arising in connection with this Trust, the Company agrees to indemnify the Trustee against the Trustee's costs, expenses and liabilities (including, without limitation, attorneys' fees and expenses) relating thereto and to be primarily liable for such payments. If the Company does not pay such costs, expenses and liabilities in a reasonably timely manner, the Trustee may obtain payment from the Trust. (c) The Trustee may consult with legal counsel (who may also be counsel for the Company generally) with respect to any of its duties or obligations hereunder. (d) The Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder. (e) The Trustee shall have, without exclusion, all powers conferred on the 5 6 Trustees by applicable law, unless expressly provided otherwise herein. (f) Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or to applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code. (g) Any action required to be taken by the Company, or direction given by the Company, shall be by resolution of the Compensation / Nominating / Governance Committee of its board of directors or by written direction of one or more of its president, any vice president or treasurer. The Trustee may rely upon a resolution or direction filed with the Trustee and shall have no responsibility for any action taken by the Trustee in accordance with any such resolution or direction. 9. Compensation and Expenses of the Trustee. The Company shall pay all reasonable administrative expenses and the Trustee's fees and expenses. If not so paid, the fees and expenses shall be paid from the Trust. Notwithstanding the foregoing, individuals shall serve without fee but shall be entitled to reimbursement of expenses. 10. Trustee Resignation or Removal. (a) The Trustee or any individual who is one of a group of individuals serving as Trustee may resign at any time by written notice to the Company, which shall be effective 30 days after receipt of such notice unless the Company and the Trustee (or individual as the case may be) agree otherwise. (b) The Trustee or any individual who is one of a group of individuals serving as Trustee may be removed by the Company on 30 days notice or upon shorter notice acceptable by the Trustee (or individual as the case may be). (c) Upon a Change in Control, as defined herein, the Trustee may not be removed by the Company for two years. (d) If the Trustee or any individual who is one of a group of individuals serving as Trustee resigns within two years of a Change in Control, as defined herein, the Trustee shall select a successor Trustee in accordance with the provisions of Section 11 hereof prior to the effective date of the Trustee's resignation; provided that if an individual who is one of a group of individuals serving as Trustee resigns in such circumstances, the remaining individuals serving as Trustee may but are not required to name a successor to replace him. (e) Upon resignation or removal of the Trustee and appointment of a 6 7 successor Trustee, all assets shall subsequently be transferred to the successor Trustee. (f) For purposes hereof, death or incapacity shall be deemed an immediately effective resignation. 11. Appointment of Successor. (a) If the Trustee (or Individual) resigns or is removed in accordance with Section 10 hereof, the Trustee may appoint any third party as a successor to replace the Trustee (or individual) upon resignation or removal. The appointment shall be effective when accepted in writing by the new Trustee, who shall have all of the rights and powers of the former Trustee, including ownership rights in the Trust assets. The former Trustee (or individual) shall execute any instrument necessary or reasonably requested by the Company or the successor Trustee to evidence the transfer. (b) The successor Trustee need not examine the records and acts of any prior Trustee and may retain or dispose of existing Trust assets, subject to the rules hereof. The successor Trustee shall not be responsible for and the Company shall indemnify and defend the successor Trustee from any claim or liability resulting from any action or inaction of any prior Trustee or from any other past event or any condition existing at the time it becomes successor Trustee. 12. Amendment or Termination. (a) This Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan(s) or shall make the Trust revocable. (b) The Trust shall not terminate until the date on which Plan participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan(s). Upon termination of the Trust any assets remaining in the Trust shall be returned to the Company. (c) Upon written approval of Participants or beneficiaries entitled to payment of benefits pursuant to the terms of the Plan(s), the Company may terminate this Trust prior to the time all benefit payments under the Plan(s)have been made. All assets in the Trust at termination shall be returned to the Company. (d) This Trust Agreement may not be amended by the Company for two years following a Change in Control, as defined herein. 13. Miscellaneous. 7 8 (a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. (b) Benefits payable to Plan participants and their beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. (c) This Trust Agreement shall be governed by and construed in accordance with the laws of the State of Illinois. (d) "Change in Control" shall mean the first to occur of the following events (but no event other than the following events), except as otherwise provided below: (i) any person and any of their affiliates or associates becomes the beneficial owner, directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company's then outstanding securities having general voting rights, and a majority of the Incumbent Board (as hereinafter defined) does not approve the acquisition before the acquisition occurs. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur under this section (i) solely because twenty-five percent (25%) or more of the combined voting power of the Company's then outstanding securities having general voting rights is acquired by one or more employee benefit plans maintained by the Company; or (ii) members of the Incumbent Board cease to constitute a majority of the board of the Company; or (iii) the consummation of any plan of merger, consolidation or combination between the Company and any person including becoming a subsidiary of any other person without members of the Incumbent Board, as constituted immediately prior to the merger, consolidation or combination constituting a majority of the board of directors of (A) the successor corporation, or (B) if the surviving or successor corporation is a majority-owned subsidiary of another corporation or corporations, the ultimate parent company of the surviving or successor corporation; or (iv) the consummation of any sale, exchange or other disposition of all or substantially all of the Company's assets without members of the Incumbent Board immediately prior to any sale, exchange or disposition of all or substantially all of the Company's assets constituting a majority of the board of directors of (A) the corporation which holds such assets after such disposition, or, (B) if such corporation is a majority-owned subsidiary of another corporation or corporations, the ultimate parent company of the successor corporation provided, that 8 9 the Company Board may determine conclusively that any transaction does not constitute a sale, exchange or other disposition of substantially all of the Company's assets; or (v) if any person and any of their affiliates and associates, shall elect or have elected, during any period not exceeding 24 months, at least 25% of the members of the Company's board of directors, without the approval of the Incumbent Board and such members are comprised of persons not serving as members of the Company's board of directors immediately prior to the formation of such group or the first solicitation of proxies by such shareholder. For purposes of this definition, the terms "person" and "beneficial owner" shall have the meaning set forth in Sections 3(a) and 13(d) of the Securities Exchange Act of 1934, as amended, in the regulations promulgated thereunder. If the Trustee requests in writing that the Company determine or furnish evidence to enable the Trustee to determine whether a Change in Control has occurred, the Company shall do so in writing as soon as practicable following receipt of such request. (e) "Incumbent Board" shall mean (i) the members of the Company's board of directors on the Effective Date, to the extent that they continue to serve, and (ii) any individual who becomes a member of the Company's board of directors after the Effective Date, if his election or nomination for election as a director is approved by a vote of at least three-quarters of the then Incumbent Board. 14. Corporate Restructuring. In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, extraordinary dividend, spin-off, rights offering, share combination, or other change in the corporate structure of the Company affecting its common stock, the Trustee may, in its sole discretion, cause the transfer of all or a portion of the Trust's assets to a comparable trust maintained by one or more of the resulting corporate entities or otherwise cause such changes in the Trust or its assets as it shall deem appropriate. 9 10 IN WITNESS WHEREOF, the Company and the Trustee have caused this Agreement to be executed on their behalf by their respective officers thereunto duly authorized, on the day and year set forth below. Date: November 2, 1999 --------------------------- ---------------------------------- By: /S/ Richard L. Wambold ----------------------------- Its: Chief Executive Officer ----------------------------- By: /S/ Andrew A. Campbell ----------------------------- Its: Vice President and Chief Financial Officer ----------------------------- By: /S/ Richard C. Mitchell ------------------------------ Its: Vice President Compensation and Benefits ------------------------------ By: /S/ James V. Faulkner ----------------------------- Its: Vice President and Chief Legal Officer ---------------------------- By: /S/ John Potempa ---------------------------- Its: Vice President Employee Relations and Administration ----------------------------- 10 11 APPENDIX A Pactiv Corporation Deferred Compensation Plan Tenneco Inc. Pilots' Supplemental Retirement Plan Pactiv Corporation Supplemental Executive Retirement Plan 11 EX-10.12 21 TENNECO RABBI TRUST AGREEMENT 1 EXHIBIT 10.12 TENNECO RABBI TRUST AGREEMENT This Tenneco Rabbi Trust Agreement (the "Trust Agreement" or "Agreement") is made and entered into as of this 3rd day of November, 1999. WHEREAS, the Tenneco Rabbi Trust (the "Trust") is being adopted as set forth below by Pactiv Corporation ("Pactiv") and shall be maintained by and between Pactiv and one or more individuals as trustees (each a "Trustee" and collectively, the "Trustees") to effect certain terms of the Human Resources Agreement between Tenneco Inc. and Pactiv Corporation f/k/a Tenneco Packaging Inc. (the "HR Agreement") and certain charitable contribution commitments of Tenneco Inc. (Terms not defined herein shall have the meaning set forth in or incorporated by reference into the HR Agreement.); WHEREAS, effective on the date (the "Effective Date") on which the common stock of Pactiv is distributed to the stockholders of Tenneco (the "Spin-off"), Tenneco Management Company ("TMC") shall be obligated to make the payments pursuant to the plans and agreements described on Appendix A (collectively the "Plans" and each a "Plan") to satisfy certain obligations, including obligations allocated to the Packaging Group under the HR Agreement; WHEREAS, Pactiv wishes to maintain the Trust assets, until paid as specified herein; WHEREAS, it is the intention of the parties that this Trust shall not affect the status of the Plan(s) as either a structure not subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or as an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of ERISA. NOW, THEREFORE, the parties do hereby agree as follows: 1. ESTABLISHMENT OF TRUST. (a) The Trust is hereby adopted and shall be comprised, held and disposed of as set forth in this Trust Agreement. Certain assets have been contributed to the Trust. Subject to the terms and conditions explicitly set forth herein, the Trust hereby established is irrevocable. (b) The Trust is intended to be a grantor trust, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, (the "Code") and shall be construed accordingly. (c) The principal of the Trust and any earnings thereon shall be held separate and apart from other funds of Pactiv. Except as required by law or otherwise expressly provided herein, Trust assets shall be used exclusively for the uses and purposes of Plan participants. (Plan participants and their beneficiaries are referred to collectively herein as the "Beneficiaries.") The Beneficiaries shall have no beneficial ownership interest in any assets of the Trust. Any rights of the Beneficiaries created under the Plan(s) shall be unsecured contractual rights of the Beneficiaries. Notwithstanding any term or provision of this Trust Agreement, this Trust Agreement shall not, and shall not be 2 deemed to, in any way amend, supersede or otherwise modify any term or provision of any other agreement, including without limitation, the HR Agreement. In addition, nothing in this provision shall be deemed to change any allocation between Tenneco Inc. and Pactiv of any liabilities, costs or obligations set forth in the Distribution Agreement entered into between the same parties in connection with the Spin-off. Any rights or remedies of any Beneficiary shall be cumulative and in addition to any rights or remedies under this Trust Agreement. (d) Any assets held by the Trust will be subject to the claims of the general creditors of Pactiv and any of Pactiv's domestic subsidiaries in the event of the insolvency of Pactiv as defined in Section 3 hereof. (e) Pactiv, in its sole discretion, may at any time, or from time to time, make additional deposits of cash in trust with the Trustees to augment the principal to be held, administered and disposed of by the Trustees as provided in this Trust Agreement. 2. PAYMENTS TO BENEFICIARIES. (a) Tenneco Business Services Inc. or such other person or entity as shall be designated by the Trustees in writing in their sole discretion ("TBS") shall prepare for the Trustees a schedule (the "Payment Schedule"), which will be revised from time to time as appropriate, that indicates the amounts payable in respect of each Beneficiary, that provides a formula or other instructions acceptable to the Trustees for determining the amounts so payable, the form in which such amount is to be paid, and the time of commencement for payment of such amounts. Except as otherwise provided herein, the Trustees shall cause the Trust to make payments to the Beneficiaries in accordance with such Payment Schedule, as approved or revised by the Trustees. TBS shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to payments made hereunder and shall advise the Trustees in writing of the amounts to be withheld and paid to the appropriate taxing authorities. The Trustees may rely upon the determination of the TBS without independent verification. (b) The entitlement of a Plan participant or his or her beneficiaries to benefits under the Plan(s) shall be determined by TBS or such party as it shall designate under the Plan(s). Any claim for such benefits shall be considered and reviewed under the procedures set forth in the Plan(s). Notwithstanding the foregoing, the Trustees may, without direction, make payments to Beneficiaries in such manner and in such amounts as the Trustees shall determine they are entitled to be paid based on the most recent information furnished to the Trustees upon which the Trustees may reasonably rely in making such determination. Notwithstanding any other provision hereof payments shall be available hereunder only to persons with respect to whom liabilities are allocated to the Packaging Group under the HR Agreement but who are excluded from coverage by the last sentence of Section 2.b. of the Pactiv Corporation Rabbi Trust and to persons who were directors of Tenneco Inc., but do not continue on the board of Tenneco Inc. or Pactiv after the Spin-off. Notwithstanding any other provision hereof, the Vice President - Law of Tenneco Europe Limited and the former general counsel of Tenneco Automotive Inc. shall be covered by this Trust to the extent obligations under their severance packages are allocated to the Packaging Group under the HR Agreement. -2- 3 (c) If the principal of the Trust, and any earnings thereon, are not sufficient to make payment of benefits in accordance with the terms of the Plan(s), Pactiv shall make the balance of each such payment as it falls due. The Trustees shall notify Pactiv at any time the principal and earnings in the Trust are not sufficient. Neither the existence of the Trust nor its termination shall relieve Pactiv of any obligation, including any obligation allocated to the Packaging Group under the HR Agreement, except to the extent that the obligation has been discharged. 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN PACTIV IS INSOLVENT. (a) Pactiv shall be "insolvent" for purposes of this Trust Agreement if (i) it is unable to pay its debts as they become due, or (ii) it is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) If Pactiv determines that it has become insolvent, it shall immediately notify the Trustees in writing of the insolvency. If a person claiming to be a creditor of Pactiv alleges in writing to any Trustee that Pactiv has become insolvent, the Trustees shall determine whether Pactiv is insolvent and, pending such determination, the Trustees shall discontinue payments to Beneficiaries from the Trust. The determination of the Trustees shall be final and binding. (c) Unless any Trustee has actual knowledge of Pactiv's insolvency, or has received notice from Pactiv or a person claiming to be a creditor alleging that it is insolvent, no Trustee shall have a duty to inquire whether Pactiv is insolvent. The Trustees may in all events rely on such evidence concerning the company's solvency as may be furnished to the Trustees and that provides the Trustees with a reasonable basis for making a determination concerning the company's solvency. (d) If at any time the Trustees have determined that Pactiv is insolvent, the Trustees shall discontinue payments to Beneficiaries from the Trust and shall hold the assets of the Trust for the benefit of Pactiv's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Beneficiaries to pursue their rights as general creditors. (e) The Trustees shall resume the payments to Beneficiaries in accordance with Section 2 of this Trust Agreement only after the Trustees have determined that Pactiv is not insolvent (or is no longer insolvent). (f) Provided that there are sufficient assets, if the Trustees discontinue payments pursuant to Section 3(d) hereof and subsequently resume such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Beneficiaries for the period of such discontinuance. 4. PAYMENTS TO PACTIV. -3- 4 Except as specifically provided herein, Pactiv shall have no right or power to direct the Trustees to return to it or to divert to any other company any of the Trust assets before all payments of benefits have been made to the Beneficiaries. 5. THE TRUSTEES' POWERS OF INVESTMENT AND MANAGEMENT. The Trustees shall have the power to hold any and all assets constituting part of the Trust exclusively in cash and cash equivalents. Notwithstanding any other provision hereof, the Trustees may place the Trust assets with Bank of America N.A. ("B of A") under an Investment Management Account, and the assets may be invested in its Short Term Asset Management account or other investments consistent with the guidelines furnished by the Trustees with the execution of their initial agreement with B of A. 6. DISPOSITION OF INCOME. During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and held as described in Section 5. hereof. 7. ACCOUNTING BY THE TRUSTEES. The Trustees shall keep or cause to be kept accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made. The Trustees shall upon reasonable request furnish Pactiv's auditors sufficient information for purposes of the preparation of Pactiv's financial statements. The Trustees may cause TBS to perform the duties described in this Section 7 on behalf of the Trustees. The Trustees shall not be liable for any action or omission of TBS with respect thereto or of Pactiv with respect to its financial statements. 8. RESPONSIBILITY OF THE TRUSTEES. (a) Except as provided herein or pursuant to procedures adopted by the Trustees, the Trustees shall act by action of the majority of individuals then serving as Trustees. No Trustee shall be liable for any action or inaction with respect to the Trust except for gross negligence or willful misconduct. (b) If the Trustees undertake or defend any litigation arising in connection with this Trust, Pactiv shall pay the cost thereof. The Trustees may select counsel for such purpose. (c) The Trustees may consult with legal counsel (who may also be counsel for Pactiv generally) with respect to any of their duties or obligations hereunder. (d) The Trustees may hire agents, accountants, actuaries, investment advisors, financial consultants, custodians or other professionals to assist it in performing any of its duties or obligations hereunder. Such expense shall be paid by Pactiv. The Trustees may rely on such persons and entities without independent verification. -4- 5 (e) The Trustees shall have, without exclusion, all powers conferred on the Trustees by applicable law, unless expressly provided otherwise herein. (f) Notwithstanding any powers granted to the Trustees pursuant to this Trust Agreement or to applicable law, the Trustees shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Code. (g) Any action required to be taken by Pactiv, or direction given by Pactiv, shall be by resolution of its board of directors or by written direction of one or more of its president, any vice president or treasurer. The Trustees may rely upon a resolution or direction filed with the Trustees and shall have no responsibility for any action taken by the Trustees in accordance with any such resolution or direction. 9. COMPENSATION AND EXPENSES OF THE TRUSTEES. Pactiv shall be responsible for all reasonable administrative expenses including without limitation the costs incurred by Trustees with respect to any matter included in Sections 5, 6, 7 and 8 hereof, the Trustees' fees and expenses and the office expenses described in Section 2.01 of the HR Agreement. If not so paid, the fees and expenses shall be paid from the Trust. The Trustees shall be entitled to reimbursement of expenses and fees as determined from time to time by the Trustees. 10. TRUSTEE RESIGNATION. (a) Any individual who is serving as a Trustee may resign at any time by written notice to Pactiv, which shall be effective 30 days after receipt of such notice unless Pactiv and the individual agree otherwise. (b) Any individual who is serving as a Trustee may not be removed by Pactiv. (c) For purposes hereof, the death or incapacity of a Trustee shall be deemed an immediately effective resignation. (d) Notwithstanding any such resignation, the individual shall be entitled to the benefits of Section 14 and section 12(a) hereof. 11. APPOINTMENT OF SUCCESSOR. (a) If an individual resigns in accordance with Section 10 hereof, the remaining individuals acting as Trustees may appoint any other individual as successor to replace him or her. The appointment shall be effective when accepted in writing by the successor, who shall have all of the rights and powers of the predecessor. The predecessor shall execute any instrument necessary or reasonably requested by Pactiv or the successor to evidence the transfer. -5- 6 (b) The successor need not examine records and acts of any predecessor and may retain or dispose of existing Trust assets, subject to the rules hereof. The successor shall not be responsible for and Pactiv shall indemnify and defend the successor from any claim or liability resulting from any action or inaction of any predecessor from any other past event or any condition existing at the time he or she becomes a successor. 12. AMENDMENT OR TERMINATION. (a) This Trust Agreement may be amended by a written instrument executed by each individual then serving as a Trustee, and Pactiv. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan(s) or shall make the Trust revocable. (b) The Trust shall terminate on the date on which Beneficiaries are no longer entitled to payments hereunder or on the date determined by a unanimous vote of the Trustees then serving; provided, however, that in no event shall the Trust terminate prior to December 31, 2001. Upon termination of the Trust any assets remaining shall be paid to Pactiv. From and after the date of such termination, the Trustees shall forever be released from any liability under or arising with respect to the Trust. 13. MISCELLANEOUS. (a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. (b) Benefits payable to Beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. (c) This Trust Agreement shall be governed by and construed in accordance with the internal laws of the State of Illinois, without reference to its choice of law rules. (d) The preamble and preliminary recitals set forth above are hereby incorporated in and made part of this Trust Agreement. 14. INDEMNIFICATION. Pactiv shall, to the fullest extent permitted by law, indemnify, defend and save harmless the Trustees from and against any and all liability (including any judgments, losses, damages, civil penalties, excise taxes, interest and any other form of liability or expense of any kind) or claim of liability (as defined above and including any investigatory action) to which they may be subjected by reason of any act alleged to have been done or omitted to be done in connection with their service as Trustees of the Trust, including all fees and expenses reasonably incurred in their defense if Pactiv fails promptly to provide and diligently pursue such defense after having been requested to do so in writing. Regardless of whether Pactiv assumes such defense, counsel for such defense shall be -6- 7 selected by the indemnified Trustee. Defense costs shall be indemnified and paid as incurred in the course of the defense or investigation. The remedies provided by this Section 14 shall be cumulative and without prejudice to the assertion of any other rights. To the extent that a Trustee receives payment under any liability insurance or other indemnification arrangement with respect to a matter covered by this Section 14, that Trustee shall reimburse the party which has made payments to him or her hereunder, but no reimbursement shall be required except to the extent that the total which he or she has received from all sources is greater than the aggregate amount of his or her liability and expense with respect to that matter. No compromise or settlement, or the consent to the entering of a judgment in respect thereof, of any action, suit, proceeding or claim involving or made against any Trustee shall be made without the prior written consent of the Trustee. Pactiv agrees to purchase and keep in force, or cause one of its subsidiaries to purchase and keep in force, insurance policies fully covering the Trustees with respect to acts under and/or pursuant to this Trust. 15. TRUST ADMINISTRATION The Trustees shall appoint a Trust Administrator, who shall serve at the pleasure of the Trustees. The Trust Administrator may resign or be removed, in either case upon 30 days' notice, which notice requirement may be waived by the Trustees in case of resignation or the Trust Administrator in the case of removal. In the event of the removal, resignation, death or incapacity of the Trust Administrator, the Trustees shall appoint a successor Trust Administrator. Funds may be released for payments hereunder only upon written instructions (or instructions via facsimile) signed by the Trust Administrator then acting and one of the Trustees then acting. For these purposes, the signature of one Trustee shall be deemed to be a signature on behalf of all of the Trustees. -7- 8 IN WITNESS WHEREOF, Pactiv has caused this Trust Agreement to be executed on its behalf by its officer thereunto duly authorized and each of the Trustees has duly executed this Trust Agreement, on the day and year first above written. TRUSTEES: /S/ Dana G. Mead ------------------------------------- Dana G. Mead /S/ Theodore R. Tetzlaff ------------------------------------- Theodore R. Tetzlaff /S/ Karl A. Stewart ------------------------------------- Karl A. Stewart /S/ Stephen J. Smith ------------------------------------- Stephen J. Smith /S/ Robert T. Blakely ------------------------------------- Robert T. Blakely PACTIV CORPORATION By /S/ James V. Faulkner ------------------------------------ Its Vice President and General Counsel ------------------------------------ -8- 9 APPENDIX A Pactiv Corporation Deferred Compensation Plan Pactiv Corporation Supplemental Executive Retirement Plan Obligations under severance packages. Corporate charitable commitments. -9- EX-10.17 22 EMPLOYMENT AGREEMENT 1 EXHIBIT 10.17 [TENNECO LETTERHEAD] March 11, 1997 PERSONAL AND CONFIDENTIAL Mr. Richard L. Wambold 533 Pine Lane Lake Forest, IL 60045 Dear Richard: On behalf of Tenneco Inc. (the "Company" or "Tenneco"), I am pleased to set forth the terms and conditions of your employment: 1. You are employed as Executive Vice President, Specialty and Consumer Products, Tenneco Packaging and shall in the future hold such positions as the Company may determine from time to time. While employed, you will abide by all policies of the Company. 2. You will be paid a base salary of $330,100 a year, which shall be subject to such adjustments as may from time to time be approved by the Compensation and Benefits Committee of the Board of Directors of Tenneco, payable according to the regular pay schedule for salaried employees. 3. You will be a participant in the Tenneco Executive Incentive Compensation Plan ("EICP"), and you will be eligible for EICP distributions based on your performance at the discretion of the Compensation and Benefits Committee of the Board of Directors. 4. You will receive a one-time grant of 10,000 shares of restricted stock, which will vest only upon normal retirement, or other mutually satisfactory separation from service which would include a noncompete provision. In the future you will be eligible to receive annual stock option and performance share awards under the Tenneco Stock Ownership Plan at the discretion of the Compensation and Benefits Committee of the Board of Directors. 5. You will receive annual perquisite compensation of $30,000. 2 Mr. Richard L. Wambold March 11, 1997 Page 2 6. You will receive non-cash compensation and personal benefits comparable to those currently provided to Tenneco executives under Tenneco's policy in effect at the time hereof, including Health Care, Thrift Plan, Long-Term Disability, and Life Insurance (the plan provides for coverage for one and one-half times your salary paid for by the Company, with the option to purchase at your expense up to five times your salary.) 7. Subject to the provisions of this Section 7, your annual pension benefits from all defined benefit pension plans (qualified and non-qualified) commencing at age 55 or your separation from service if later, will, at a minimum, be equal to the product of (x) and (y), where (x) is the average of your total base compensation plus bonus for the three calendar years immediately preceding your separation from service and (y) is the total of 25% plus 2.5% for each full year of service with Tenneco earned in the period commencing January 1, 1997, for a maximum total of 50%. This minimum pension benefit will be more fully described in the Tenneco Supplemental Executive Retirement Plan, and the terms of that plan shall control. You will qualify for the additional benefits provided under this Section only if you render five years of service with the Company in the period commencing January 1, 1997. Sincerely, /s/ P.T. Stecko - ---------------------- ACKNOWLEDGED AND ACCEPTED: /s/ Richard L. Wambold - ---------------------- On this 15th day of April, 1997. EX-10.20 23 TERM LOAN AGREEMENT 1 EXHIBIT 10.20 ================================================================================ TERM LOAN AGREEMENT Dated as of November 3, 1999 among TENNECO PACKAGING INC., BANK OF AMERICA, N.A., as Administrative Agent, and THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO BANC OF AMERICA SECURITIES LLC Lead Arranger and Book Manager ================================================================================ 2 TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1.1 Certain Defined Terms.......................................................2 1.2 Other Interpretive Provisions..............................................18 1.3 Accounting Principles......................................................19 ARTICLE II THE CREDITS 2.1 Commitments................................................................20 2.2 Loan Accounts..............................................................20 2.3 Procedure for Borrowing....................................................20 2.4 Conversion and Continuation Elections for Borrowings.......................21 2.5 Mandatory Termination or Reduction of Commitments..........................23 2.6 Voluntary Termination or Reduction of Commitments..........................23 2.7 Mandatory Prepayments......................................................23 2.8 Optional Prepayments.......................................................23 2.9 Repayment..................................................................24 2.10 Interest..................................................................24 2.11 Fees......................................................................25 2.12 Computation of Fees and Interest..........................................25 2.13 Payments by the Company...................................................25 2.14 Sharing of Payments, Etc..................................................26 ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY 3.1 Taxes......................................................................27 3.2 Illegality.................................................................29 3.3 Increased Costs and Reduction of Return....................................29 3.4 Funding Losses.............................................................30 3.5 Inability to Determine Rates...............................................31 3.6 Certificates of Lenders....................................................32 3.7 Mitigation.................................................................32 3.8 Substitution of Lenders....................................................32 3.9 Survival...................................................................32 ARTICLE IV CONDITIONS PRECEDENT 4.1 Conditions to Effectiveness................................................33 4.2 Conditions to the Borrowing................................................33 (a) ..........................................................33
i 3 (b) Notes; Corporate Documents; Fees...................33 (c) Notice.............................................34 (d) Consummation of Spin-Off...........................34 (e) Consents and Approvals.............................34 (f) Payments of Fees and Expenses......................35 (g) Legal Opinions.....................................35 (h) Certificate........................................35 (i) Other Documents....................................35 ARTICLE V REPRESENTATIONS AND WARRANTIES 5.1 Corporate Existence and Power..............................................35 5.2 Corporate Authorization; No Contravention..................................36 5.3 Governmental Authorization.................................................36 5.4 Binding Effect.............................................................36 5.5 Litigation.................................................................37 5.6 No Default.................................................................37 5.7 ERISA Compliance...........................................................37 5.8 Use of Proceeds; Margin Regulations........................................38 5.9 Title to Properties........................................................38 5.10 Taxes.....................................................................38 5.11 Financial Condition.......................................................38 5.12 Environmental Matters.....................................................39 5.13 Regulated Entities........................................................39 5.14 No Burdensome Restrictions................................................39 5.15 Copyrights, Patents, Trademarks and Licenses, etc. .......................39 5.16 Subsidiaries..............................................................40 5.17 Insurance.................................................................40 5.18 Year 2000 Problem.........................................................40 5.19 Full Disclosure...........................................................40 5.20 Solvency, etc.............................................................41 5.21 Labor Relations...........................................................41 ARTICLE VI AFFIRMATIVE COVENANTS 6.1 Financial Statements.......................................................41 6.2 Certificates; Other Information............................................42 6.3 Notices....................................................................42 6.4 Preservation of Corporate Existence, Etc...................................44 6.5 Maintenance of Property....................................................44 6.6 Insurance..................................................................44 6.7 Payment of Obligations.....................................................44 6.8 Compliance with Laws.......................................................45 6.9 Compliance with ERISA......................................................45 6.10 Inspection of Property and Books and Records..............................45 6.11 Environmental Laws........................................................45 6.12 Use of Proceeds...........................................................45
ii 4 6.13 Change in Business........................................................46 ARTICLE VII NEGATIVE COVENANTS 7.1 Financial Condition Covenants..............................................46 (a) Minimum Interest Coverage Ratio.............................46 (b) Maximum Total Debt to EBITDA Ratio..........................46 7.2 Limitation on Liens........................................................46 7.3 Restrictions on Subsidiaries...............................................48 7.4 Consolidation, Mergers and Sales of Assets.................................49 7.5 Limitation on Subsidiary Indebtedness......................................49 7.6 Transactions with Affiliates...............................................49 7.7 Use of Proceeds............................................................49 7.8 ERISA......................................................................50 7.9 Securitization Transactions................................................50 ARTICLE VIII EVENTS OF DEFAULT 8.1 Event of Default...........................................................50 (a) Non-Payment.................................................50 (b) Representation or Warranty..................................50 (c) Specific Defaults...........................................50 (d) Other Defaults..............................................51 (e) Cross-Default...............................................51 (f) Insolvency; Voluntary Proceedings...........................51 (g) Involuntary Proceedings.....................................51 (h) ERISA.......................................................52 (i) Monetary Judgments..........................................52 (j) Non-Monetary Judgments......................................52 (k) Change of Control...........................................52 8.2 Remedies...................................................................52 8.3 Notice of Defaults.........................................................53 8.4 Rights Not Exclusive.......................................................53 ARTICLE IX THE ADMINISTRATIVE AGENT 9.1 Appointment and Authorization; "Administrative Agent"......................53 9.2 Delegation of Duties.......................................................54 9.3 Liability of Administrative Agent..........................................54 9.4 Reliance by Administrative Agent...........................................55 9.5 Notice of Default..........................................................55 9.6 Credit Decision............................................................56 9.7 Indemnification of Administrative Agent....................................56 9.8 Administrative Agent in Individual Capacity................................57 9.9 Successor Administrative Agent.............................................57
iii 5 9.10 Withholding Tax...........................................................58 ARTICLE X MISCELLANEOUS 10.1 Amendments and Waivers....................................................59 10.2 Notices...................................................................60 10.3 No Waiver; Cumulative Remedies............................................61 10.4 Costs and Expenses........................................................61 10.5 Company Indemnification...................................................62 10.6 Payments Set Aside........................................................62 10.7 Successors and Assigns....................................................63 10.8 Assignments, Participations, etc..........................................63 10.9 Confidentiality...........................................................65 10.10 Set-off..................................................................66 10.11 Notification of Addresses, Lending Offices, Etc..........................67 10.12 Counterparts.............................................................67 10.13 Severability.............................................................67 10.14 No Third Parties Benefited...............................................67 10.15 Governing Law and Jurisdiction...........................................67 10.16 Waiver of Jury Trial.....................................................68 10.17 Enitre Agreement.........................................................68
iv 6 SCHEDULES Schedule 1.1 Pricing Schedule Schedule 5.12 Environmental Matters Schedule 5.16 Subsidiaries and Minority Interests Schedule 5.21 Labor Relations Schedule 7.2 Permitted Liens Schedule 10.2 Lending Offices; Addresses for Notices EXHIBITS Exhibit A Form of Notice of Borrowing Exhibit B Form of Notice of Conversion/Continuation Exhibit C Form of Compliance Certificate Exhibit D Form of Opinion of Counsel to the Company Exhibit E Form of Assignment and Acceptance Exhibit F Form of Promissory Note v 7 TERM LOAN AGREEMENT This TERM LOAN AGREEMENT is entered into as of November 3, 1999, among TENNECO PACKAGING INC., a Delaware corporation (the "Company"), the several financial institutions from time to time party to this Agreement (collectively the "Lenders"; individually each a "Lender") and BANK OF AMERICA, N.A., as administrative agent for the Lenders. INTRODUCTION 1. Pursuant to a Distribution Agreement (the "Distribution Agreement") to be entered into between Tenneco Inc. ("Tenneco") and the Company, which is a wholly-owned subsidiary of Tenneco, Tenneco will agree to separate and divide its existing businesses so that (a) the assets, liabilities and operations of its packaging business and administrative services operations (collectively, the "Packaging Business") will be owned directly and indirectly by the Company and (b) the assets, liabilities and operations of its automotive business will be directly and indirectly owned by Tenneco. Tenneco will be renamed Tenneco Automotive Inc. immediately following the distribution described in the succeeding paragraph. 2. Following the separation and division described in paragraph 1, Tenneco shall distribute, as a dividend to the holders of the shares of its common stock, all of the capital stock of the Company (the transactions described in paragraph 1 above and this paragraph 2, as more particularly described in the Company's filing on Form 10 and Form S-4, the "Spin-Off"). 3. The Company intends to sell the 43% of the common stock of Packaging Corporation of America, a Delaware corporation ("PCA"), owned by it to the public in a registered public offering (the "PCA IPO"). Such sale is not a condition to the Spin-Off and may take place before or after the Spin-Off (and may be at such time and price as is permitted by market conditions). 4. Pursuant to the Distribution Agreement and in connection with the Spin-Off and any PCA IPO, certain pre-existing indebtedness of the Company, Tenneco and their respective subsidiaries will be paid in full, canceled or realigned through some combination of tender offers, exchange offers, prepayments or other forms of debt retirement. 5. Tenneco has requested that the Lenders enter into this Agreement in order to make available to the Company a $1,500,000,000 credit facility on the terms and conditions set forth herein. 8 In consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS 1.1 Certain Defined Terms. The following terms have the following meanings: Acquisition means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) provided that the Company or the Subsidiary is the surviving entity. Administrative Agent means Bank of America in its capacity as agent for the Lenders hereunder, and any successor agent arising under Section 9.9. Administrative Agent-Related Persons means Bank of America and any successor agent arising under Section 9.9, together with their respective Affiliates (including, in the case of Bank of America, BAS), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates. Administrative Agent's Payment Office means the address for payments set forth on Schedule 10.2 or such other address as the Administrative Agent may from time to time specify by notice to the Company and the Lenders. Affiliate means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities or membership interests, by contract or otherwise; provided that none of PCA, Tenneco, Tenneco Automotive Inc. or any Subsidiary of Tenneco Automotive Inc. (except for any thereof that are part of the Tenneco 2 9 Packaging Group) shall be an Affiliate of the Company for purposes of this Agreement. Aggregate Commitment Amount means the amount of the combined Commitments of all Lenders. As of the Signing Date, the Aggregate Commitment Amount is $1,500,000,000, as such amount shall be reduced pursuant to Section 2.5 or may be reduced pursuant to Section 2.6. Agreement means this Credit Agreement. Applicable Margin - see Schedule 1.1. Assignee - see subsection 10.8(a). Assignment and Acceptance - see subsection 10.8(a). Attorney Costs means and includes all reasonable fees and disbursements of any law firm or other external counsel. Bank of America means Bank of America, N.A., a national banking association. Bankruptcy Code means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. ss.101, et seq.). BAS means Bank of America Securities LLC, a Delaware limited liability company. Base Rate means, for any day, the higher of: (a) 0.50% per annum above the latest Federal Funds Rate; or (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America, as its "prime", "reference" or equivalent rate. (The "prime", "reference" or equivalent rate is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate.) Any change in the reference rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. Base Rate Loan means a Loan or portion thereof that bears interest based on the Base Rate. Borrowing means a borrowing hereunder consisting of Loans of the same Type (and, in the case of Offshore Rate Loans, having the same Interest Period) made on the Funding Date or, thereafter, continued or converted on the same day. 3 10 Business Day means any day other than a Saturday, Sunday or other day on which commercial banks in New York City or Charlotte, North Carolina are authorized or required by law to close and, if the applicable Business Day relates to any Offshore Rate Loan, means such a day on which dealings in Dollars are carried on in the London interbank market. Capital Adequacy Regulation means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank. Capital Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal property by such Person that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person. Change of Control means that (a) any Person or group (within the meaning of Rule 13d-5 of the SEC under the Exchange Act), other than Tenneco prior to the date of the Spin-Off, shall have beneficial ownership (within the meaning of Rule 13d-3 promulgated by the SEC) of 25% or more of the Voting Stock of the Company or (b) a majority of the members of the Board of Directors of the Company shall cease to be Continuing Members. Code means the Internal Revenue Code of 1986, and regulations promulgated thereunder. Commitment means as to any Lender, such Lender's commitment hereunder to make a Loan to the Company in such Lender's Pro Rata Share of the Aggregate Commitment Amount. Company - see the Preamble. Compliance Certificate means a certificate substantially in the form of Exhibit C. Computation Period means any period of four consecutive fiscal quarters ending on the last day of a fiscal quarter. Consolidated EBITDA means, with respect to the Company and its Subsidiaries for any period of computation thereof during such period, the sum of, without duplication, (i) Consolidated Net Income, plus (ii) Consolidated Interest Expense during such period, plus (iii) taxes on income during such period, plus (iv) amortization during such 4 11 period, plus (v) depreciation during such period plus (vi) minority interest expense. Consolidated Interest Expense means, with respect to any period of computation thereof, the interest expense (net of interest income) of the Company and its Subsidiaries, including (i) the amortization of debt discounts, (ii) the amortization of all fees payable in connection with the incurrence of Indebtedness to the extent included in interest expense, and (iii) the portion of any lease expense incurred in connection with Capital Leases allocable to interest expense. Consolidated Net Income means, for any period of computation thereof, the net income (or loss) of the Company and its Subsidiaries on a consolidated basis for such period, but excluding (i) all non-cash non-recurring gains or losses, (ii) for the fiscal year ending December 31, 1999, cash non-recurring charges in an amount not to exceed $50,000,000 and (iii) with respect to any discontinued operations, any gain (or loss) resulting therefrom. For purposes of this definition, and otherwise for purposes of measuring covenant compliance under Section 7.1, calculations for fiscal quarters within any Computation Period in which any discontinuance of operations has occurred, but which ended prior to the fiscal quarter in which such discontinuance occurred, shall not be restated to reflect such discontinuance of operations. Contingent Obligation means, as to any Person, any direct or indirect liability of such Person, whether or not contingent, (a) with respect to any Indebtedness, lease, dividend, letter of credit or other obligation (the "primary obligations") of another Person (the "primary obligor"), including any obligation of such Person (i) to purchase, repurchase or otherwise acquire such primary obligations or any security therefor, (ii) to advance or provide funds for the payment or discharge of any such primary obligation, or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (iv) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect thereof (each a "Guaranty Obligation"); (b) with respect to any Surety Instrument issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings or payments; or (c) to 5 12 purchase any materials, supplies or other property from, or to obtain the services of, another Person if the relevant contract or other related document or obligation requires that payment for such materials, supplies or other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered. The amount of any Contingent Obligation shall (a) in the case of Guaranty Obligations, be deemed equal to the stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof, and (b) in the case of other Contingent Obligations, be equal to the maximum reasonably anticipated liability in respect thereof. Continuing Member means a member of the Board of Directors of the Company who either (a) was a member of the Company's Board of Directors on the Signing Date and has been such continuously thereafter or (b) became a member of such Board of Directors after the Signing Date and whose election or nomination for election was approved by a vote of the majority of the Continuing Members then members of the Company's Board of Directors. Contractual Obligation means, as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other document to which such Person is a party or by which it or any of its property is bound. Conversion/Continuation Date means any date on which, under Section 2.4, the Company (a) converts Loans of one Type to the other Type or (b) continues Offshore Rate Loans for a new Interest Period. Debt or Equity Issuance means any issuance by the Company or any Subsidiary of equity securities or securities representing Indebtedness (other than (a) under the Short Term Credit Agreement dated as of September 29, 1999 among the Company, various financial institutions as lenders, Bank of America, as administrative agent, Credit Suisse First Boston, as syndication agent, and Bank One, NA and Banque Nationale de Paris, as co-documentation agents,(b) the Long Term Credit Agreement dated as of September 29, 1999 among the Company, various financial institutions as lenders, Bank of America, as administrative agent, Credit Suisse First Boston, as syndication agent, and Bank One, NA and Banque Nationale de Paris, as co-documentation agents, (c)debt securities issued by the Company pursuant to the public debt exchange offer made in connection with the Spin-Off (as more 6 13 fully described in the Form 10),(d) Indebtedness incurred by the Company, the proceeds of which are used for working capital and/or the acquisition or leasing of property by the Company, and (e) Subsidiary Indebtedness permitted under Section 7.5). Distribution Agreement - see paragraph 1 of the Introduction to this Agreement. Dollars, dollars and $ each mean lawful money of the United States. Eligible Assignee means (a) a financial institution organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least $100,000,000; (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the OECD), or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000, provided that such bank is acting through a branch or agency located in the United States; and (c) a Person that is primarily engaged in the business of commercial lending and that is (i) a Lender, (ii)a Subsidiary of a Lender, (iii) a Subsidiary of a Person of which a Lender is a Subsidiary, or (iv) a Person of which a Lender is a Subsidiary. Environmental Claims means all written claims, however asserted, by any Governmental Authority alleging potential liability or responsibility for violation of any Environmental Law or for release to the environment. Environmental Laws means all federal, state, local or municipal laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative or judicial orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authorities, in each case relating to environmental, health, safety and land use matters. ERISA means the Employee Retirement Income Security Act of 1974, and the regulations promulgated thereunder. ERISA Affiliate means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code). 7 14 ERISA Event means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a substantial cessation of operations which is treated as such a withdrawal; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate a Pension Plan under Section 4041(c) of ERISA, the termination of a Multiemployer Plan under 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate. Event of Default means any of the events or circumstances specified in Section 8.1; provided that any requirement of notice or lapse of time (or both) has been satisfied. Exchange Act means the Securities and Exchange Act of 1934. Federal Funds Rate means, for any day, the rate per annum (rounded upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Bank of America on such day on such transactions as determined by the Administrative Agent. Form 10 means the Company's Information Statement on Form 10 filed with the SEC on July 15, 1999, as amended by Form 10 Amendment No. 3, filed with the SEC on October 18, 1999. 8 15 FRB means the Board of Governors of the Federal Reserve System, and any Governmental Authority succeeding to any of its principal functions. Funding Date - see Section 4.2. GAAP means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination. Governmental Authority means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing. Guaranty Obligation has the meaning specified in the definition of Contingent Obligation. Indebtedness of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person to pay the deferred purchase price of property or services, except such obligations arising in the ordinary course of business and maturing less than one year from the date of creation thereof; (c) all non-contingent reimbursement or payment obligations of such Person with respect to Surety Instruments; (d) all non- contingent obligations of such Person evidenced by notes, bonds, debentures or similar instruments; (e) all obligations of such Person with respect to Capital Leases; (f) all indebtedness of any other Person of the types referred to in clauses (a) through (e) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness; provided that the amount of any such Indebtedness shall be deemed to be the lesser of the face principal amount thereof and the fair market value of the property subject to such Lien; (g) all indebtedness of the types described in clauses (a) through (e) above of any 9 16 partnership in which such Person is a general partner unless expressly non-recourse to such Person; and (h) all Guaranty Obligations of such Person in respect of Indebtedness of the types described above; provided that Indebtedness shall not include (i) obligations arising out of the endorsement of instruments for deposit or collection in the ordinary course of business or (ii) the obligations of such Person under an operating lease, a synthetic lease or other similar arrangement. Indemnified Liabilities - see Section 10.5. Indemnified Person - see Section 10.5. Independent Auditor - see subsection 6.1(a). Insolvency Proceeding means, with respect to any Person, (a) any case, action or proceeding with respect to such Person before any court or Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case undertaken under any U.S. Federal, state or foreign law, including the Bankruptcy Code. Interest Coverage Ratio means, for any Computation Period, the ratio of (a) Consolidated EBITDA for such Computation Period to (b) Consolidated Interest Expense for such Computation Period. Interest Payment Date means, as to any Base Rate Loan, the last Business Day of each calendar quarter; and as to any Offshore Rate Loan, the last day of each Interest Period applicable to such Loan and, if any such Interest Period exceeds three months, each three-month anniversary of the first day of such Interest Period. Interest Period means, (a) as to any Offshore Rate Loan, the period commencing on the Funding Date or on the date on which such Loan is converted into or continued as an Offshore Rate Loan, and ending on the date one, two, three or six months thereafter as selected by the Company in its Notice of Borrowing or Notice of Conversion/Continuation, as the case may be; provided that: (i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the following Business Day unless 10 17 the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day; (ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and (iii) no Interest Period shall extend beyond May 3, 2001. IRS means the Internal Revenue Service, and any Governmental Authority succeeding to any of its principal functions under the Code. Knowledge of the Company means the actual knowledge of any Responsible Officer. Lender - see the Preamble. Lending Office means, as to any Lender, the office or offices of such Lender specified as its "Lending Office" or "Domestic Lending Office" or "Offshore Lending Office", as the case may be, on Schedule 10.2, or such other office or offices as such Lender may from time to time notify the Company and the Administrative Agent. LIBOR - see the definition of Offshore Rate. Lien means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance, lien (statutory or other) or preferential arrangement of any kind or nature whatsoever in respect of any property (including those created by, arising under or evidenced by any conditional sale or other title retention agreement, the interest of a lessor under a Capital Lease, or any financing lease having substantially the same economic effect as any of the foregoing, but not including the interest of a lessor under an operating lease). Loan - see Section 2.1. Each Loan may be divided into portions which bear interest at different rates (i.e., a Base Rate Loan or one or more Offshore Rate Loans). Loan Documents means this Agreement and any Notes. 11 18 Majority Lenders means Lenders holding Pro Rata Shares aggregating more than 50%. Margin Stock means "margin stock" as such term is defined in Regulation T, U or X of the FRB. Material Adverse Effect means (a)any event or circumstance that has resulted in or would reasonably be expected to result in a material adverse change in, or has had or would be reasonably expected to have a material adverse effect upon, the operations, business, properties or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole or (b) any event or circumstance that would prevent the Spin-Off. Material Financial Obligations means Indebtedness or Contingent Obligations of the Company or any Subsidiary, or obligations of the Company or any Subsidiary in respect of any Securitization Transaction, in an aggregate amount (for all applicable Indebtedness, Contingent Obligations and obligations in respect of Securitization Transactions, but without duplication) equal to $50,000,000 or more. Material Subsidiary means, at any time, any Subsidiary having at such time either (i) total (gross) revenues for any Computation Period in excess of 5% of total (gross) revenues for the Company and its Subsidiaries or (ii) total assets, as of the last day of the preceding fiscal quarter, having a net book value in excess of 5% of the consolidated assets of the Company and its Subsidiaries, in each case, based upon the Company's most recent annual or quarterly financial statements delivered to the Lenders and the Administrative Agent under Section 6.1. Moody's means Moody's Investors Service, Inc., or any successor thereto. Moody's Rating means the actual rating level assigned by Moody's to the Company's senior unsecured long-term public debt. Multiemployer Plan means a "multiemployer plan", within the meaning of Section 4001(a)(3) of ERISA, with respect to which the Company or any ERISA Affiliate may have any liability. Net Cash Proceeds means (a) with respect to the PCA IPO, the aggregate cash proceeds (including cash proceeds received by the Company or any Subsidiary pursuant to the PCA IPO), net of (i) the direct costs to the Company and its Subsidiaries of the PCA IPO (including legal, accounting and 12 19 investment banking fees) and (ii) taxes paid or reasonably estimated by the Company to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements); and (b) with respect to any Debt or Equity Issuance, the aggregate cash proceeds received by the Company or any Subsidiary pursuant to such issuance, net of the direct costs relating to such issuance (including legal, accounting and investment banking fees). Note means a promissory note executed by the Company in favor of a Lender pursuant to subsection 2.2(b), in substantially the form of Exhibit F. Notice of Borrowing means a notice in substantially the form of Exhibit A. Notice of Conversion/Continuation means a notice in substantially the form of Exhibit B. Obligations means all advances, debts, liabilities, obligations, covenants and duties arising under any Loan Document owing by the Company to any Lender, the Administrative Agent or any other Indemnified Person, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, or now existing or hereafter arising. Offshore Rate means, for any Interest Period, with respect to Offshore Rate Loans comprising part of the same Borrowing, the rate of interest per annum (rounded upward to the next 1/100th of 1%) determined by the Administrative Agent as follows: Offshore Rate = LIBOR ------------------------------------ 1.00 - Eurodollar Reserve Percentage Where, "Eurodollar Reserve Percentage" means for any day for any Interest Period the maximum reserve percentage (expressed as a decimal, rounded upward, if necessary, to an integral multiple of 1/100th of 1%) in effect on such day (whether or not applicable to any Lender) under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"); and 13 20 "LIBOR" means, for any Interest Period, the rate of interest per annum determined by the Administrative Agent to be equal to the London interbank offered rate for deposits in Dollars having a maturity equal or comparable to such Interest Period as indicated on display page 3750 of the Dow Jones Markets Screen as of 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period. If such rate does not appear on page 3750 of the Dow Jones Markets screen (or otherwise on such screen), "LIBOR" shall be determined by reference to such other comparable publicly available service for displaying such rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered deposits in Dollars having a maturity equal or comparable to such Interest Period by major banks in the interbank market at or about 11:00 a.m. (New York City time) two Business Days prior to the commencement of such Interest Period in the approximate amount of the Loan to be made or continued as, or converted into, an Offshore Rate Loan by Bank of America. The Offshore Rate shall be adjusted automatically as to all Offshore Rate Loans then outstanding as of the effective date of any change in the Eurodollar Reserve Percentage. Offshore Rate Loan means a Loan or portion thereof that bears interest based on the Offshore Rate. Organization Documents means (i) for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation, any shareholder rights agreement, and all applicable resolutions of the board of directors (or any committee thereof) of such corporation, (ii) for any partnership or joint venture, the partnership or joint venture agreement and any other organizational document of such entity, (iii) for any limited liability company, the certificate or articles of organization, the operating agreement and any other organizational document of such limited liability company, (iv) for any trust, the declaration of trust, the trust agreement and any other organizational document of such trust and (v) for any other entity, the document or agreement pursuant to which such entity was formed and any other organizational document of such entity. Other Taxes means any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made 14 21 hereunder or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, this Agreement or any other Loan Document. Packaging Business - see paragraph 1 of the Introduction to this Agreement. Participant - see subsection 10.8(d). PBGC means the Pension Benefit Guaranty Corporation, or any Governmental Authority succeeding to any of its principal functions under ERISA. PCA - see paragraph 3 of the Introduction to this Agreement. PCA IPO - see paragraph 3 of the Introduction to this Agreement. Pension Plan means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA, other than a Multiemployer Plan, with respect to which the Company or any ERISA Affiliate may have any liability. Permitted Liens - see Section 7.2. Person means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or Governmental Authority. Plan means an employee benefit plan (as defined in Section 3(3) of ERISA), other than a Multiemployer Plan, with respect to which the Company or any ERISA Affiliate may have any liability, and includes any Pension Plan. Pro Rata Share means for any Lender at any time (a) prior to the making of the Loans, the percentage which such Lender's Commitment is of the Aggregate Commitment Amount, and (b) after the making of the Loans, the percentage which the principal amount of such Lender's Loan is of the aggregate principal amount of all Loans. Reportable Event means, any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC. Requirement of Law means, as to any Person, any law (statutory or common), treaty, rule or regulation or 15 22 determination of a court, an arbitrator or of a Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. Responsible Officer means the chief executive officer or the president of the Company, or any other officer having substantially the same authority and responsibility; or, with respect to financial matters, the chief financial officer or the treasurer of the Company, or any other officer having substantially the same authority and responsibility; or, with respect to litigation and Requirements of Law, the general counsel of the Company. S&P means Standard & Poor's Ratings Services, a Division of the McGraw-Hill Companies, or any successor thereto. S&P Rating means the actual rating level assigned by S&P to the Company's senior unsecured long-term public debt. SEC means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions. Securitization Transaction means any sale, assignment or other transfer by the Company or any Subsidiary of accounts receivable, lease receivables or other payment obligations owing to the Company or any Subsidiary or any interest in any of the foregoing, together in each case with any collections and other proceeds thereof, any collection or deposit accounts related thereto, and any collateral, guaranties or other property or claims in favor of the Company or such Subsidiary supporting or securing payment by the obligor thereon of, or otherwise related to, any such receivables. Signing Date - see Section 4.1. Spin-Off - see paragraph 2 of the Introduction to this Agreement. Subsidiary of a Person means any corporation, association, partnership, limited liability company, joint venture or other business entity of which more than 50% of the voting stock, membership interests or other equity interests is owned or controlled directly or indirectly by such Person, or one or more of the Subsidiaries of such Person, or a combination thereof. Unless the context otherwise clearly requires, references herein to a "Subsidiary" refer to a Subsidiary of the Company. 16 23 Surety Instruments means all letters of credit (including standby and commercial), bankers' acceptances, bank guaranties, shipside bonds, surety bonds and similar instruments. Taxes means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of each Lender and the Administrative Agent, taxes imposed on or measured by its net income, franchise taxes and similar taxes. Tenneco - see paragraph 1 of the Introduction to this Agreement. Tenneco Packaging Group means the Company, its Subsidiaries as of the Signing Date, and the companies which are expected to become its Subsidiaries in connection with the Spin-Off as of the Funding Date. Total Debt means, at any time, the sum (determined on a consolidated basis and without duplication) of all Indebtedness of the Company and its Subsidiaries. Total Debt to EBITDA Ratio means at any time the ratio of (a) Total Debt at such time to (b) Consolidated EBITDA for the Computation Period ending on the last day of the most recent fiscal quarter for which the Company has delivered financial statements pursuant to Section 6.1(a) or 6.1(b). Type refers to the characterization of a Loan, or a portion of a Loan, as an Offshore Rate Loan or a Base Rate Loan. Unfunded Pension Liability means the excess of a Pension Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of such Plan's assets, determined in accordance with the assumptions used for funding such Pension Plan pursuant to Section 412 of the Code for the applicable plan year. United States and U.S. each means the United States of America. Unmatured Event of Default means any event or circumstance which, with the giving of notice, the lapse of time or both, will (if not cured or otherwise remedied during such time) constitute an Event of Default. 17 24 Voting Stock means, with respect to any Person, any shares of stock or other equity interests of any class or classes of such Person whose holders are entitled under ordinary circumstances (irrespective of whether at the time stock or other equity interests of any other class or classes shall have or might have voting power by reason of the happening of any contingency) to vote for the election of a majority of the directors, managers, trustees or other governing body of such Person. Wholly-Owned Subsidiary means any Subsidiary in which (other than directors' qualifying shares required by law) 100% of the capital stock, membership interests or other equity interests of each class having ordinary voting power, and 100% of the capital stock, membership interests or other equity interests of every other class, in each case, at the time as of which any determination is being made, is owned, beneficially and of record, by the Company, or by one or more of the other Wholly-Owned Subsidiaries, or both. 1.2 Other Interpretive Provisions. (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. (b) The words "hereof", "herein", "hereunder" and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and subsection, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified. (c) (i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced. (ii) The term "including" is not limiting and means "including without limitation." (iii) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including"; the words "to" and "until" each mean "to but excluding", and the word "through" means "to and including." (d) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, 18 25 replacing, supplementing or interpreting the statute or regulation. (e) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement. (f) This Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. (g) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Administrative Agent, the Company and the other parties, and are the products of all parties. Accordingly, they shall not be construed against the Lenders or the Administrative Agent merely because of the Administrative Agent's or Lenders' involvement in their preparation. 1.3 Accounting Principles. (a) Unless the context otherwise requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP, consistently applied (except for changes agreed to by the Company's independent public accountants); provided that if the Company notifies the Administrative Agent that the Company wishes to amend any covenant in Article VII to eliminate the effect of any change in GAAP that became effective during the preceding one-year period on the operation of such covenant (or if the Administrative Agent notifies the Company that the Required Lenders wish to amend Article VII for such purpose), then the Company's compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Company and the Required Lenders. (b) All financial computations required under this Agreement for any period prior to the Spin-Off shall be made on a pro forma basis and in a manner consistent with the Form 10. (c) References herein to "fiscal year" and "fiscal quarter" refer to such fiscal periods of the Company. 19 26 ARTICLE II THE CREDITS 2.1 Commitments. Each Lender severally but not jointly agrees, on the terms and conditions set forth herein, to make a term loan (each such term loan, a "Loan") to the Company on the Funding Date in such Lender's Pro Rata Share of the Aggregate Commitment Amount or such lesser amount as may be requested by the Company. No amounts paid or prepaid with respect to any Loan may be reborrowed. 2.2 Loan Accounts. (a) The Loan made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be rebuttable presumptive evidence of the amount of the Loans made by the Lenders to the Company, and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Company hereunder to pay any greater or lesser amount owing with respect to any Loan. (b) Upon the request of any Lender made through the Administrative Agent, the Loan made by such Lender may be evidenced by a Note, instead of or in addition to loan accounts. Each such Lender shall endorse on the schedules annexed to its Note the date and amount of the Loan evidenced thereby and the amount of each payment of principal made by the Company with respect thereto. Each such Lender is irrevocably authorized by the Company to endorse its Note and each Lender's record shall be rebuttable presumptive evidence of the amount of the Loan evidenced thereby, and the interest and payments thereon; provided that the failure of a Lender to make, or an error in making, a notation thereon with respect to the applicable Loan shall not limit or otherwise affect the obligation of the Company hereunder to pay the amount owing under such Note to such Lender. 2.3 Procedure for Borrowing. (a) The funding of the Loans shall be made upon the Company's irrevocable written notice delivered to the Administrative Agent in the form of a Notice of Borrowing, which notice must be received by the Administrative Agent prior to (i) 11:30 a.m. (New York time) three Business Days prior to the requested Funding Date, with respect to any portion of the Loans is initially to be maintained as Offshore Rate Loans, and (ii) 1:30 p.m. (New York time) one Business Day prior to the requested Funding Date, with respect to any portion of the Loans which is initially to be maintained as Base Rate Loans, specifying: 20 27 (A) the amount of the applicable Borrowing, which shall be in an aggregate amount of $5,000,000 or a higher multiple of $1,000,000; (B) the requested Funding Date, which shall be a Business Day; (C) the Type of Loans comprising such Borrowing; and (D) in the case of Offshore Rate Loans, the duration of the initial Interest Period applicable thereto. (b) The Administrative Agent will promptly notify each Lender of its receipt of any Notice of Borrowing and of the amount of such Lender's Pro Rata Share of such Borrowing. (c) Each Lender will make the amount of its Pro Rata Share of the Borrowing or Borrowings on the Funding Date available to the Administrative Agent for the account of the Company at the Administrative Agent's Payment Office by 1:00 p.m. (New York time) on the Funding Date in funds immediately available to the Administrative Agent. The proceeds of all such Loans will then promptly be made available to the Company by the Administrative Agent by wire transfer in accordance with written instructions provided to the Administrative Agent by the Company of like funds as received by the Administrative Agent. 2.4 Conversion and Continuation Elections for Borrowings. (a) The Company may, upon irrevocable written notice to the Administrative Agent in accordance with subsection 2.4(b): (i) elect, as of any Business Day, in the case of Base Rate Loans, or as of the last day of the applicable Interest Period, in the case of Offshore Rate Loans, to convert such Loans (or any part thereof in an aggregate amount of $5,000,000 or a higher integral multiple of $1,000,000) into Loans of the other Type; or (ii) elect, as of the last day of the applicable Interest Period, to continue any Offshore Rate Loans having an Interest Period expiring on such day (or any part thereof in an aggregate amount of $5,000,000 or a higher integral multiple of $1,000,000) for another Interest Period; provided that if at any time the aggregate amount of Offshore Rate Loans in respect of any Borrowing is reduced, by prepayment or conversion of any part thereof, to be less than $1,000,000, such Offshore Rate Loans shall automatically convert into Base Rate Loans. 21 28 (b) The Company shall deliver a Notice of Conversion/Continuation to be received by the Administrative Agent not later than 11:30 a.m. (New York time) (i) three Business Days in advance of the Conversion/Continuation Date, if the Loans are to be converted into or continued as Offshore Rate Loans; and (ii) on the Conversion/Continuation Date, if the Loans are to be converted into Base Rate Loans, specifying: (A) the proposed Conversion/Continuation Date; (B) the aggregate amount of Loans to be converted or continued; (C) the Type of Loans resulting from the proposed conversion or continuation; and (D) in the case of conversion into or continuation of Offshore Rate Loans, the duration of the requested Interest Period. (c) If upon the expiration of any Interest Period applicable to Offshore Rate Loans, the Company has failed to select timely a new Interest Period to be applicable to such Offshore Rate Loans (or any Event of Default or Unmatured Event of Default exists and the Majority Lenders have not given the consent referred to in subsection (e) below), such Offshore Rate Loans shall automatically convert into Base Rate Loans effective as of the expiration date of such Interest Period. (d) The Administrative Agent will promptly notify each Lender of its receipt of a Notice of Conversion/Continuation, or, if no timely notice is provided by the Company, the Administrative Agent will promptly notify each Lender of the details of any automatic conversion. All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Loans with respect to which the notice was given held by each Lender. (e) Unless the Majority Lenders otherwise consent, the Company may not elect to have a Loan converted into or continued as an Offshore Rate Loan during the existence of an Event of Default or Unmatured Event of Default. (f) After giving effect to any conversion or continuation of Loans, unless the Administrative Agent shall otherwise consent, the number of Interest Periods in effect hereunder shall not exceed 4. 22 29 2.5 Mandatory Termination or Reduction of Commitments. (a) The Commitments shall be reduced to zero at the close of business on the Funding Date. (b) The Aggregate Commitment Amount shall be reduced concurrently with the receipt by the Company or any Subsidiary of the Net Cash Proceeds of the PCA IPO or of any Debt or Equity Issuance prior to or on the Funding Date, in an amount equal to such Net Cash Proceeds (rounded upward, if necessary, to an integral multiple of $1,000,000). Once reduced in accordance with this Section, the Aggregate Commitment Amount may not be increased. Any reduction of the Aggregate Commitment Amount shall reduce the amount of the Commitment of each Lender according to its Pro Rata Share. 2.6 Voluntary Termination or Reduction of Commitments. The Company may, upon not less than one Business Day's prior notice to the Administrative Agent, terminate the Commitments, or permanently reduce the Aggregate Commitment Amount by a minimum amount of $5,000,000 or a higher integral multiple of $1,000,000. Once terminated or reduced in accordance with this Section, the Commitments may not be reinstated or increased. Any reduction of the Aggregate Commitment Amount shall reduce the amount of the Commitment of each Lender according to its Pro Rata Share. 2.7 Mandatory Prepayments. (a) Concurrently with the receipt by the Company or any Subsidiary of the Net Cash Proceeds of the PCA IPO or of any Debt or Equity Issuance after the Funding Date, the Company shall prepay outstanding principal Loans in an amount equal to such Net Cash Proceeds (rounded upward, if necessary, to an integral multiple of $1,000,000). (b) The Company shall give written notice to the Administrative Agent of any mandatory prepayment under Section 2.7(a) at least one (1) Business Day prior to the date of such prepayment. 2.8 Optional Prepayments. (a) Subject to the proviso to subsection 2.4(a), the Company may, from time to time, upon irrevocable notice to the Administrative Agent, which notice must be received by the Administrative Agent prior to 11:30 a.m. New York time (i) three Business Days prior to the date of prepayment, in the case of Offshore Rate Loans, and (ii) on the date of prepayment, in the case of Base Rate Loans, ratably prepay Loans in whole or in part, in an aggregate amount of $5,000,000 or a higher integral multiple of $1,000,000. Such notice of prepayment shall specify the date and amount of such prepayment and the Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of any such notice and of such Lender's Pro Rata Share of such prepayment. If such notice is given by the Company, the Company shall make 23 30 such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, together with, in the case of Offshore Rate Loans, accrued interest to such date on the amount prepaid and any amounts required pursuant to Section 3.4. (b) There shall be no premium or penalty imposed upon or incurred by the Company in connection with the reduction of a Commitment, voluntary termination, or prepayment under Section 2.5 or 2.6(a)(but any prepayment shall be subject to Section 3.4). 2.9 Repayment. The Company shall repay all Loans on May 3, 2001. 2.10 Interest. (a) Each Loan shall bear interest on the outstanding principal amount thereof at a rate per annum equal to (i) with respect to any portion thereof maintained as an Offshore Rate Loan, the Offshore Rate for each applicable Interest Period plus the Applicable Margin, and (ii) with respect to any portion thereof maintained as a Base Rate Loan, the Base Rate (subject to the Company's right to convert to the other Type of Loan under Section 2.4). (b) Interest on each Loan shall be paid in arrears on each Interest Payment Date. Interest also shall be paid on the date of any conversion of Offshore Rate Loans under Section 2.4 and prepayment of Offshore Rate Loans under Sections 2.7 and 2.8, in each case for the portion of the Loans so converted or prepaid. (c) Notwithstanding the foregoing provisions of this Section, upon notice to the Company from the Administrative Agent (acting at the request or with the consent of the Majority Lenders) during the existence of any Event of Default, and for so long as such Event of Default continues, the Company shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law) on the principal amount of all outstanding Loans and, to the extent permitted by applicable law, on any other amount payable hereunder or under any other Loan Document, at a rate per annum which is determined by adding 2% per annum to the rate otherwise applicable thereto pursuant to the terms hereof or such other Loan Document (or, if no such rate is specified, the Base Rate). All such interest shall be payable on demand. (d) Anything herein to the contrary notwithstanding, the obligations of the Company to any Lender hereunder shall be subject to the limitation that payments of interest shall not be required for any period for which interest is computed hereunder, to the extent (but only to the extent) that contracting for or 24 31 receiving such payment by such Lender would be contrary to the provisions of any law applicable to such Lender limiting the highest rate of interest that may be lawfully contracted for, charged or received by such Lender, and in such event the Company shall pay such Lender interest at the highest rate permitted by applicable law. 2.11 Fees. The Company agrees to pay to the Administrative Agent and BAS such fees at such times and in such amounts as are mutually agreed to from time to time by the Company, the Administrative Agent and BAS. 2.12 Computation of Fees and Interest. (a) All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America's "reference rate", shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of interest and fees shall be made on the basis of a 360-day year and actual days elapsed. Interest and fees shall accrue during each period during which such interest or such fees are computed from the first day thereof to the last day thereof. (b) Each determination of an interest rate by the Administrative Agent shall be conclusive and binding on the Company and the Lenders in the absence of manifest error. The Administrative Agent will, at the request of the Company or any Lender, deliver to the Company or such Lender, as the case may be, a statement showing the quotations used by the Administrative Agent in determining any interest rate and the resulting interest rate. 2.13 Payments by the Company. (a) All payments to be made by the Company shall be made without set-off, recoupment or counterclaim. Except as otherwise expressly provided herein, all payments by the Company shall be made to the Administrative Agent for the account of the Lenders at the Administrative Agent's Payment Office, and shall be made in Dollars and in immediately available funds, no later than 2:00 p.m. (New York time) on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as expressly provided herein) of such payment in like funds as received. Any payment received by the Administrative Agent later than 2:00 p.m. (New York time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue. (b) Whenever any payment is due on a day other than a Business Day, such payment shall be made on the following Business Day (unless, in the case of a payment with respect to an Offshore Rate Loan, the following Business Day is in another calendar month, in which case such payment shall be made on the 25 32 preceding Business Day), and such extension or reduction of time shall in such case be included in the computation of interest or fees, as the case may be. (c) Unless the Administrative Agent receives notice from the Company prior to the date on which any payment is due to the Lenders that the Company will not make such payment in full as and when required, the Administrative Agent may assume that the Company has made such payment in full to the Administrative Agent on such date in immediately available funds and the Administrative Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the Company has not made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent on demand such amount distributed to such Lender, together with interest thereon at the Federal Funds Rate for each day from the date such amount is distributed to such Lender until the date repaid. 2.14 Sharing of Payments, Etc. If, other than as expressly provided elsewhere herein, any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of principal of or interest on any Loan, or any other amount payable hereunder, in excess of its Pro Rata Share of payments and other recoveries received by all Lenders, such Lender shall immediately (i) notify the Administrative Agent of such fact and (ii) purchase from the other Lenders such participations in the Loans made by (or other Obligations owed to) them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery pro rata with each of them so that each Lender has received its Pro Rata Share of all such payments and other recoveries; provided that if all or any portion of such excess payment or other recovery is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender's ratable share (according to the proportion of (i) the amount of such paying Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Company agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 10.10) with respect to such participation as fully as if such Lender were the direct creditor of the Company in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations 26 33 purchased under this Section and will in each case notify the Lenders following any such purchases or repayments. If, other than as expressly provided elsewhere herein, any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of principal of or interest on its Loan, or any other amount payable hereunder, in excess of the share of payments and other recoveries such Lender would have received if such payment or other recovery had been distributed pursuant to the provisions of subsection 2.15(a) or (b) (whichever is applicable at the time of such payment or other recovery), such Lender shall immediately (i) notify the Administrative Agent of such fact and (ii) purchase from the other Lenders such participations in the Loans made by (or other Obligations owed to) them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery pro rata with each of them in accordance with the order of payments set forth in subsection 2.15(a) or (b), as the case may be; provided that if all or any portion of such excess payment or other recovery is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender's ratable share (according to the proportion of (i) the amount of such paying Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Company agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 10.10) with respect to such participation as fully as if such Lender were the direct creditor of the Company in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Lenders following any such purchases or repayments. ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY 3.1 Taxes. (a) Any and all payments by the Company to each Lender or the Administrative Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Taxes. In addition, the Company shall pay all Other Taxes. 27 34 (b) If the Company shall be required by law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum payable hereunder to any Lender or the Administrative Agent, then: (i) the sum payable shall be increased as necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section), such Lender or the Administrative Agent, as the case may be, receives and retains an amount equal to the sum it would have received and retained had no such deductions or withholdings been made; (ii) the Company shall make such deductions and withholdings; and (iii) the Company shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law. (c) The Company agrees to indemnify and hold harmless each Lender and the Administrative Agent for the full amount of Taxes and Other Taxes in the amount that such Lender specifies as necessary to preserve the after-tax yield such Lender would have received if such Taxes or Other Taxes had not been imposed, and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days after the date such Lender or the Administrative Agent makes written demand therefor. (d) Within 30 days after the date of any payment by the Company of any Taxes or Other Taxes, the Company shall furnish each applicable Lender and the Administrative Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to such Lender and the Administrative Agent. (e) Notwithstanding the foregoing provisions of this Section 3.1, (i) if any Lender fails to notify the Company of any event or circumstance which will entitle such Lender to compensation pursuant to this Section 3.1 within 90 days after such Lender obtains knowledge of such event or circumstance, then such Lender shall not be entitled to compensation from the Company for any amount arising prior to the date which is 90 days before the date on which such Lender notifies the Company of such event or circumstance; and (ii) the Company shall not be required to pay an additional amount to, or to indemnify, any Lender pursuant to this Section 3.1 to the extent that (x) the 28 35 obligation to withhold or pay such amount existed on the Initial Date (as defined below) or (y) the obligation to withhold or pay such amount would not have arisen but for the failure of such Lender to comply with the provisions of Section 9.10 of this Agreement. For purposes of clause (ii) of the foregoing sentence "Initial Date" means (A) in the case of any Lender that is a signatory hereto, the date of this Agreement, (B) in the case of any Person which subsequently becomes a Lender hereunder, the date of the applicable Assignment and Acceptance, and (C) in the case of any Participant, the date on which it becomes a Participant. 3.2 Illegality. (a) If any Lender reasonably determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation by a Governmental Authority or the administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make Offshore Rate Loans, then, on notice thereof by such Lender to the Company through the Administrative Agent, any obligation of such Lender to make Offshore Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Company that the circumstances giving rise to such determination no longer exist. (b) If a Lender reasonably determines that it is unlawful to maintain any Offshore Rate Loan, the Company shall, upon its receipt of notice of such fact and demand from such Lender (with a copy to the Administrative Agent), convert such Offshore Rate Loan of such Lender (and concurrently pay all interest accrued thereon and amounts required under Section 3.4) to a Base Rate Loan, either on the last day of the Interest Period thereof, if such Lender may lawfully continue to maintain such Offshore Rate Loan to such day, or immediately, if such Lender may not lawfully continue to maintain such Offshore Rate Loan. (c) If the obligation of any Lender to make or maintain Offshore Rate Loans has been so terminated or suspended, all Loans which would otherwise be made or maintained by such Lender as Offshore Rate Loans shall be instead Base Rate Loans. 3.3 Increased Costs and Reduction of Return. (a) If any Lender reasonably determines that, due to either (i) the introduction of or any change (other than any change by way of imposition of or increase in reserve requirements included in the calculation of the Offshore Rate) after the date hereof in or in the interpretation of any law or regulation by a Governmental Authority or (ii) compliance by such Lender with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) adopted, issued or 29 36 delivered after the date hereof, there shall be any increase in the cost to such Lender (excluding any Taxes, Other Taxes or taxes imposed on or measured by the net income of such Lender, and franchise taxes and similar taxes) of agreeing to make or making, funding or maintaining any Offshore Rate Loan, then the Company shall be liable for, and shall from time to time, within 15 days after demand (with a copy of such demand to be sent to the Administrative Agent), pay to the Administrative Agent for the account of such Lender, additional amounts as are sufficient to compensate such Lender for such increased cost. (b) If any Lender shall have reasonably determined that (i) the introduction after the date hereof of any Capital Adequacy Regulation, (ii) any change after the date hereof in any Capital Adequacy Regulation, (iii) any change after the date hereof in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by such Lender (or its Lending Office) or any corporation controlling such Lender with any Capital Adequacy Regulation (excluding any Capital Adequacy Regulation as in effect on the date hereof) affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy and such Lender's desired return on capital) reasonably determines that the amount of such capital is increased as a consequence of its Commitment, Loans or obligations under this Agreement, then, upon demand of such Lender to the Company through the Administrative Agent, the Company shall pay to such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender for such increase. (c) Notwithstanding the foregoing provisions of this Section 3.3, if any Lender fails to notify the Company in writing of any event or circumstance which will entitle such Lender to compensation pursuant to this Section 3.3 within 90 days after such Lender obtains knowledge of such event or circumstance, then such Lender shall not be entitled to compensation from the Company for any amount arising prior to the date which is 90 days before the date on which such Lender notifies the Company of such event or circumstance. 3.4 Funding Losses. The Company shall reimburse each Lender and hold each Lender harmless from any loss or expense which the Lender may sustain or incur as a consequence of: (a) the failure of the Company to borrow, continue or convert a Loan after the Company has given (or is deemed to have 30 37 given) a Notice of Borrowing or a Notice of Conversion/Continuation; (b) the failure of the Company to make any prepayment in accordance with any notice delivered under Section 2.7 or 2.8; (c) the prepayment (including after acceleration thereof) of an Offshore Rate Loan on a day that is not the last day of the relevant Interest Period; or (d) the automatic conversion under subsection 2.4(a) of any Offshore Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant Interest Period; including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Offshore Rate Loans or from fees payable to terminate the deposits from which such funds were obtained (but excluding any loss of margin or profit arising from any action or inaction of the nature described in paragraphs (a) through (d) of this Section 3.4). For purposes of calculating amounts payable by the Company to the Lenders under this Section and under subsection 3.3(a), each Offshore Rate Loan of a Lender (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at the LIBOR used in determining the Offshore Rate for such Offshore Rate Loan by a matching deposit or other borrowing in the interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Offshore Rate Loan is in fact so funded. 3.5 Inability to Determine Rates. If (a) the Administrative Agent determines that for any reason adequate and reasonable means do not exist for determining the Offshore Rate for any requested Interest Period with respect to a proposed Offshore Rate Loan, or (b) the Majority Lenders determine that the Offshore Rate applicable pursuant to subsection 2.10(a) for any requested Interest Period with respect to a proposed Offshore Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Company and each Lender. Thereafter, the obligation of the Lenders to make or maintain Offshore Rate Loans hereunder shall be suspended until the Administrative Agent (upon the instruction of the Majority Lenders in the case of clause (b)) revokes such notice in writing. Upon receipt of such notice, the Company may revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by it. If the Company does not revoke such Notice, the Lenders shall make, convert or continue the Loans, as proposed by the Company, in the amount specified in the applicable notice submitted by the Company, but 31 38 such Loans shall be made, converted or continued as Base Rate Loans instead of Offshore Rate Loans. 3.6 Certificates of Lenders. Any Lender claiming reimbursement or compensation under this Article III shall deliver to the Company (with a copy to the Administrative Agent) a certificate setting forth in reasonable detail the amount payable to such Lender hereunder and the manner in which such amount has been calculated, and such certificate shall be conclusive and binding on the Company in the absence of manifest error. 3.7 Mitigation. Each Lender shall promptly notify the Company and the Administrative Agent of any event of which it has knowledge which will result in, and will use reasonable commercial efforts available to it (and not, in such Lender's good faith judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, (i) any obligation of the Company to pay any amount pursuant to Section 3.1 or 3.3 or (ii) the occurrence of any circumstance of the nature described in Section 3.2 or 3.5. Without limiting the foregoing, each Lender will designate a different Lending Office if such designation will avoid (or reduce the cost to the Company of) any event described in clause (i) or (ii) of the preceding sentence and such designation will not, in such Lender's good faith judgment, be otherwise disadvantageous to such Lender. 3.8 Substitution of Lenders. Upon the receipt by the Company from any Lender of a claim for compensation under Section 3.1 or 3.3 or a notice of the type described in Section 3.2, the Company may: (i) designate a replacement bank or financial institution satisfactory to the Company (a "Replacement Lender") to acquire and assume all or a ratable part of all of such affected Lender's Loans and Commitment; and/or (ii) request one or more of the other Lenders to acquire and assume all or a ratable part of all of such affected Lender's Loans (it being understood that no Lender shall be obligated to comply with any such request). Any designation of a Replacement Lender under clause (i) shall be subject to the prior written consent of the Administrative Agent (which consent shall not be unreasonably withheld). 3.9 Survival. The agreements and obligations of the Company in this Article III shall survive the termination of this Agreement and the payment of all other Obligations. 32 39 ARTICLE IV CONDITIONS PRECEDENT 4.1 Conditions to Effectiveness. This Agreement shall become effective on the date (the "Signing Date") on which the Administrative Agent shall have received (i) this Agreement executed by each party hereto and (ii) evidence of payment by the Company of all accrued and unpaid fees, costs and expenses to the extent then due and payable hereunder on the Signing Date, together with Attorney Costs of Bank of America to the extent invoiced prior to the Signing Date, plus such additional amounts of Attorney Costs as shall constitute Bank of America's reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude final settling of accounts between the Company and Bank of America, which shall be made based upon actual Attorney Costs), including any such costs, fees, costs and expenses arising under or referenced in Sections 2.11 and 10.4. The Administrative Agent shall determine when the Signing Date has occurred and will promptly notify the Company and the Lenders thereof in writing. 4.2 Conditions to the Borrowing. The obligation of each Lender to make the Loan to be made by it is subject to the satisfaction of the following conditions precedent on the date of the funding of such Loan (the "Funding Date"), which shall not be later than November 30, 1999: (a) Signing Date. The Signing Date shall have occurred. (b) Notes; Corporate Documents; Fees. The Administrative Agent shall have received all of the following, in form and substance satisfactory to the Administrative Agent and each Lender, and (except for the Notes) in sufficient copies for each Lender: (i) Notes. The Notes executed by each party thereto. (ii) Resolutions; Incumbency. (A) Copies of the resolutions of the board of directors of the Company authorizing the execution and delivery of the Loan Documents and the consummation of the transactions contemplated hereby, certified as of the Funding Date by the Secretary or an Assistant Secretary of such Person; and 33 40 (B) a certificate of the Secretary or Assistant Secretary of the Company certifying the names and true signatures of the officers, employees or authorized agents of the Company authorized to execute and deliver the Loan Documents and to deliver Notices of Borrowing, Notices of Conversion/Continuation, Compliance Certificates and similar documents. (iii) Organization Documents. The articles or certificate of incorporation and the bylaws of the Company as in effect on the Funding Date, certified by the Secretary or Assistant Secretary of the Company as of the Funding Date. (iv) Tax Ruling or Opinion. A tax ruling from the IRS or an opinion of counsel to the effect that the Spin-Off will be free of federal income taxes payable by the Company. (c) Notice. The Administrative Agent shall have received one or more Notices of Borrowing pursuant to Section 2.3. (d) Consummation of Spin-Off. The Administrative Agent shall have received a certificate signed by a Responsible Officer of the Company, dated as of the Funding Date, stating that, to the best of such officer's knowledge after due inquiry, the Spin-Off has been consummated (or shall be consummated substantially concurrently with the funding hereunder) on substantially the terms set forth in the Form 10 and the Company's filing on Form S-4, without giving effect to any material amendment thereto (other than any amendment prior to the Funding Date or any amendment which does not affect any member of the Tenneco Packaging Group), unless approved in writing by the Required Lenders, which approval shall not be unreasonably withheld or delayed. (e) Consents and Approvals. All approvals, consents, exemptions, authorizations and actions by, or notices to, or filings with, any Governmental Authority or other third party that are necessary or required prior to and in connection with the Spin-Off or the execution, delivery and performance by, or enforcement against, the Company of the Agreement or any other Loan Document, shall have been obtained or made, as the case may be, and are in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the Spin-Off or the financing thereof or the other transactions contemplated by the Agreement and the Loan Documents. 34 41 (f) Payments of Fees and Expenses. Bank of America and BAS shall have received evidence of payment by the Company of all accrued and unpaid fees, costs and expenses to the extent then due and payable hereunder on the Funding Date, together with Attorney Costs of Bank of America to the extent invoiced prior to the Funding Date, plus such additional amounts of Attorney Costs as shall constitute Bank of America's reasonable estimate of Attorney Costs incurred or to be incurred by it through the Funding Date proceedings (provided that such estimate shall not thereafter preclude final settling of accounts between the Company and Bank of America, which shall be made based upon actual Attorney Costs), including any such, fees, costs and expenses arising under or referenced in Sections 2.11 and 10.4. (g) Legal Opinions. An opinion of Jenner & Block, counsel to the Company, substantially in the form of Exhibit D. (h) Certificate. A certificate signed by a Responsible Officer, dated as of the Funding Date, stating that to the best of his knowledge after due inquiry: (i) the representations and warranties contained in Article V are true and correct on and as of such date, as though made on and as of such date; (ii) no Event of Default or Unmatured Event of Default exists or would result from the borrowing on the Funding Date; and (iii) since June 30, 1999, no event or circumstance has occurred that has resulted or could reasonably be expected to result in a Material Adverse Effect. (i) Other Documents. Such other approvals, documents or materials as the Administrative Agent or any Lender may reasonably request. ARTICLE V REPRESENTATIONS AND WARRANTIES The Company represents and warrants (it being understood that representations and warranties made with respect to the Company and its Subsidiaries shall apply to the Tenneco Packaging Group prior to the Funding Date) to the Administrative Agent and each Lender that: 5.1 Corporate Existence and Power. The Company and each of its Subsidiaries: 35 42 (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (b) has the power and authority and all governmental licenses, authorizations, consents and approvals to own its assets, to carry on its business and to execute, deliver and perform its obligations under the Loan Documents to which it is a party; (c) is duly qualified to do business in each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification; and (d) is in compliance with all Requirements of Law; except, in each case referred to in clause (c) or clause (d), to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect. 5.2 Corporate Authorization; No Contravention. The execution, delivery and performance by the Company of each Loan Document to which the Company is party have been duly authorized by all necessary corporate action, and do not and will not: (a) contravene the terms of any of the Company's Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any material Contractual Obligation to which the Company or any of its Subsidiaries is a party or any order, injunction, writ or decree of any Governmental Authority to which the Company or any of its Subsidiaries or any of its property is subject; or (c) violate any Requirement of Law applicable to the Company or any Subsidiary. 5.3 Governmental Authorization. Except those required in connection with the Spin-Off, no approval, consent, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority (other than any of the foregoing which has been obtained or made and is in full force and effect) is necessary or required in connection with the execution, delivery or performance by the Company of the Agreement or any other Loan Document. 5.4 Binding Effect. This Agreement and each other Loan Document constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as enforceability may be limited 36 43 by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. 5.5 Litigation. Except as disclosed in a memorandum delivered to the Lenders prior to the Signing Date, there are no actions, suits, proceedings, claims, disputes pending or, to the Knowledge of the Company, threatened, at law, in equity, in arbitration or before any Governmental Authority, against the Company or any Subsidiary or any of their respective properties which: (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby or thereby; or (b) if determined adversely to the Company or its Subsidiaries, could in the reasonable judgment of the Company be expected to have a Material Adverse Effect. No injunction, writ, temporary restraining order or other order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Loan Document, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided. 5.6 No Default. No Event of Default or Unmatured Event of Default exists or would result from the incurring of any Obligations by the Company. As of the Signing Date, neither the Company nor any Subsidiary is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such defaults, could reasonably be expected to have a Material Adverse Effect. 5.7 ERISA Compliance. (a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law. Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS, and to the best knowledge of the Company, nothing has occurred which would cause the loss of such qualification. The Company and each ERISA Affiliate has made all required contributions to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan. (b) There are no pending or, to the best knowledge of Company, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. 37 44 (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no contribution failure has occurred with respect to a Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; (iii) no Pension Plan has any material Unfunded Pension Liability; (iv) neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any material liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (v) neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any material liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (vi) neither the Company nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA. 5.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans will be used solely for the purposes set forth in and permitted by Section 6.12 and Section 7.7. Neither the Company nor any Subsidiary is generally engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock. 5.9 Title to Properties. The Company and each Subsidiary (other than foreign Subsidiaries) have (or, in the case of property that will be transferred to the Tenneco Packaging Group in connection with the Spin-Off, after such transfer will have) good record title in fee simple to all real property (other than leasehold property) necessary to conduct their respective businesses in the ordinary course, except for (i) Permitted Liens, and (ii) such defects in title as could not, individually or in the aggregate, have a Material Adverse Effect. As of the Signing Date, the property of the Company and its Subsidiaries is subject to no Liens, other than Permitted Liens. 5.10 Taxes. The Company and its Subsidiaries have filed all Federal and other material tax returns and reports which are required to be filed, and have paid all Federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against the Company or any Subsidiary that would, if made, have a Material Adverse Effect. 5.11 Financial Condition. (a)(1) The combined financial statements of the Company and its Subsidiaries dated as of December 31, 1998, and the related consolidated statements of income or operations, shareholders' equity and cash flows for the 38 45 fiscal year ended on that date reported on by Arthur Andersen LLP and set forth in the Form 10 and the Company's filings on Form S- 4 (as referenced in the definition of Spin-Off), and (2) the interim combined financial statements of the Company and its Subsidiaries dated June 30, 1999, and the related consolidated statements of income or operations, shareholders' equity and cash flows for the fiscal quarter ended on that date reported on by Arthur Andersen LLP and set forth in the Form 10 and the Company's filings on Form S-4 (as referenced in the definition of Spin-Off): (i) were prepared in accordance with GAAP consistently applied for the periods covered thereby, except as otherwise expressly noted therein (subject, in the case of the unaudited interim statements, to ordinary, good faith year-end audit adjustments); and (ii) fairly present (subject, in the case of the unaudited interim statements, to ordinary, good faith year-end audit adjustments) the financial condition of the Company and its Subsidiaries as of the dates thereof and the results of operations for the periods covered thereby. (b) Since June 30, 1999, there has been no Material Adverse Effect. 5.12 Environmental Matters. The Company conducts in the ordinary course of business a review of the effect of existing Environmental Laws and existing Environmental Claims on its business, operations and properties, and as a result thereof the Company has reasonably concluded that, except as specifically disclosed in Schedule 5.12, such Environmental Laws and Environmental Claims are unlikely to have, individually or in the aggregate, a Material Adverse Effect. 5.13 Regulated Entities. None of the Company, any Person controlling the Company, or any Subsidiary is an "Investment Company" within the meaning of the Investment Company Act of 1940. The Company is not subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, any state public utilities code, or any other Federal or state statute or regulation limiting its ability to incur Indebtedness. 5.14 No Burdensome Restrictions. Neither the Company nor any Subsidiary is bound by, or subject to any restriction in, any Organization Document or Requirement of Law, which could reasonably be expected to have a Material Adverse Effect. 5.15 Copyrights, Patents, Trademarks and Licenses, etc. The Company or its Subsidiaries own or are licensed or otherwise have the right to use all of the material patents, trademarks, 39 46 service marks, trade names, copyrights, contractual franchises, authorizations and other rights that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person, except to the extent failure to own, license or otherwise have the right to use any such item, or any such conflict, could not reasonably be expected to have a Material Adverse Effect. The Company has not received any written notice that any slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Company or any Subsidiary, and which is material to the business or operations of the Company and its Subsidiaries, infringes upon any rights held by any other Person (excluding infringements which could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect). 5.16 Subsidiaries. As of the Signing Date, the Company has no Subsidiaries other than those specifically disclosed in part (a) of Schedule 5.16 and has no equity investments in any other corporation or entity other than those specifically disclosed in part (b) of Schedule 5.16. As of the Funding Date, the additional Subsidiaries disclosed on part (c) of Schedule 5.16 also will become Subsidiaries of the Company in connection with the Spin-Off, and therefore are part of the Tenneco Packaging Group. 5.17 Insurance. The properties of the Company and its Subsidiaries are insured with financially sound and reputable insurance companies (or pursuant to a self-insurance program) in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Company or such Subsidiary operates. 5.18 Year 2000 Problem. The Company and its Subsidiaries have reviewed the areas within their business and operations which could be adversely affected by, and have developed programs to address on a timely basis, the "Year 2000 Problem" (that is, the risk that computer applications used by the Company may be unable to recognize and perform properly date-sensitive functions involving certain dates prior to and any date after December 31, 1999). Based on such review and programs, the Company reasonably believes that the "Year 2000 Problem" will not result in a Material Adverse Effect. 5.19 Full Disclosure. The representations and warranties made by the Company and its Subsidiaries in the Loan Documents as of the date such representations and warranties are made or deemed made, and the statements contained in any exhibit, report, statement or certificate furnished in writing by or on behalf of the Company or any Subsidiary in connection with the Loan 40 47 Documents, taken as a whole, do not contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make the statements made therein, taken as a whole and in light of the circumstances under which they are made, not misleading in any material respect as of the time when made or delivered. 5.20 Solvency, etc. On the Funding Date, and immediately prior to and after giving effect to each Borrowing hereunder and the use of the proceeds thereof, (a) the Company's assets will exceed its liabilities and (b) the Company will be solvent, will be able to pay its debts as they mature, will own property with fair saleable value greater than the amount required to pay its debts and will have capital sufficient to carry on its business as then constituted. 5.21 Labor Relations. Except as disclosed in Schedule 5.21, there are no strikes, lockouts or other work stoppages against the Company or any of its Subsidiaries, or, to the Knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, and no significant unfair labor practice complaint is pending against the Company or any of its Subsidiaries or, to the best knowledge of the Company, threatened against any of them before any Governmental Authority that, in each case, is likely to have a Material Adverse Effect. ARTICLE VI AFFIRMATIVE COVENANTS Beginning on the Funding Date and continuing so long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied, unless the Majority Lenders waive compliance in writing: 6.1 Financial Statements. The Company shall deliver to each Lender and the Administrative Agent, in form and detail satisfactory to the Lenders and the Administrative Agent (it being understood that for purposes hereof, the form and detail required by the SEC for annual and quarterly reports filed pursuant to the Exchange Act shall be deemed satisfactory): (a) as soon as available, but not later than 90 days after the end of each fiscal year, a copy of the audited consolidated balance sheet of the Company and its Subsidiaries as at the end of such year and the related consolidated statements of income or operations, shareholders' equity and cash flows for such year, setting forth in each case in comparative form the figures for the previous fiscal year, and accompanied by the opinion of Arthur Andersen LLC or another nationally-recognized 41 48 independent public accounting firm ("Independent Auditor"), which opinion (i) shall state that such consolidated financial statements present fairly the Company's consolidated financial position for the periods indicated in conformity with GAAP and (ii) shall not be qualified or limited because of a restricted or limited examination by the Independent Auditor of any material portion of the Company's or any Subsidiary's records; and (b) as soon as available, but not later than 50 days after the end of each of the first three fiscal quarters of each fiscal year (commencing with the fiscal quarter ending September 30, 1999), a copy of the unaudited consolidated balance sheet of the Company and its Subsidiaries as of the end of such quarter and the related consolidated statements of income, shareholders' equity and cash flows for the period commencing on the first day and ending on the last day of such quarter, and certified by a Responsible Officer as fairly presenting, in accordance with GAAP (subject to ordinary, good faith year-end audit adjustments), the financial position and the results of operations of the Company and its Subsidiaries as of such date and for such period. 6.2 Certificates; Other Information. The Company shall furnish to each Lender and the Administrative Agent: (a) concurrently with the delivery of the financial statements referred to in subsections 6.1(a) and (b), a Compliance Certificate executed by a Responsible Officer; (b) promptly after their becoming available, copies of all financial statements and reports that the Company sends to its shareholders, and copies of all financial statements and regular, periodic or special reports (including Forms 10K, 10Q and 8K) that the Company or any Subsidiary may make to, or file with, the SEC; (c) promptly after their becoming available, any management letter issued by the Company's Independent Auditor regarding the "Year 2000" exposure or programs of the Company and its Subsidiaries; and (d) promptly, such additional information regarding the business, financial or corporate affairs of the Company or any Subsidiary as the Administrative Agent, at the request of any Lender, may from time to time reasonably request. 6.3 Notices. The Company shall promptly (or, in the case of any event described in clause (c)(ii) below, not less than 10 days prior to the occurrence of such event) notify the Administrative Agent and each Lender: 42 49 (a) of the occurrence of any Event of Default or Unmatured Event of Default known to the Company; (b) of any of the following matters that has resulted or is reasonably expected to result in a Material Adverse Effect: (i) breach or non-performance of, or any default under, a Contractual Obligation of the Company or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Company or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material ruling, order or judgment in, any litigation or proceeding affecting the Company or any Subsidiary is a party, including pursuant to any applicable Environmental Laws; (c) of the occurrence of any of the following events known to the Company which affect the Company or any ERISA Affiliate, and deliver to the Administrative Agent and each Lender a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to the Company or any ERISA Affiliate with respect to such event: (i) an ERISA Event; (ii) a contribution failure with respect to a Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; (iii) the adoption of, or the commencement of contributions to, any Pension Plan by the Company or any ERISA Affiliate that, in either case, requires material contributions; or (iv) the adoption of any amendment to a Pension Plan if such amendment results in a material increase in contributions or Unfunded Pension Liability; (d) of any material change in accounting policies or financial reporting practices by the Company and its consolidated Subsidiaries; and (e) of any change in the Moody's Rating or the S&P Rating. Each notice under this Section shall be accompanied by a written statement by a Responsible Officer setting forth details of the occurrence referred to therein, and stating what action the Company or any affected Subsidiary proposes to take with respect thereto. 43 50 6.4 Preservation of Corporate Existence, Etc. The Company shall, and shall cause each Subsidiary to (provided that nothing in this Section 6.4 shall prevent the voluntary liquidation, dissolution or winding up, not under any bankruptcy or insolvency law, of any Subsidiary so long as no Event of Default exists and no Event of Default or Unmatured Event of Default will result therefrom): (a) preserve and maintain in full force and effect its existence and good standing under the laws of its jurisdiction of organization; (b) preserve and maintain in full force and effect all governmental rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business (except in connection with transactions and sales of assets permitted by Section 7.4); and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect; provided, however, that the Company shall have the right to assign to an Affiliate of Tenneco, or not preserve or renew, certain trademarks of Tenneco that are currently owned by the Company or any Subsidiary, but which are not used by the Company or such Subsidiary. 6.5 Maintenance of Property. The Company shall, and shall cause each Subsidiary to, maintain and preserve all its property which is used or useful in its business in good working order and condition, ordinary wear and tear excepted, except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect. 6.6 Insurance. The Company shall, and shall cause each Subsidiary to, maintain, with financially sound and reputable independent insurers (or pursuant to a self-insurance program), insurance with respect to its properties and business in such amounts, with such deductibles, and covering such risks as are customarily carried under similar circumstances by such other Persons. 6.7 Payment of Obligations. The Company shall, and shall cause each Subsidiary to, pay and discharge, as the same become due and payable: (a) all material tax liabilities, assessments and governmental charges or levies upon it or its properties or assets and (b) all material claims which, if unpaid, would by law become a Lien upon its property, unless, in each case, the same are being contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary. 44 51 6.8 Compliance with Laws. The Company shall, and shall cause each Subsidiary to, comply with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business (including the Federal Fair Labor Standards Act) the non-compliance with which might have a Material Adverse Effect. 6.9 Compliance with ERISA. The Company shall, and shall cause each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law; (b) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; and (c) make all required contributions to any Plan subject to Section 412 of the Code. 6.10 Inspection of Property and Books and Records. The Company shall, and shall cause each Subsidiary to, maintain proper books of record and account, in which full, true and correct entries (sufficient to permit the preparation of consolidated financial statements in conformity with GAAP) shall be made of all financial transactions and matters involving the assets and business of the Company and such Subsidiary. The Company shall permit, and shall cause each Subsidiary to permit, the Administrative Agent, any Lender or their respective representatives, subject to such limitations as the Company may reasonably impose to ensure compliance with any applicable legal or contractual restrictions, to visit and inspect the properties of the Company or any Subsidiary, to examine their respective corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss the affairs, finances and accounts of the Company or any Subsidiary with their respective officers at such reasonable times during normal business hours as may be reasonably desired, upon reasonable advance notice to the Company; provided that when an Event of Default exists the Administrative Agent or any Lender may do any of the foregoing at any time during normal business hours and without advance notice. 6.11 Environmental Laws. The Company shall, and shall cause each Subsidiary to, conduct its operations and keep and maintain its property in compliance with all Environmental Laws, except to the extent any failure to be compliance would not, individually or in the aggregate with all other such failures, reasonably be expected to result in a Material Adverse Effect. 6.12 Use of Proceeds. The Company shall use the proceeds of the Loans for refinancing existing indebtedness of Tenneco or its Subsidiaries (including the Company) and for working capital and other general corporate purposes (including the payment of dividends concurrently with the Spin-Off as set forth in the Form 10) not in contravention of any Requirement of Law or of any Loan Document; provided that the Company shall not use the proceeds of 45 52 any Loan to make any Acquisition if the Board of Directors of the Person to be acquired has not approved such Acquisition. 6.13 Change in Business. The Company and its Subsidiaries taken as a whole shall continue the primary businesses in which they are engaged on the Funding Date and lines of business reasonably related thereto. ARTICLE VII NEGATIVE COVENANTS Beginning on the Funding Date and continuing so long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied, unless the Majority Lenders waive compliance in writing: 7.1 Financial Condition Covenants. (a) Minimum Interest Coverage Ratio. The Company shall not permit, as of the last day of any fiscal quarter (beginning with the first fiscal quarter ending after the Funding Date), its Interest Coverage Ratio to be less than (i) for each Computation Period ending prior to October 1, 2000, 3.0 to 1 and (ii) for each Computation Period ending thereafter, 3.5 to 1. (b) Maximum Total Debt to EBITDA Ratio. The Company shall not permit the Total Debt to EBITDA Ratio to be greater than (i) 3.85 at any time prior to the earlier of (A) April 1, 2000 and (B) the consummation of the PCA IPO, and (ii) 3.5 to 1 at any time thereafter. 7.2 Limitation on Liens. The Company shall not, and shall not suffer or permit any Subsidiary to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its property, whether now owned or hereafter acquired, other than the following ("Permitted Liens"): (a) any Lien existing on the Funding Date and set forth in Schedule 7.2, and any extension, renewal or replacement of any such Lien so long as the principal amount secured thereby is not increased (other than an increase resulting solely from a change in applicable rates of exchange between U.S. Dollars, on the one hand, and any other currency in which such principal amount is denominated, on the other hand) and the scope of the property subject to such Lien is not extended; (b) Liens imposed by law for taxes, assessments or charges of any Governmental Authority for claims not yet due, or to the extent that non-payment thereof is permitted by Section 46 53 6.7, provided that no notice of Lien has been filed or recorded under the Code; (c) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed by law or created in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith by appropriate proceedings; (d) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation; (e) Liens on the property of the Company or any Subsidiary securing (i) the non-delinquent performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, (ii) surety bonds (excluding appeal bonds and other bonds posted in connection with court proceedings or judgments) and (iii) other non-delinquent obligations of a like nature in each case incurred in the ordinary course of business, provided all such Liens in the aggregate would not (even if enforced) cause a Material Adverse Effect; (f) Liens consisting of judgment or judicial attachment liens and liens securing contingent obligations on appeal bonds and other bonds posted in connection with court proceedings or judgments, provided that (i) in the case of judgment and judicial attachment liens, the enforcement of such Liens is effectively stayed and (ii) all such liens in the aggregate at any time outstanding for the Company and its Subsidiaries do not exceed $20,000,000; (g) easements, rights-of-way, covenants, conditions, restrictions and other similar encumbrances incurred in the ordinary course of business which, individually or in the aggregate, do not materially interfere with the ordinary conduct of the respective businesses of the Company and its Subsidiaries; (h) Liens securing obligations in respect of Capital Leases or operating leases on assets subject to such leases, provided that, in the case of Capital Leases, such Capital Leases are otherwise permitted hereunder; (i) Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided that (i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against 47 54 access by the Company in excess of those set forth by regulations promulgated by the FRB, and (ii) such deposit account is not intended by the Company or any Subsidiary to provide collateral to the depository institution; (j) any Lien on property existing at the time of acquisition of such property by the Company or a Subsidiary, or Liens to secure the payment of all or part of the purchase price of property upon the acquisition of property by the Company or a Subsidiary or to secure any Indebtedness incurred or guaranteed prior to, at the time of, or within one hundred eighty (180) days after, the later of the date of acquisition of such property and the date such property is placed in service, for the purpose of financing all or any part of the purchase price thereof, or Liens to secure any Indebtedness incurred or guaranteed for the purpose of financing the cost to the Company or a Subsidiary or improvements to such acquired property; (k) other Liens, in addition to those permitted by clauses (a) through (j), securing Indebtedness or arising in connection with Securitization Transactions; provided that(i) the sum (without duplication) of all such Indebtedness (excluding Indebtedness arising in connection with Securitization Transactions) shall not at any time exceed in the aggregate $100,000,000; and (ii) the aggregate investment or claim held at any time by all purchasers, assignees or other transferees of (or of interests in) receivables and other rights to payment in all such Securitization Transactions, shall not at any time exceed in the aggregate $200,000,000; and (l) rights of first refusal, rights of Governmental Authorities to approve transfers and other similar restrictions on transfer of any ownership interest of the Company or any of its Subsidiaries in any joint venture or similar investment in an entity (other than a Subsidiary) operating primarily outside of the United States. 7.3 Restrictions on Subsidiaries. The Company (a) will not enter into any agreement or understanding pursuant to which any claim it may have against any Subsidiary would be subordinate in any manner to the payment of any other obligation of such Subsidiary and (b) will not, and will not permit any Subsidiary to, enter into any agreement or understanding which by its terms limits or restricts the ability of such Subsidiary to make funds available to the Company (whether by way of a dividend or other distribution, by repayment of any inter-company advance or otherwise) if, in any such case referred to in (a) or (b) above, there is, at the time any such agreement is entered into, a reasonable likelihood that all such agreements and understandings referred to in (a) or (b) above, considered together, would 48 55 materially and adversely affect the ability of the Company to meet its obligations as they become due. 7.4 Consolidation, Mergers and Sales of Assets. The Company will not merge or consolidate with any other Person or sell, lease, transfer or otherwise dispose of its property and assets as, or substantially as, an entirety to any Person, unless (a) either the Company shall be the continuing or surviving corporation, or the successor or acquiring corporation shall be a solvent corporation organized under the laws of any State of the United States of America and shall expressly assume in writing all of the obligations of the Company under this Agreement and the Notes, including all covenants herein and therein contained, and such successor or acquiring corporation shall succeed to and be substituted for the Company with the same effect as if it had been named herein as a party hereto, provided that no such sale shall release the Company from any of its obligations and liabilities under this Agreement or the Notes unless such sale is followed by the complete liquidation of the Company and substantially all the assets of the Company immediately following such sale are distributed in such liquidation, and (b) the Company as the continuing or surviving corporation or the successor or acquiring corporation, as the case may be, shall not, immediately after such merger or consolidation, or such sale or other disposition, be in default under any such obligations. 7.5 Limitation on Subsidiary Indebtedness. The Company shall not permit its Subsidiaries to create, incur, assume or suffer to exist, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness (excluding obligations in respect of Securitization Transactions) at any time outstanding in an aggregate amount in excess of the greater of (a) $100,000,000 and (b) 12.5% of Total Debt. 7.6 Transactions with Affiliates. The Company shall not, and shall not permit any Subsidiary to, enter into any transaction with any Affiliate of the Company (other than the Company or a Subsidiary), except upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would obtain in a comparable arm's-length transaction with a Person not an Affiliate of the Company or such Subsidiary. 7.7 Use of Proceeds. The Company shall not, and shall not permit any Subsidiary to, use any portion of the Loan proceeds, directly or indirectly, to (i) engage principally, or as one of its important activities, in the business of extending credit for the purposes of purchasing or carrying any Margin Stock or (ii) use the proceeds of any Loan, directly or indirectly, whether immediate, incidental or ultimate, (a) to purchase or carry, within the meaning of Regulation U, any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any 49 56 Margin Stock, unless done in strict compliance with Regulation U and other applicable law and the Company shall have executed and delivered to each Lender prior to such use a Form U-1 statement evidencing compliance with Regulation U and such other documents relating thereto as any Lender shall reasonably request, or (b) in a manner which would violate, or result in a violation of, Regulation U. 7.8 ERISA. The Company shall not, and shall not permit any of its ERISA Affiliates to: (a) engage in a prohibited transaction or material violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in liability of the Company in an aggregate amount in excess of $5,000,000; or (b) engage in a transaction that could be subject to Section 4069 or 4212(c) of ERISA. 7.9 Securitization Transactions. The Company shall not, and shall not permit its Subsidiaries to enter into any Securitization Transaction to the extent that the aggregate investment or claims held at any time by all purchasers, assignees, transferees of (or of interests in) receivables and other rights to payment in all Securitization Transactions would at any time exceed $200,000,000. ARTICLE VIII EVENTS OF DEFAULT 8.1 Event of Default. Any of the following shall constitute an "Event of Default": (a) Non-Payment. The Company fails to pay, (i) when and as required to be paid herein, any amount of principal of any Loan or (ii) within five days after the same becomes due, any interest, fee or any other amount payable hereunder or under any other Loan Document. (b) Representation or Warranty. Any representation or warranty by the Company or any Subsidiary made or deemed made herein or in any other Loan Document, or which is contained in any certificate, document or financial or other written statement by the Company, any Subsidiary or any Responsible Officer furnished at any time under this Agreement or under any other Loan Document, is incorrect in any material respect on or as of the date made or deemed made. (c) Specific Defaults. The Company fails to perform or observe any term, covenant or agreement contained in Article VII. 50 57 (d) Other Defaults. The Company fails to perform or observe any other term or covenant contained in this Agreement or any other Loan Document (any such failure being referred to in this Section 8.1(d) as a "default") and such default shall continue unremedied for a period of 30 days after (i) the date upon which written notice of such default is given to the Company by the Administrative Agent or (ii) if the Company fails to promptly notify the Administrative Agent and the Lenders of the occurrence of any default in accordance with Section 6.3, the date on which the Company has actual knowledge of such default. (e) Cross-Default. The Company or any Subsidiary (i) fails to make any payment of Material Financial Obligations when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise, but after giving effect to any applicable grace or cure period); or (ii) fails to perform or observe any other condition or covenant, or any other event shall occur or condition exist, under one or more agreements or instruments relating to Material Financial Obligations, if the effect of such failure, event or condition is to cause (or require), or to permit the holder or holders of such Material Financial Obligations (or the beneficiary or beneficiaries of such Material Financial Obligations (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries)) to cause (or require), such Material Financial Obligations to become due and payable (or to be purchased, repurchased, defeased or cash collateralized) prior to the stated maturity thereof. (f) Insolvency; Voluntary Proceedings. The Company or any Material Subsidiary (i) generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any, whether at stated maturity or otherwise; (ii) voluntarily ceases to conduct its business in the ordinary course; (iii) commences any Insolvency Proceeding with respect to itself; or (iv) takes any action to effectuate or authorize any of the foregoing; provided that the foregoing shall not apply to the voluntary liquidation, dissolution or winding up of a Subsidiary permitted by Section 6.4. (g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is commenced or filed against the Company or any Material Subsidiary, or any writ, judgment, warrant of attachment, execution or similar process is issued or levied against a substantial part of the Company's or any such Subsidiary's properties, and such proceeding or petition shall not be dismissed, or such writ, judgment, warrant of attachment, execution or similar process shall not be released, vacated or fully bonded, within 60 days after commencement, filing or levy; (ii) the Company or any Material Subsidiary admits the material 51 58 allegations of a petition against it in any Insolvency Proceeding, or an order for relief (or similar order under non- U.S. law) is ordered in any Insolvency Proceeding with respect to the Company or such Subsidiary; or (iii) the Company or any Material Subsidiary acquiesces in the appointment of a receiver, trustee, custodian, conservator, liquidator, mortgagee in possession (or agent therefor), or other similar Person for itself or a substantial portion of its property or business. (h) ERISA. (i) An ERISA Event shall occur with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Company under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $20,000,000; (ii) a contribution failure shall occur with respect to a Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; or (iii) the Company or any ERISA Affiliate shall fail to pay when due, after the expiration of any applicable grace period (or any period during which (x) the Company is permitted to contest its obligation to make such payment without incurring any liability (other than interest) or penalty and (y) the Company is contesting such obligation in good faith and by appropriate proceedings), any installment payment with respect to its withdrawal liability under Section 4201 of ERISA or any contribution obligation under Section 4243 of ERISA, in each case under a Multiemployer Plan in an aggregate amount in excess of $30,000,000. (i) Monetary Judgments. One or more non-interlocutory judgments, non-interlocutory orders, decrees or arbitration awards is entered against the Company or any Subsidiary involving in the aggregate a liability (to the extent not covered by insurance as to which the insurer does not dispute coverage) as to any single or related series of transactions, incidents or conditions of $50,000,000 or more, and the same shall remain unvacated and unstayed pending appeal for a period of 30 days after the entry thereof. (j) Non-Monetary Judgments. Any non-monetary judgment, order or decree is entered against the Company or any Subsidiary which does or would reasonably be expected to have a Material Adverse Effect, and there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect. (k) Change of Control. Any Change of Control occurs. 8.2 Remedies. If any Event of Default occurs, the Administrative Agent shall, at the request of, or may, with the consent of, the Majority Lenders, 52 59 (a) if the Loans have not been made, declare the Commitment of each Lender to make the Loans to be terminated, whereupon such Commitments shall be terminated; (b) if the Loans have been made, declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company; and (c) in any event, exercise on behalf of itself and the Lenders all other rights and remedies available to it and the Lenders under the Loan Documents or applicable law; provided that upon the occurrence of any event specified in subsection (f) or (g) of Section 8.1 (in the case of clause (i) of subsection (g), upon the expiration of the 60-day period mentioned therein), any obligation of the Lenders to make Loans shall automatically terminate and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable without further act of the Administrative Agent or any other Lender. The Administrative Agent shall promptly notify the Company of any declaration described in clause (a) or (b) of the preceding sentence, but failure to give any such notice shall not impair any such declaration or result in any liability to the Administrative Agent. 8.3 Notice of Defaults. The Administrative Agent shall give notice to the Company under subsection 8.1(d)(i) promptly upon being requested to do so by any Lender and shall thereupon notify all the Lenders thereof. 8.4 Rights Not Exclusive. The rights provided for in this Agreement and the other Loan Documents are cumulative and are not exclusive of any other rights, powers, privileges or remedies provided by law or in equity, or under any other instrument, document or agreement now existing or hereafter arising. ARTICLE IX THE ADMINISTRATIVE AGENT 9.1 Appointment and Authorization; "Administrative Agent". Each Lender hereby irrevocably (subject to Section 9.9) appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform 53 60 such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term "agent" in this Agreement with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. 9.2 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care. 9.3 Liability of Administrative Agent. None of the Administrative Agent-Related Persons shall (i) be liable to any Lender for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by the Company or any Subsidiary or Affiliate of the Company, or any officer thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of the Company or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Administrative Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of the Company or any of the Company's Subsidiaries or Affiliates. 54 61 9.4 Reliance by Administrative Agent. (a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Company), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Majority Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Majority Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders. (b) For purposes of determining compliance with the conditions specified in Section 4.1, each Lender that has executed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter either sent by the Administrative Agent to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender. 9.5 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default or Unmatured Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or the Company referring to this Agreement, describing such Event of Default or Unmatured Event of Default and stating that such notice is a "notice of default". If the Administrative Agent receives such a notice, the Administrative Agent will notify the Lenders of its receipt of such notice. The Administrative Agent shall take such action with respect to such Event of Default or Unmatured Event of Default as may be requested by the Majority Lenders in accordance with this Article IX; provided, however, that unless and until the Administrative Agent has received any such request, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to 55 62 such Event of Default or Unmatured Event of Default as it shall deem advisable or in the best interest of the Lenders. 9.6 Credit Decision. Each Lender acknowledges that none of the Administrative Agent-Related Persons has made any representation or warranty to it, and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of the Company and its Subsidiaries, shall be deemed to constitute any representation or warranty by any Administrative Agent-Related Person to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon any Administrative Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Company and its Subsidiaries, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Company hereunder. Each Lender also represents that it will, independently and without reliance upon any Administrative Agent- Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Company. Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Administrative Agent, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Company which may come into the possession of any Administrative Agent-Related Person. 9.7 Indemnification of Administrative Agent. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand the Administrative Agent-Related Persons (to the extent not reimbursed by or on behalf of the Company and without limiting the obligation of the Company to do so), pro rata, from and against any and all Indemnified Liabilities; provided, however, that no Lender shall be liable for the payment to any Administrative Agent-Related Person of any portion of the Indemnified Liabilities resulting from such Person's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the 56 63 preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Company. The undertaking in this Section shall survive the termination of this Agreement, the payment of all Obligations and the resignation or replacement of the Administrative Agent. 9.8 Administrative Agent in Individual Capacity. Bank of America and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Company and its Subsidiaries and Affiliates as though Bank of America were not the Administrative Agent hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of America or its Affiliates may receive information regarding the Company or its Affiliates (including information that may be subject to confidentiality obligations in favor of the Company or such Subsidiary) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to its Loans, Bank of America shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Administrative Agent. 9.9 Successor Administrative Agent. The Administrative Agent may, and at the request of the Majority Lenders shall, resign as Administrative Agent upon 30 days' notice to the Lenders. If the Administrative Agent resigns under this Agreement, the Majority Lenders (with, so long as no Event of Default exists, the consent of the Company, which shall not be unreasonably withheld or delayed) shall appoint from among the Lenders a successor administrative agent for the Lenders. If no successor administrative agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Company, a successor administrative agent from among the Lenders. Upon the acceptance of its appointment as successor administrative agent hereunder, such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term "Administrative Agent" shall mean such successor administrative agent and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shall be terminated. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article IX and Sections 10.4 and 10.5 shall inure to its benefit as to any 57 64 actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date which is 30 days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Majority Lenders appoint a successor administrative agent as provided for above. 9.10 Withholding Tax. (a) If any Lender is a "foreign corporation, partnership or trust" within the meaning of the Code and such Lender claims exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Lender agrees with and in favor of the Administrative Agent and the Company, to deliver to the Administrative Agent (with a copy to the Company): (i) if such Lender claims an exemption from, or a reduction of, withholding tax under a United States tax treaty, properly completed IRS Forms 1001 and W-8 (or any successor form) before the payment of any interest in the first calendar year and before the payment of any interest in each third succeeding calendar year during which interest may be paid under this Agreement; (ii) if such Lender claims that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Lender, two properly completed and executed copies of IRS Form 4224 before the payment of any interest is due in the first taxable year of such Lender and in each succeeding taxable year of such Lender during which interest may be paid under this Agreement, and IRS Form W-9 (or any successor form); and (iii) such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding tax. Each such Lender agrees to promptly notify the Administrative Agent and the Company of any change in circumstances which would modify or render invalid any claimed exemption or reduction. (b) If any Lender claiming exemption from, or reduction of, withholding tax under a United States tax treaty by providing IRS Form 1001 (or any successor form) sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations owed to such Lender, such Lender agrees to notify 58 65 the Administrative Agent of the percentage amount in which it is no longer the beneficial owner of Obligations of the Company to such Lender. To the extent of such percentage amount, the Administrative Agent will treat such Lender's IRS Form 1001 (or any successor form) as no longer valid. (c) If any Lender claiming exemption from United States withholding tax by filing IRS Form 4224 (or any successor form) with the Administrative Agent grants a participation in all or part of the Obligations owed to such Lender, such Lender agrees to undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code. (d) If any Lender is entitled to a reduction in the applicable withholding tax, the Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable withholding tax after taking into account such reduction. If the forms or other documentation required by subsection (a) of this Section are not delivered to the Administrative Agent, then the Administrative Agent may withhold from any interest payment to such Lender not providing such forms or other documentation an amount equivalent to the applicable withholding tax. (e) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that the Administrative Agent or the Company did not properly withhold tax from amounts paid to or for the account of any Lender because such Lender failed to notify the Administrative Agent or the Company of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective) such Lender shall indemnify the Administrative Agent and the Company fully for all amounts paid, directly or indirectly, by the Administrative Agent or the Company as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent or the Company under this Section, together with all costs and expenses (including Attorney Costs). The obligation of the Lenders under this subsection shall survive the payment of all Obligations and the resignation or replacement of the Administrative Agent. ARTICLE X MISCELLANEOUS 10.1 Amendments and Waivers. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by the Company or any 59 66 applicable Subsidiary therefrom, shall be effective unless the same shall be in writing and signed by the Majority Lenders and the Company and acknowledged by the Administrative Agent, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no such waiver, amendment or consent shall, unless in writing and signed by all Lenders and the Company and acknowledged by the Administrative Agent, do any of the following: (a) increase or extend the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.2); (b) postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document; (c) reduce the principal of, or the rate of interest specified herein on, any Loan, or reduce any fees (other than the fees referred to in subsection 2.11), or other amounts payable hereunder or under any other Loan Document; (d) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans which is required for the Lenders or any of them to take any action hereunder; or (e) amend this Section, or Section 2.14, or any provision herein providing for consent or other action by all Lenders; and provided, further, that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Majority Lenders or all Lenders, as the case may be, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document. 10.2 Notices. (a) All notices, requests, consents, approvals, waivers and other communications shall be in writing (including, unless the context expressly otherwise provides, by facsimile transmission, provided that any matter transmitted by the Company by facsimile (i) shall be immediately confirmed by a telephone call to the recipient at the number specified on Schedule 10.2, and (ii) shall be followed promptly by delivery of a hard copy original thereof) and mailed, faxed or delivered, to the address or facsimile number specified for notices on Schedule 10.2 or (x) in the case of the Company or the Administrative Agent, to such other address as shall be designated by such party in a written notice to the other parties and (y) in the case of any other party, at such other address as shall be designated by 60 67 such party in a written notice to the Company and the Administrative Agent. (b) All such notices, requests, consents, approvals, waivers and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the U.S. mail, certified or registered mail, return receipt requested or if delivered, upon delivery; except that notices pursuant to Article II or IX to the Administrative Agent shall not be effective until actually received by the Administrative Agent. (c) Any agreement of the Administrative Agent and the Lenders herein to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Company. The Administrative Agent and the Lenders shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Company to give such notice and the Administrative Agent and the Lenders shall not have any liability to the Company or any other Person on account of any action taken or not taken by the Administrative Agent or the Lenders in reliance upon such telephonic or facsimile notice. The obligation of the Company to repay the Loans shall not be affected in any way or to any extent by any failure by the Administrative Agent and the Lenders to receive written confirmation of any telephonic or facsimile notice or the receipt by the Administrative Agent and the Lenders of a confirmation which is at variance with the terms understood by the Administrative Agent and the Lenders to be contained in the telephonic or facsimile notice. 10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. 10.4 Costs and Expenses. The Company shall: (a) whether or not the transactions contemplated hereby are consummated, pay or reimburse Bank of America (including in its capacity as Administrative Agent) and BAS within five Business Days after demand (subject to subsection 4.1(e)) for all reasonable costs and expenses incurred by Bank of America (including in its capacity as Administrative Agent) and BAS in connection with the negotiation, preparation, delivery, 61 68 documentation and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Agreement, any other Loan Document and any other document prepared in connection herewith or therewith, and the consummation of the transactions contemplated hereby and thereby, including Attorney Costs incurred by Bank of America (including in its capacity as Administrative Agent) and BAS with respect thereto; and (b) pay or reimburse the Administrative Agent, BAS and each Lender within five Business Days after demand for all reasonable costs and expenses (including Attorney Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or any other Loan Document (including in connection with any "workout" or restructuring regarding the Loans, and including in any Insolvency Proceeding or appellate proceeding). 10.5 Company Indemnification. Whether or not the transactions contemplated hereby are consummated, the Company shall indemnify, defend and hold the Administrative Agent-Related Persons and each Lender and each of their respective officers, directors, employees, counsel, agents and attorneys-in-fact (each an "Indemnified Person") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time (including at any time following repayment of the Loans and the termination, resignation or replacement of the Administrative Agent or replacement of any Lender) be imposed on, incurred by or asserted against any such Person in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any Insolvency Proceeding or appellate proceeding) related to or arising out of this Agreement or the Loans or the use of the proceeds thereof, whether or not any Indemnified Person is a party thereto (all the foregoing, collectively, the "Indemnified Liabilities"); provided that the Company shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities resulting solely from the gross negligence or willful misconduct of such Indemnified Person. The agreements in this Section shall survive the termination of this Agreement and the payment of all other Obligations. 10.6 Payments Set Aside. To the extent that the Company makes a payment to the Administrative Agent or the Lenders, or the Administrative Agent or any Lender exercises its right of 62 69 set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, a receiver or any other party, in connection with any Insolvency Proceeding or otherwise, then (a) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its pro rata share of any amount so recovered from or repaid by the Administrative Agent. 10.7 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Company may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent and each Lender. 10.8 Assignments, Participations, etc. (a) Any Lender may, with the written consent of the Company (which consent shall not be required during the existence of an Event of Default) and the Administrative Agent (such consents not to be unreasonably withheld or delayed), at any time assign and delegate to one or more Eligible Assignees (provided that no written consent of the Company or the Administrative Agent shall be required in connection with any assignment and delegation by a Lender to an Eligible Assignee that is an Affiliate of such Lender) (each an "Assignee") all, or any ratable part of all, of the Loan, the Commitment and the other rights and obligations of such Lender hereunder, in a minimum amount of $10,000,000 (or, if less, the outstanding principal amount of such Lender's Loan); provided, however, that the Company and the Administrative Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to the Company and the Administrative Agent by such Lender and the Assignee; (ii) such Lender and its Assignee shall have delivered to the Company and the Administrative Agent an Assignment and Acceptance in the form of Exhibit E ("Assignment and Acceptance") together with any Note subject to such assignment and (iii) such Lender or the Assignee has paid to the Administrative Agent a processing fee in the amount of $3,500. (b) From and after the date that the Administrative Agent notifies the assignor Lender that it has received and provided its consent (and, to the extent required, received the 63 70 consent of the Company) with respect to an executed Assignment and Acceptance and payment of the above-referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under the Loan Documents. (c) As soon as practicable after the effectiveness of any Assignment and Acceptance pursuant to subsection 10.8(a)), the Company shall, upon request, execute and deliver to the Administrative Agent a new Note evidencing the applicable Assignee's assigned Loans. Immediately upon the effectiveness of any Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and/or the resulting adjustment of the Pro Rata Shares arising therefrom. (d) Any Lender may at any time sell to one or more commercial banks or other Persons not Affiliates of the Company (a "Participant") participating interests in the Loan of such Lender, the Commitment of such Lender and the other interests of such Lender (the "originating Lender") hereunder and under the other Loan Documents; provided, however, that (i) the originating Lender's obligations under this Agreement shall remain unchanged, (ii) the originating Lender shall remain solely responsible for the performance of such obligations, (iii) the Company and the Administrative Agent shall continue to deal solely and directly with the originating Lender in connection with the originating Lender's rights and obligations under this Agreement and the other Loan Documents, and (iv) no Lender shall transfer or grant any participating interest under which a Participant has rights to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment, consent or waiver would require unanimous consent of the Lenders as described in the first proviso to Section 10.1. In the case of any such participation, the Participant shall be entitled to the benefit of Sections 3.1, 3.3, 3.4 and 10.5 as though it were also a Lender hereunder (provided that no Participant shall be entitled to any greater amount pursuant to such Sections than the originating Lender would have been entitled to receive if no such participation had been sold), and if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this 64 71 Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement. (e) Any Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC"), identified as such in writing from time to time by such Granting Lender to the Administrative Agent and the Company, the option to provide all or any part of the Loan that such Granting Lender would otherwise be obligated to make to the Company pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of any Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute, or join any other Person in instituting, against such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under the laws of the United States or any State thereof with respect to any claim arising out of this Agreement. In addition, notwithstanding anything to the contrary contained in this subsection 10.8(e), any SPC may (i) with notice to, but without the prior written consent of, the Company and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Lender or to any financial institution providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC. (f) Notwithstanding any other provision in this Agreement, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement and any Note held by it in favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law. 10.9 Confidentiality. Each Lender agrees to take, and to cause its Affiliates to take, normal and reasonable precautions and exercise due care to maintain the confidentiality of all 65 72 information identified as "confidential" or "secret" by the Company and provided to it by the Company or any Subsidiary, or by the Administrative Agent on the Company's or such Subsidiary's behalf, under this Agreement or any other Loan Document (including any information provided pursuant to Section 6.2, 6.3 or 6.10), and neither such Lender nor any of its Affiliates shall use any such information other than in connection with or in enforcement of this Agreement and the other Loan Documents or in connection with other business now or hereafter existing or contemplated with the Company or any Subsidiary; except to the extent such information (i) was or becomes generally available to the public other than as a result of disclosure by such Lender, or (ii) was or becomes available on a non-confidential basis from a source other than the Company, provided that such source is not bound by a confidentiality agreement with the Company or any Subsidiary known to such Lender; provided, however, that any Lender may disclose such information (A) at the request or pursuant to any requirement of any Governmental Authority to which such Lender is subject or in connection with an examination of such Lender by any such authority; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable Requirement of Law; (D) to the extent reasonably required in connection with any litigation or proceeding to which the Administrative Agent or any Lender or any of their respective Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of any remedy hereunder or under any other Loan Document; (F) to such Lender's independent auditors and other professional advisors; (G) to any Participant or Assignee, actual or potential, provided that such Person agrees in writing to keep such information confidential to the same extent required of the Lenders hereunder; (H) as to any Lender or any of its Affiliates, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which the Company or any Subsidiary is party or is deemed party with such Lender or such Affiliate; and (I) to its Affiliates. 10.10 Set-off. In addition to any rights and remedies of the Lenders provided by law, if any Event of Default exists, each Lender is authorized at any time and from time to time, without prior notice to the Company, any such notice being expressly waived by the Company to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender to or for the credit or the account of the Company against any and all Obligations owing to such Lender, now or hereafter existing, irrespective of whether or not the Administrative Agent or such Lender shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured. Each Lender agrees promptly to notify the Company and 66 73 the Administrative Agent after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. 10.11 Notification of Addresses, Lending Offices, Etc. Each Lender shall notify the Administrative Agent in writing of any change in the address to which notices to such Lender should be directed, of addresses of any Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Administrative Agent shall reasonably request. 10.12 Counterparts. This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original, and all of which taken together shall be deemed to constitute but one and the same instrument. 10.13 Severability. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder. 10.14 No Third Parties Benefited. This Agreement is made and entered into for the sole protection and legal benefit of the Company, the Lenders, the Administrative Agent and the Administrative Agent-Related Persons and the Indemnified Persons, and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. 10.15 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS. EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR 67 74 ANY DOCUMENT RELATED HERETO. THE COMPANY, THE ADMINISTRATIVE AGENT AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW. 10.16 Waiver of Jury Trial. THE COMPANY, THE LENDERS AND THE ADMINISTRATIVE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY ADMINISTRATIVE AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE LENDERS AND THE ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENT, RENEWAL, SUPPLEMENT OR MODIFICATION TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. 10.17 Enitre Agreement. This Agreement, together with the other Loan Documents (and (i) any agreement relating to fees referred in subsection 2.11 and (ii) to any commitment letter or similar letter among the Company and the Administrative Agent and/or BAS but only to the extent that the provisions thereof, by their express terms, survive the Funding Date), embodies the entire agreement and understanding among the Company, the Lenders and the Administrative Agent, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. 68 75 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. TENNECO PACKAGING INC. By: /s/ A.A. Campbell ------------------------------------ Title: Vice President --------------------------------- BANK OF AMERICA, N.A., as Administrative Agent By: /s/ John W. Pocalyko ------------------------------------ Title: Managing Director --------------------------------- BANK OF AMERICA, N.A., as a Lender By: /s/ John W. Pocalyko ------------------------------------ Title: Managing Director --------------------------------- 76 SCHEDULE 1.1 PRICING SCHEDULE The Applicable Margin shall be determined in accordance with the table below and the other provisions of this Schedule 1.1. ================================================================================ Level I Level II Level III Level IV Level V ================================================================================ Applicable 0.60% .875% 1.00% 1.175% 1.50% Margin ================================================================================ Level I applies when either the S&P Rating is A- or higher or the Moody's Rating is A3 or higher; Level II applies when either the S&P Rating is BBB+ or higher or the Moody's Rating is Baa1 or higher; Level III applies when either the S&P Rating is BBB or higher or the Moody's Rating is Baa2 or higher; Level IV applies when either the S&P Rating is BBB- or higher or the Moody's Rating is Baa3 or higher; Level V applies when the S&P Rating is lower than BBB- and the Moody's Rating is lower than Baa3; provided that at any time the S&P Rating and Moody's Rating are more than one rating level apart, the Applicable Margin shall be based on the level immediately below the higher of such levels. If at any time there exists neither a Moody's Rating nor an S&P Rating, the Applicable Margin during such time shall be determined as set forth above for Level VI. Any change in the Applicable Margin as a result of a change in either the S&P Rating and/or the Moody's Rating shall be effective as of the day immediately following such change. 77 Schedule 5.5 Litigation 78 Schedule 5.12 Environmental Matters 79 Schedule 5.16 Subsidiaries and Minority Interests 80 Schedule 7.2 Permitted Liens 81 SCHEDULE 10.2 OFFSHORE AND DOMESTIC LENDING OFFICES, ADDRESSES FOR NOTICES EX-10.21 24 LETTER AGREEMENT 1 EXHIBIT 10.21 November 1, 1999 Tenneco Inc. 1275 King Street Greenwich, CT 06831-2946 Tenneco Packaging Inc. 1900 West Field Court Lake Forest, IL 60045 Ladies and Gentlemen: Please refer to (i) the letter agreement dated as of September 10, 1999 (the "Commitment Letter") among Tenneco Inc. ("Tenneco"), Bank of America, N.A. ("Bank of America") and Banc of America Securities LLC ("BAS") relating to a $1,500,000,000 Term Loan Facility, (ii) the Fee letter (as defined in the Commitment Letter) and (iii) the letter dated September 8, 1999 (the "Engagement Letter") between Tenneco and BAS regarding the exclusive engagement of BAS to act as sole lead initial purchaser or underwriter and sole book-running lead manager in connection with certain debt securities to be issued by Tenneco Packaging Inc ("Tenneco Packaging"). Tenneco, Bank of America and BAS hereby agree that the second full paragraph on page 2 of the Commitment Letter is amended by (a) deleting the number "sixty" in the third line thereof and substituting the number "90", (b) deleting "five business" in the fifth line thereof and substituting the number "30", (c) deleting the number "90" in the fourteenth line thereof and substituting the number "120", and (d) adding the following sentence at the end of the paragraph: "The agreements in this paragraph shall survive the initial closing of the Term Loan Facility". Tenneco, Bank of America and BAS hereby agree that the description of the fees set forth on the first page of the Fee Letter is amended in its entirety to read as follows: "STRUCTURING FEE. You will pay, or will cause Tenneco Packaging to pay, Bank of America a structuring fee of $2,000,000 upon acceptance of the Commitment Letter. ARRANGEMENT FEE. If Tenneco Packaging borrows under the Term Loan Facility, you will pay, or will cause Tenneco Packaging to pay, Bank of America, for its own account, an arrangement fee in an amount equal to 0.8% of the amount funded under the Term Loan Facility (it being understood that the structuring fee referred to above shall be 2 Tenneco Inc. Tenneco Packaging Inc. November 1, 1999 Page 2 credited against such arrangement fee). Such fee shall be for arranging the Term Loan Facility and shall be payable on the date of funding of the Term Loan Facility. UPFRONT FEE. If Tenneco Packaging borrows under the Term Loan Facility, you will pay, or will cause Tenneco Packaging to pay, Bank of America, for its own account, an upfront fee on the funding date in an amount equal to 0.2% of the amount funded under the Term Loan Facility. Such Fee shall be for funding the Term Loan Facility and shall be payable on the date of funding of the Term Loan Facility. SYNDICATION FEE. If Bank of America elects to syndicate the Term Loan Facility, you will pay, or will cause Tenneco Packaging to pay, concurrently with the funding of the syndication of the Term Loan Facility, a participation fee to each of the Lenders which will be determined by Bank of America based on then-current market conditions, calculated based on each Lender's commitment and payable on each Lender's final allocation of the Term Loan Facility. ADMINISTRATIVE AGENCY FEE. Tenneco Packaging will pay an annual administrative agency fee to Bank of America, for its own account as Administrative Agent for the Lenders under the Term Loan Facility, in an amount and at times to be determined by Bank of America, in consultation with you, at the time of syndication." Tenneco and BAS hereby agree that the Engagement Letter is amended by (a) deleting the last sentence of the second paragraph on the first page thereof and substituting the following therefor: "Such engagement will begin on the date of the Spinoff." ; and (b) deleting the last two sentences on the first page thereof and substituting the following therefor: "The total gross commission or discount will be a percentage of the aggregate principal amount of the Securities issued. Assuming that the Securities have a bullet maturity of 10 years, such percentage will be (i) 0.65% if the Securities are rated at least Baa3 by Moody's and at least BBB- by Standard & Poor's; (ii) 0.875% if the Securities are rated at least Baa3 by Moody's and at least BB+ by Standard & Poor's or at least Ba1 by Moody's and at least BBB- by Standard & Poor's (and, in each case, if clause (i) is not applicable); and (iii) 1.65% if the Securities are rated at least Ba1 by Moody's and at least 3 Tenneco Inc. Tenneco Packaging Inc. November 1, 1999 Page 3 BB+ by Standard & Poor's and clauses (i) and (ii) are not applicable; and (iv) 2.125% if clauses (i), (ii) and (iii) are not applicable. If the Securities have a different maturity, the percentage will be adjusted based on current market practice at the time of the offering for securities of such maturity." The parties hereto agree that, effective at the time of the Spin-Off (as defined in the Commitment Letter), (a) Tenneco Packaging shall assume all obligations of Tenneco under the Commitment Letter, the Fee Letter, the Engagement Letter and the letter agreement dated July 21, 1999 among Tenneco, Bank of America and BAS relating to $1,000,000,000 of Senior Credit Facilities and a $175,000,000 Lease Facility and the fee letter related thereto (collectively the "July 21 Letters") and (b) Tenneco shall be released from all of its obligations under the Commitment Letter, the Fee Letter, the Engagement Letter and the July 21 Letters. Please evidence your agreement to the foregoing by signing and returning a counterpart of this letter agreement. Very truly yours, 4 Tenneco Inc. Tenneco Packaging Inc. November 1, 1999 Page 4 BANK OF AMERICA, N.A. By: ------------------------------------ Title: --------------------------------- BANC OF AMERICA SECURITIES LLC By: ------------------------------------ Title: --------------------------------- Accepted and Agreed: TENNECO INC. By: ------------------------------------ Title: --------------------------------- TENNECO PACKAGING INC. By: ------------------------------------ Title: --------------------------------- EX-10.22 25 PARTICIPATION AGREEMENT 1 EXHIBIT 10.22 PARTICIPATION AGREEMENT Dated as of October 28, 1999 among TENNECO PACKAGING INC., as Lessee, and Guarantor FIRST SECURITY BANK, N.A., not individually, except as expressly stated herein, but solely as Owner Trustee under the Temple Trust 1997-1 THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES HERETO FROM TIME TO TIME, as the Holders THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES HERETO FROM TIME TO TIME, as the Lenders and BANK OF AMERICA N.A., as Administrative Agent for the Lenders 2 TABLE OF CONTENTS ----------------- Page ---- SECTION 1. The Loans........................................................1 SECTION 2. Holder Fundings..................................................1 SECTION 3. Summary of Transactions..........................................2 3.1. Operative Agreements.............................................2 3.2. Property Purchase................................................2 SECTION 4. The Closings.....................................................2 4.1. Execution Date and Initial Closing Date..........................2 4.2. Initial Closing Date; Property Closing Dates.....................2 SECTION 5. Fundings; Lessee Delivery of Notices.............................3 5.1. General..........................................................3 5.2. Procedures for Funding...........................................3 5.3. Conditions to the Holders' and the Lenders' Obligations to Advance Funds on the Initial Closing Date or Funds for the Acquisition of Property..........................................4 5.4. Inspection of Documents; Hold Harmless; Removal of Properties....7 SECTION 6. Conditions of the Initial Closing................................8 6.1. Conditions to the Lessor's and the Holders' Obligations..........8 6.2. Conditions to the Lessee's Obligations...........................9 6.3. Conditions to the Agent's Obligations...........................11 SECTION 7. Representations and Warranties on the Initial Closing Date......12 7.1. Representations and Warranties of the Initial Holders...........12 7.2. Representations and Warranties of the Owner Trustee.............13 7.3. Representations and Warranties of the Lessee....................15 7.4. Representations and Warranties of the Agent.....................24 SECTION 8. General Covenants of the Lessee and the Guarantor...............25 8.1. Covenants of the Lessee.........................................25 SECTION 9. Payment of Certain Expenses.....................................35 9.1. Transaction Expenses............................................35 9.2. Certain Fees and Expenses.......................................36 9.3. Unused Fee and Holder Unused Fee................................36 -i- 3 SECTION 10. Other Covenants and Agreements..................................37 10.1. Cooperation with the Lessee.....................................37 10.2. Covenants of the Owner Trustee and the Holders..................37 10.3. Lessee Covenants, Consent and Acknowledgment....................39 10.4 . Sharing of Certain Payments.....................................41 10.5. Grant of Easements, Voting at Meetings, etc.....................41 SECTION 11. Credit Agreement and Trust Agreement.............................41 11.1. Lessee's Credit Agreement Rights................................41 11.2. Lessee's Trust Agreement Rights.................................42 SECTION 12. Transfer of Interest.............................................42 12.1. Restrictions on Transfer........................................42 12.2. Effect of Transfer..............................................43 SECTION 13. Indemnification..................................................43 13.1. General Indemnity...............................................43 13.2. General Tax Indemnity...........................................46 SECTION 14. Miscellaneous....................................................50 14.1. Survival of Agreements..........................................50 14.2. No Broker, etc..................................................50 14.3. Notices.........................................................51 14.4. Counterparts....................................................52 14.5. Amendments and Termination......................................52 14.6. Headings, etc...................................................52 14.7. Parties in Interest.............................................52 14.8. GOVERNING LAW; WAIVERS OF JURY TRIAL............................52 14.9. Submission to Jurisdiction; Waivers.............................53 14.10. Severability....................................................53 14.11. Liability Limited...............................................53 14.12. Rights of Lessee................................................55 14.13. Further Assurances..............................................55 14.14. Calculations under Operative Agreements.........................55 14.15. Confidentiality.................................................55 14.16. Calculation of Rent, Interest, Holder Yield and Fees............56 14.17. Assignment Clause...............................................56 -ii- 4 Schedule I Initial Holders Schedule II Litigation Schedule III Liens Exhibit A Requisition Form A Schedule 1 Legal Description of Land Schedule 2 Description of Improvements Schedule 3 Description of Equipment Exhibit B Tenneco Packaging Inc. Officer's Certificate Schedule 1 [itemized expenditures] Exhibit C Form of Opinion of Counsel to Tenneco Packaging Inc. and Tenneco Inc. Exhibit D Tenneco Packaging Inc. Officer's Certificate Exhibit E Tenneco Packaging Inc. Secretary's Certificate Exhibit F First Security Bank, N.A. Officer's Certificate Exhibit G First Security Bank, N.A. Certificate of Assistant Secretary Exhibit H Form of Opinion of Counsel to First Security Bank, N.A. Exhibit I Description of Land for Temple Property -iii- 5 PARTICIPATION AGREEMENT THIS PARTICIPATION AGREEMENT, dated as of October 28, 1999 (as amended, modified, restated or supplemented from time to time, this "Agreement"), is by and among TENNECO PACKAGING INC., a Delaware corporation ("Tenneco Packaging"), as Lessee (Tenneco Packaging and any permitted assignee thereof under the Lease being referred to as the "Lessee") and as Guarantor ("Tenneco Packaging" or the "Guarantor"); FIRST SECURITY BANK, N.A., a national banking association, not individually (in its individual capacity, the "Trust Company"), except as expressly stated herein, but solely as Owner Trustee under the Temple Trust 1997-1 (the "Owner Trustee", "Borrower" or the "Lessor"); BANK OF AMERICA N.A., as Administrative Agent (in such capacity, the "Agent") for the Lenders; BANK OF AMERICA N.A., a national banking association and the various other banks and lending institutions which are parties hereto from time to time as Holders; BANK OF AMERICA N.A., and the various other banks and lending institutions which are parties hereto from time to time as Lenders. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in Appendix A hereto. In consideration of the mutual agreements herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. The Loans. The Lenders have agreed to make Loans to the Lessor from time to time in an aggregate principal amount of up to the aggregate amount of the Commitments of the Lenders in order for the Lessor to acquire or refinance, as applicable, the Properties and certain Improvements and Equipment pursuant to the terms and provisions hereof, and in consideration of the receipt of the proceeds of such Loans, the Lessor will issue the Notes (together with any note or notes issued in exchange or substitution therefor in accordance with the Credit Agreement, the "Notes"). The Loans shall be made and the Notes shall be issued pursuant to the Credit Agreement. Pursuant to Section 5 of this Agreement and Section 2 of the Credit Agreement, the Loans will be made to the Lessor from time to time upon the appropriate submission by the Lessee of a Requisition therefor, in accordance with this Agreement and the other Operative Agreements. The Loans and the obligations of the Lessor under the Credit Agreement shall be secured by the Collateral. SECTION 2. Holder Fundings. Subject to the terms and conditions of this Agreement and in reliance on the representations and warranties of each of the parties hereto contained herein or made pursuant hereto on each date Fundings are made in accordance with Section 5 hereof, each Holder shall make a Holder Funding on a pro rata basis to the Owner Trustee with respect to the Temple Trust 1997-1 based on its Holder Commitment in an amount in immediately available funds such that the aggregate of all Holder Fundings shall be three and seventy-five one hundredths percent (3.75%) of the amount of the Funding being funded on such date; provided, no Holder shall be obligated for any Holder Funding in excess of its pro rata share of the Available Holder Commitment. The aggregate amount of Holder Fundings shall be 6 up to the aggregate amount of the Holder Commitments. No prepayment or any other payment with respect to any Funding shall be permitted such that the Holder Funding with respect to such Funding is less than 3.75% of the outstanding amount of such Funding, except in connection with termination or expiration of the Term or in connection with the exercise of remedies relating to the occurrence of a Lease Event of Default. The representations, warranties, covenants and agreements of the Holders herein and in the other Operative Agreements are several, not joint, and not joint and several. SECTION 3. Summary of Transactions. 3.1. Operative Agreements. On the date hereof (the "Execution Date"), each of the respective parties hereto and thereto shall execute and deliver this Agreement, the Lease, the Credit Agreement, the Notes, the Certificates, the Trust Agreement, the Security Agreement and such other documents, instruments, certificates and opinions of counsel as agreed to by the parties hereto. 3.2. Property Purchase. On the Initial Closing Date and on each Property Closing Date thereafter and subject to the terms and conditions of this Agreement (a) the Holders will each make a Holder Funding in accordance with Sections 2 and 5 of this Agreement and the terms and provisions of the Trust Agreement, (b) the Lenders will make Loans in accordance with Sections 1 and 5 of this Agreement and the terms and provisions of the Credit Agreement, and (c) the Lessor will purchase, refinance or lease pursuant to a Ground Lease, the applicable Property identified by the Lessee, and grant the Agent a Lien on such Property by execution of the required Security Documents. SECTION 4. The Closings. 4.1. Execution Date and Initial Closing Date. All documents and instruments required to be delivered on either the Execution Date or the Initial Closing Date shall be delivered at the offices of Mayer, Brown & Platt, 1675 Broadway, New York, New York 10019 or at such other location as may be determined by the Lessor, the Agent and the Lessee. 4.2. Initial Closing Date; Property Closing Dates. The Lessee shall deliver to the Lessor and the Agent a requisition (a "Requisition"), in the form attached hereto as Exhibit A-1 (for the Initial Closing Date) and Exhibit A-2 (for each Property Closing Date after the Initial Closing Date) or in such other form as is reasonably satisfactory to the Lessor, and the Agent, in connection with (a) the Initial Closing Date relating to the Transaction Expenses and other fees, expenses and disbursements payable by the Lessor pursuant to Section 9.1(a) with invoices (in form and substance reasonably acceptable to the Agent and the Lessor) for such Transaction Expenses and other fees, expenses and disbursements attached to such Requisition, and (b) each Property Closing Date relating to each Acquisition Funding pursuant to Section 5.3. Upon the written request of any Lender to the Agent, the Agent shall deliver a copy of said Requisition to such Lender. -2- 7 SECTION 5. Fundings; Lessee Delivery of Notices. 5.1. General. To the extent funds have been made available to the Lessor as Loans by the Lenders and Holder Fundings by the Holders, the Lessor will use such funds from time to time in accordance with the terms and conditions of this Agreement and the other Operative Agreements at the direction of the Lessee to acquire Properties (including Equipment) in accordance with the terms of this Agreement, the Lease and the other Operative Agreements, and (ii) to pay Transaction Expenses, fees, expenses and other disbursements payable by the Lessor under Sections 9.1 (a) and (b). 5.2. Procedures for Funding. (a) The Lessee shall designate the date for Fundings hereunder in accordance with the terms and provisions hereof. Contemporaneously with the consummation of the Spin-Off, the Lessee shall deliver to, the Lessor and the Agent with respect to the Initial Closing Date, a Requisition as described in Section 4.2 hereof (including without limitation such information regarding the Land, Improvements and Equipment included within the Group I Properties as the Agent and the Lessor shall reasonably require). Not less than (i) one (1) Business Day prior to the date of any requested Base Rate Funding and (ii) three (3) Business Days prior to the date of any requested Eurodollar Funding, the Lessee shall deliver to the Lessor and the Agent, with respect to each Property Closing Date after the Initial Closing Date, a Requisition as described in Section 4.2 hereof (including without limitation a legal description of the Land, a schedule of the Improvements, if any, and a schedule of the Equipment, if any, to be acquired on such date and a Completion Certificate with respect to any improvements on such Land, each of the foregoing in a form reasonably acceptable to the Lessor and the Agent). (b) Each Requisition shall: (i) be irrevocable, (ii) request funds in an amount that is not in excess of the total aggregate of the Available Commitments plus the Available Holder Commitments at such time, and (iii) request that the Holders make Holder Fundings and that the Lenders make Loans to the Lessor for the payment of the Property Acquisition Costs. (c) Subject to the terms and conditions of the Credit Agreement and the Trust Agreement and subject to the satisfaction of the conditions precedent set forth in Section 5.3, as applicable, on the Initial Closing Date and on each Property Closing Date after the Initial Closing Date, (i) the Lenders shall make Loans to the Lessor in an aggregate amount equal to 96.25% of the Requested Funds specified in any Requisition such loans to be apportioned as follows, (y) with respect to the Group I Properties, such loans to be apportioned 81.00% to the Series A Loans and 15.25% to the Series B Loans, and (z) with respect to the Group II Properties, 84.50% to Series A Loans and 11.75% to Series B Loans, up to aggregate principal amount equal to the Available Commitments, (ii) each -3- 8 Holder shall make a pro rata Holder Funding based on its Holder Commitment in an amount such that the aggregate of all Holder Fundings at such time shall be 3.75% of the balance of the Requested Funds specified in such Requisition, provided no such Holder Funding shall exceed such Holder's pro rata share of the Available Holder Commitments; and (iii) the total amount of such Loans and Holder Fundings made on such date shall (w) be used by the Lessor to pay the Property Acquisition Costs within three (3) Business Days after the receipt by the Lessor of such Funding, (y) be used by the Lessor to pay Transaction Expenses, fees, expenses and other disbursements to the extent permitted under Section 5.3, or (z) be disbursed by the Lessor, on the date of such Funding, to the Lessee to pay Property Costs, as applicable. Any such amounts held by the Lessor (or the Agent on behalf of the Lessor) shall be subject to the lien of the Security Agreement. 5.3. Conditions to the Holders' and the Lenders' Obligations to Advance Funds on the Initial Closing Date or Funds for the Acquisition of Property. (a) The obligations of each Holder to make Holder Fundings, and of each Lender to make Loans, to the Lessor on the Initial Closing Date and each Property Closing Date thereafter for the purpose of providing funds to the Lessor necessary to pay Transaction Expenses, fees, expenses and other disbursements payable by the Lessor under Section 9.1 of this Agreement, are subject to the prior or contemporaneous satisfaction or waiver of the following conditions precedent: (i) the correctness in all material respects on such Property Closing Date of the representations and warranties of the Owner Trustee, the Lessee and the Holders (other than such Holder) contained herein and in each of the other Operative Agreements; (ii) the performance in all material respects by the Lessee of its agreements contained herein and in the other Operative Agreements which covenants are to be performed by them on or prior to each such Property Closing Date; (iii) the satisfaction of all conditions to any such Holder Funding or Loan set forth in any Operative Agreement; (iv) the Agent and the Owner Trustee shall have received a fully executed copy of a counterpart of any Requisition, appropriately completed; (v) title to each Property being acquired on such Property Closing Date shall conform to the representations and warranties set forth in Section 7.3(j) hereof; -4- 9 (vi) except with respect to the Temple Property, the Lessee shall have delivered to the Lessor a copy of the Deed with respect to the Land and existing Improvements (if any), a copy of the Ground Lease (if any) with respect to the Land, and a copy of the Bill of Sale with respect to the Equipment, in each case for such of the foregoing as are being acquired on such Property Closing Date; and such Land and existing Improvements shall be located in an Approved State; (vii) there shall not have occurred and be continuing any Default or Event of Default under any of the Operative Agreements and no Default or Event of Default under any of the Operative Agreements shall have occurred after giving effect to the Funding requested by such Requisition; (viii) the Lessee shall have delivered to the Agent and the Owner Trustee, title insurance commitments to issue policies in favor of the Owner Trustee and the Agent with respect to each Property being acquired on such Property Closing Date, such policies being in form and substance reasonably acceptable to the Owner Trustee and the Agent, with such title exceptions thereto as are reasonably acceptable to the Owner Trustee and the Agent; and the Lessee shall deliver to the Owner Trustee and the Agent, as soon as possible after such Property Closing Date, the final title insurance policies for each such Property, taking no specific exception for any Lien filed on account of materials furnished or labor performed in connection with the Property, and otherwise showing no additional exceptions to coverage (other than those exceptions to title constituting Permitted Encumbrances); (ix) the Lessee shall have delivered to the Agent and the Owner Trustee a "Phase I" environmental site assessment with respect to each such Property, prepared by an independent recognized professional reasonably acceptable to the Agent and the Owner Trustee and in a form and substance that is reasonably acceptable to the Agent and the Owner Trustee; (x) the Lessee shall have delivered to the Agent and the Owner Trustee a survey of each such Property, prepared by an independent recognized professional meeting the then current minimum standard detail requirements for American Land Title Association/American Congress of Surveying and Mapping (ALTA/ACSM) Land Title Surveys certified to the Agent and otherwise reasonably acceptable to the Agent; (xi) the Lessee shall have caused to be delivered to the Agent and the Owner Trustee a legal opinion (in form and substance reasonably satisfactory to the Agent and the Owner Trustee) from counsel located in the state where each such Property is located or, if the Agent and the Owner Trustee have previously received an opinion from counsel in such state, the Agent and the Owner Trustee -5- 10 (in their discretion) may accept an update or a reaffirmation of the previous opinion, in each case addressed to each Lender; (xii) the Owner Trustee and the Agent shall be satisfied, in their sole discretion, that the acquisition or ground leasing of each such Property and the execution of the Mortgage Instrument and the other Security Documents will not adversely affect in any material respect the rights of the Owner Trustee, the Holders, the Agent or the Lenders under or with respect to the Operative Agreements in effect as of such Property Closing Date; (xiii) the Lessee shall have delivered to the Agent and the Owner Trustee, with respect to each such Property, invoices for the various Transaction Expenses and other fees, expenses and disbursements referenced in Section 9.1 (a) or (b) of this Agreement; (xiv) the Lessor shall have delivered to the Agent a Mortgage Instrument and Lender Financing Statements with respect to each such Property in a form reasonably acceptable to the Agent and Lessee; (xv) the Lessee shall have delivered to the Lessor with respect to each such Property, a Lease Supplement and a memorandum regarding the Lease and such Lease Supplement (such memorandum to be substantially in the form attached to the Lease as Exhibit C, and in each case in form suitable for recording); (xvi) the Lessee shall have delivered to the Lessor with respect to each such Property Lessor Financing Statements (or continuation statements, as applicable) executed by the Lessee; (xvii) if any such Property is subject to a Ground Lease, the Lessee shall have caused a lease memorandum (in form and substance satisfactory to the Agent) to be delivered to the Agent for such Ground Lease; (xviii) counsel for the ground lessor of each such Property subject to a Ground Lease shall have issued to the Lessor, the Agent and the Holders, an opinion satisfactory to the Agent; (xix) all necessary Governmental Actions required by any law or regulation enacted, imposed or adopted on or prior to each such date or by any change in facts or circumstances on or prior to each such date, shall have been obtained or made and be in full force and effect; -6- 11 (xx) the Lessee shall cause (i) Uniform Commercial Code lien searches, tax lien searches and judgment lien searches regarding each of the Lessee and the Lessor to be conducted (and copies thereof to be delivered to the Agent and the Owner Trustee) in the state and county (or other jurisdiction) in which such Property is located, by a nationally recognized search company acceptable to the Owner Trustee and the Agent and (ii) the liens referenced in such lien searches which are objectionable to the Owner Trustee or the Agent to be either removed or otherwise handled in a manner reasonably satisfactory to the Owner Trustee and the Agent; (xxi) by the later to occur of (A) each Property Closing Date or (B) the date that is ninety (90) days after the Initial Closing Date or any Property Closing Date thereafter, as applicable, the Agent shall have received an Appraisal for the Property or Properties described in the applicable Requisition showing that each such Property has a value at least equal to ninety-five percent (95%) of the expected total Property Cost of such Property and all Improvements constructed thereon; and (xxii) the Lessee will deliver to the Agent, and the Lessor an Officer's Certificate in the form attached hereto as Exhibit B - specifying (a) with respect to the Property for which a Requisition is submitted, the Completion Date for the construction of Improvements at the Property, (b) the aggregate Property Cost for the Property and (c) if any of the Property consists of Tangible Personal Property, a separate statement of the Property Cost attributable to such Tangible Personal Property. Such Officer's Certificate shall also include, in form and in detail reasonably acceptable to the Agent and the Holders, a summary of the Property Cost figures and a certification to the effect that all Improvements have been made in accordance with all applicable material Legal Requirements, in a good and workmanlike manner and otherwise in substantial compliance with the standards and practices of the Lessee with respect to similar properties and improvements owned by the Lessee, and that no consent or approval of any Person is required for such Improvements except for consents and approvals which have already been obtained and consents and approvals the lack of which would not be reasonably likely to (A) materially and adversely affect the use and occupancy of the Improvements or (B) have a Material Adverse Effect. 5.4. Inspection of Documents; Hold Harmless; Removal of Properties. Any document or item (including without limitation any environmental report) delivered to the Agent shall be available for inspection at any time during ordinary business hours upon reasonable notice by any Lender or Holder. The Agent shall not incur any liability to any Lender, any Holder, the Owner Trustee or any other Person (and each Lender, each Holder, the Owner Trustee, and the Lessee hereby holds the Agent harmless from any such liability) as a result of any such document or item, any information contained therein, the failure to receive any such document, or the Agent's -7- 12 approval of any Property. In the event the Majority Lenders reasonably determine that any environmental site assessment reveals an Environmental Violation and they or the Agent so notify the Lessee, then the Lessee shall remedy or purchase such Property in accordance with Section 15.2 of the Lease. SECTION 6. Conditions of the Initial Closing. 6.1. Conditions to the Lessor's and the Holders' Obligations. The obligations of the Lessor and the Holders to consummate the transactions contemplated by this Agreement are subject to (i) the accuracy and correctness in all material respects on the Initial Closing Date of the representations and warranties of the other parties hereto contained herein, (ii) the accuracy and correctness in all material respects on the Initial Closing Date of the representations and warranties of the other parties hereto contained in any other Operative Agreement or certificate delivered pursuant hereto or thereto, (iii) the performance in all material respects by the other parties hereto of their respective agreements contained herein and in the other Operative Agreements and to be performed by them on or prior to the Initial Closing Date and (iv) the satisfaction, or waiver by the Lessor and the Holders, of all of the following conditions on or prior to the Initial Closing Date: (a) Each of the Operative Agreements shall have been duly authorized, executed and delivered by the parties thereto, other than the Lessor and the Holders, and shall be in full force and effect, and no Default or Event of Default shall exist thereunder (both before and after giving effect to the transactions contemplated by the Operative Agreements), and the Lessor shall have received a fully executed copy of each of the Operative Agreements (other than the Notes of which it shall have received specimens). The Operative Agreements (or memoranda thereof), any supplements thereto and any financing statements and fixture filings in connection therewith required under the Uniform Commercial Code shall have been filed or shall be promptly filed, if necessary, in such manner as to enable the Lessee's counsel to render its opinion referred to in Section 6.1(g) hereof; (b) All taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of the Operative Agreements shall have been paid or provision for such payment shall have been made to the reasonable satisfaction of the Lessor and the Agent; (c) No action or proceeding shall have been instituted, nor shall any action or proceeding be threatened, before any Governmental Authority, nor shall any order, judgment or decree have been issued or proposed to be issued by any Governmental Authority (i) to set aside, restrain, enjoin or prevent the full performance of this Agreement, any other Operative Agreement or any transaction contemplated hereby or thereby or (ii) which is reasonably likely to have a Material Adverse Effect; -8- 13 (d) In the reasonable opinion of the Lessor and the Holders and their counsel, the transactions contemplated by the Operative Agreements do not and will not violate any material Legal Requirements and do not and will not subject the Lessor or the Holders to any materially adverse regulatory prohibitions or constraints; (e) The Lessor and the Agent shall each have received an Officer's Certificate of the Lessee, dated as of the Initial Closing Date, in the form attached hereto as Exhibit D or in such other form as is reasonably acceptable to such parties stating that (i) each and every representation and warranty of the Lessee contained in the Operative Agreements to which it is a party is true and correct in all material respects on and as of the Initial Closing Date; (ii) no Default or Event of Default has occurred and is continuing under any Operative Agreement; (iii) each Operative Agreement to which Lessee is a party is in full force and effect with respect to it; and (iv) the Lessee has performed and complied in all material respects with all covenants, agreements and conditions contained herein or in any Operative Agreement required to be performed or complied with by it on or prior to the Initial Closing Date; (f) The Lessor and the Agent shall each have received (i) a certificate of the Secretary or an Assistant Secretary of Lessee in the form attached hereto as Exhibit E or in such other form as is reasonably acceptable to such parties attaching and certifying as to (A) the resolutions of its Board of Directors duly authorizing the execution, delivery and performance by Lessee of each of the Operative Agreements to which it is or will be a party, (B) its certificate of incorporation and by-laws, in each case certified as of a recent date by the Secretary of State of the State of its incorporation, and (C) the incumbency and signature of persons authorized to execute and deliver on its behalf the Operative Agreements to which it is a party and (ii) a good standing certificate from the appropriate officer of each of the State of Texas and the state in which the Lessee's chief executive office is located; and (g) Counsel for the Lessee and the Guarantor reasonably acceptable to the other parties hereto shall have issued to the Lessor, the Agent, the Lenders and the Holders the opinions in the form attached hereto as Exhibit C or in such other form as is reasonably acceptable to such parties. 6.2. Conditions to the Lessee's Obligations. The obligation of the Lessee to consummate the transactions contemplated by this Agreement is subject to (i) the accuracy and correctness on the Initial Closing Date of the representations and warranties of the other parties hereto contained herein, (ii) the accuracy and correctness on the Initial Closing Date of the representations and warranties of the other parties hereto contained in any other Operative Agreement or certificate delivered pursuant hereto or thereto, (iii) the performance by the other parties hereto of their respective agreements contained herein and in the other Operative Agreements, in each case to be performed by them on or prior to the Initial Closing Date, and (iv) -9- 14 the satisfaction or waiver by the Lessee of all of the following conditions on or prior to the Initial Closing Date: (a) Each of the Operative Agreements to be entered into on the Initial Closing Date shall have been duly authorized, executed and delivered by the parties thereto, other than the Lessee, and shall be in full force and effect, and no Default, other than Defaults of the Lessee, shall exist thereunder, and the Lessee shall have received a fully executed copy of each of the Operative Agreements (other than Notes of which it shall have received a specimen); (b) In the reasonable opinion of the Lessee and its counsel, the transactions contemplated by the Operative Agreements do not violate any material Legal Requirements and will not subject Lessee to any materially adverse regulatory prohibitions or constraints; (c) No action or proceeding shall have been instituted nor shall any action or proceeding be threatened, before any Governmental Authority, nor shall any order, judgment or decree have been issued or proposed to be issued by any Governmental Authority (i) to set aside, restrain, enjoin or prevent the full performance of this Agreement, any other Operative Agreement or any transaction contemplated hereby or thereby or (ii) which is reasonably likely to have a Material Adverse Effect; (d) The Lessee and the Agent shall each have received an Officer's Certificate of the Lessor dated as of the Initial Closing Date in the form attached hereto as Exhibit F or in such other form as is reasonably acceptable to Lessee and the Agent, stating that (i) each and every representation and warranty of the Lessor contained in the Operative Agreements to which it is a party is true and correct on and as of the Initial Closing Date; (ii) each Operative Agreement to which the Lessor is a party is in full force and effect with respect to it, and (iii) the Lessor has duly performed and complied with all covenants, agreements and conditions contained herein or in any Operative Agreement required to be performed or complied with by it on or prior to the Initial Closing Date; (e) The Lessee and the Agent shall each have received (i) a certificate of the Secretary, an Assistant Secretary, Trust Officer or Vice President of the Trust Company in the form attached hereto as Exhibit G or in such other form as is reasonably acceptable to Lessee and the Agent, attaching and certifying as to (A) the signing resolutions, (B) its articles of incorporation or other equivalent charter documents, as the case may be, certified as of a recent date by an appropriate officer of the Trust Company, (C) its by-laws and (D) the incumbency and signature of persons authorized to execute and deliver on its behalf the Operative Agreements to which it is a party and (ii) a good standing certificate from the state of incorporation of the Trust Company and, to the extent required by applicable Law, good standing or comparable certificates for the Trust Company or the Owner Trustee from each state in which the Properties are located; and -10- 15 (f) Counsel for the Lessor acceptable to the other parties hereto shall have issued to the Lessee, the Holders, the Lenders and the Agent an opinion in the form attached hereto as Exhibit H or in such other form as is reasonably acceptable to such parties. 6.3. Conditions to the Agent's Obligations. The obligation of the Agent to consummate the transactions contemplated by this Agreement on the Initial Closing Date is subject to (i) the accuracy and correctness on the Initial Closing Date of the representations and warranties of the other parties hereto contained herein, (ii) the accuracy and correctness on the Initial Closing Date of the representations and warranties of the other parties hereto contained in any other Operative Agreement or certificate delivered pursuant hereto or thereto, (iii) the performance by the other parties hereto of their respective agreements contained herein and in the other Operative Agreements, in each case to be performed by them on or prior to the Initial Closing Date, and (iv) the satisfaction, or waiver by the Agent, of all of the following conditions on or prior to the Initial Closing Date: (a) Each of the Operative Agreements to be entered into on the Initial Closing Date shall have been duly authorized, executed and delivered by the parties thereto, other than the Agent, and shall be in full force and effect, and no Default or Event of Default shall exist thereunder (both before and after giving effect to the transactions contemplated by the Operative Agreements), and the Agent shall have received a fully executed copy of each of the Operative Agreements (including the Notes). The Operative Agreements (or memoranda thereof), any supplements thereto and any financing statements and fixture filings in connection therewith required under the Uniform Commercial Code shall have been filed or shall be promptly filed, if necessary, in such manner as to enable the Lessor's counsel to render its opinion referred to in Section 6.2(f) hereof; (b) The satisfaction of each of the conditions set forth in Sections 6.1(b), (c), (e) and (f) and Sections 6.2(d), (e) and (f) hereof; and (c) In the reasonable opinion of the Agent and its counsel, the transactions contemplated by the Operative Agreements do not and will not violate any material Legal Requirements and do not and will not subject the Agent to any materially adverse regulatory prohibitions or constraints. SECTION 7. Representations and Warranties on the Initial Closing Date. 7.1. Representations and Warranties of the Initial Holders. Effective as of the Initial Closing Date, each Holder on such date represents and warrants to each of the other parties hereto that: (a) It is a national banking association, or a corporation that is a commercial finance company, in each case duly organized, validly existing and in good standing -11- 16 under the laws of the United States or the country or state of its organization and has the power and authority to carry on its business as now conducted and to enter into and perform its obligations under each Operative Agreement to which it is or will be a party and each other agreement, instrument and document to be executed and delivered by it on or before each Closing Date in connection with or as contemplated by each such Operative Agreement to which it is or will be a party; (b) The execution, delivery and performance of each Operative Agreement to which it is or will be a party have been duly authorized by all necessary action on its part and neither the execution and delivery thereof, nor the consummation of the transactions contemplated thereby, nor compliance by it with any of the terms and provisions thereof (i) requires or will require any approval of the stockholders of, or approval or consent of any trustee or holder of any indebtedness or obligations of, such Holder which have not been obtained and be in full force and effect, (ii) violates or will violate any Legal Requirement applicable to or binding on it (except no representation or warranty is made as to any Legal Requirement to which it may be subject solely as a result of the activities of the Lessee) as of the date hereof, (iii) violates or will violate or result in any breach of or constitute any default under, or result in the creation of any Lien upon any Property or any of the Improvements (other than Liens created by the Operative Agreements) under its certificate of incorporation or other equivalent charter documents, or any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement or other agreement or instrument to which it is a party or by which it or its properties is bound or affected or (iv) requires or will require any Governmental Action by any Governmental Authority (other than arising solely by reason of the business, condition or activities of the Lessee or any Affiliate thereof or the construction or use of the Properties or the Improvements); (c) There is no action or proceeding pending or, to its knowledge, threatened against it before any Governmental Authority that questions the validity or enforceability of any Operative Agreement to which it is or will become a party or that, if adversely determined, would materially and adversely affect its ability to perform its obligations under the Operative Agreements to which it is a party; (d) It has not assigned or transferred any of its right, title or interest in or under the Lease except in accordance with the Operative Agreements; (e) No Default or Event of Default under the Operative Agreements attributable to it has occurred and is continuing; (f) It is not a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" of a "holding company" or a "public utility" within the meaning of the Public Utility Holding Company Act of 1935, as amended, or a "public utility" within the meaning of the Federal Power Act, as amended. It is not an -12- 17 "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act or an "investment adviser" within the meaning of the Investment Advisers Act of 1940, as amended; and (g) It is acquiring its interest in the Trust Estate for its own account for investment and not with a view to any distribution (as such term is used in Section 2(11) of the Securities Act) thereof, and if in the future it should decide to dispose of its interest in the Trust Estate, it understands that it may do so only in compliance with the Securities Act and the rules and regulations of the Securities and Exchange Commission thereunder and any applicable state securities laws. Neither it nor anyone authorized to act on its behalf has taken or will take any action which would subject, as a direct result of such action alone, the issuance or sale of any interest in any Property, the Trust Estate or the Lease to the registration requirements of Section 5 of the Securities Act. No representation or warranty contained in this Section 7.1(g) shall include or cover any action or inaction of the Lessee or any Affiliate thereof whether or not purportedly on behalf of the Holders, the Owner Trustee or any of their Affiliates. 7.2. Representations and Warranties of the Owner Trustee. Effective as of the Initial Closing Date, Trust Company in its individual capacity and as the Owner Trustee, as indicated, represents and warrants to each of the other parties hereto as follows, provided, that the representations in paragraphs (g), (h), (i) and (j) below are made solely in its capacity as the Owner Trustee: (a) It is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America and has the power and authority to enter into and perform its obligations under the Trust Agreement and (assuming due authorization, execution and delivery of the Trust Agreement by the Holders) has the corporate and trust power and authority to act as the Owner Trustee and to enter into and perform the obligations under each of the other Operative Agreements to which Trust Company or the Owner Trustee, as the case may be, is or will be a party and each other agreement, instrument and document to be executed and delivered by it on or before each Closing Date in connection with or as contemplated by each such Operative Agreement to which Trust Company or the Owner Trustee, as the case may be, is or will be a party; (b) The execution, delivery and performance of each Operative Agreement to which it is or will be a party, either in its individual capacity or (assuming due authorization, execution and delivery of the Trust Agreement by the Holders) as the Owner Trustee, as the case may be, has been duly authorized by all necessary action on its part and neither the execution and delivery thereof, nor the consummation of the transactions contemplated thereby, nor compliance by it with any of the terms and provisions thereof (i) requires or will require any approval of its stockholders, Certificate holders or any approval or consent of any trustee or holders of any of its indebtedness or -13- 18 obligations, (ii) violates or will violate any current law, governmental rule or regulation relating to its banking or trust powers, (iii) violates or will violate or result in any breach of or constitute any default under, or result in the creation of any Lien upon any of its property under, (A) its charter or by-laws, or (B) any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement or other agreement or instrument to which it is a party or by which it or its properties may be bound or affected, which violation, breach, default or Lien under clause (B) would materially and adversely affect its ability, in its individual capacity or as Owner Trustee, to perform its obligations under the Operative Agreements to which it is a party or (iv) requires or will require any Governmental Action by any Governmental Authority regulating its banking or trust powers; (c) The Trust Agreement and, assuming the Trust Agreement is the legal, valid and binding obligation of the Holders, each other Operative Agreement to which the Trust Company or the Owner Trustee, as the case may be, is or will be a party have been, or will be, duly executed and delivered by Trust Company or the Owner Trustee, as the case may be, and the Trust Agreement and each such other Operative Agreement to which Trust Company or the Owner Trustee, as the case may be, is a party constitutes, or upon execution and delivery will constitute, a legal, valid and binding obligation enforceable against Trust Company or the Owner Trustee, as the case may be, in accordance with the terms thereof; (d) There is no action or proceeding pending or, to its knowledge, threatened to which it is or will be a party, either in its individual capacity or as the Owner Trustee, before any Governmental Authority that, if adversely determined, would materially and adversely affect its ability, in its individual capacity or as Owner Trustee, to perform its obligations under the Operative Agreements to which it is a party or would question the validity or enforceability of any of the Operative Agreements to which it is or will become a party; (e) It has not assigned or transferred any of its right, title or interest in or under the Lease except in accordance with the Operative Agreements; (f) No Default or Event of Default under the Operative Agreements attributable to it has occurred and is continuing; (g) Neither the Owner Trustee nor any Person authorized by the Owner Trustee to act on its behalf has offered or sold any interest in the Trust Estate or the Notes, or in any similar security relating to a Property, or in any security the offering of which for the purposes of the Securities Act would be deemed to be part of the same offering as the offering of the aforementioned securities to, or solicited any offer to acquire any of the same from, any Person other than, in the case of the Notes, the Lenders, and neither the Owner Trustee nor any Person authorized by the Owner Trustee -14- 19 to act on its behalf will take any action which would subject, as a direct result of such action alone, the issuance or sale of any interest in the Trust Estate or the Notes to the provisions of Section 5 of the Securities Act, or require the qualification of any Operative Agreement under the Trust Indenture Act of 1939, as amended; (h) The Owner Trustee's chief place of business, chief executive office and office where the documents, accounts and records relating to the transactions contemplated by this Agreement and each other Operative Agreement are kept are located at First Security Bank, N.A., 79 South Main Street, Salt Lake City, Utah, 84111; (i) The Owner Trustee is not engaged principally in, and does not have as one of its important activities, the business of extending credit for the purpose of purchasing or carrying any margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System of the United States), and no part of the proceeds of the Loans or the Holder Fundings will be used by it to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or for any purpose that violates, or is inconsistent with, the provisions of Regulations G, T, U, or X of the Federal Reserve Board; and (j) The Owner Trustee is not a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" of a "holding company" or a "public utility" within the meaning of the Public Utility Holding Company Act of 1935, as amended, or a "public utility" within the meaning of the Federal Power Act, as amended. The Owner Trustee is not an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act or an "investment adviser" within the meaning of the Investment Advisers Act of 1940, as amended. 7.3. Representations and Warranties of the Lessee. The Lessee, in its capacity as Lessee and Guarantor, represents and warrants to each of the other parties hereto that the following shall be true and correct on and as of each of the Initial Closing Date, each Property Closing Date and the date of each Funding unless otherwise indicated: (a) Corporate Existence; Authority. The Lessee is a duly organized, and validly existing corporation. The Lessee is in good standing under the laws of the State of Delaware, is duly qualified and authorized to do business in the states where any Properties are located and has all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except for such licenses, authorizations, consents and approvals the lack of which would not be reasonably likely to have a Material Adverse Effect. (b) Corporate and Governmental Authorization; No Contravention. The execution, delivery and performance by the Lessee of this Agreement and the other Operative Agreements to which it is a party are within its corporate powers, have been -15- 20 duly authorized by all necessary corporate action of the Lessee, require no action by or in respect of, or filing with, any governmental body, agency or official (except for those required in connection with the Spin-Off) and do not contravene, or constitute a default under, any provision of applicable Law or of the certificate of incorporation or by-laws of the Lessee or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Lessee or result in the creation or imposition of any Lien on any asset of the Lessee (except as contemplated by the Operative Agreements and do not or will not require any approval or consent of the Lessee, or any trustee or holders of any indebtedness or obligations of Lessee which have not been duly obtained). (c) Binding Effect. This Agreement and the other Operative Agreements to which the Lessee is a party constitute the legal, valid and binding obligations of the Lessee, enforceable against it in accordance with their respective terms except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. (d) Financial Condition. (1) The combined financial statements of the Lessee and its Subsidiaries dated as of December 31, 1998, and the related consolidated statements of income or operations, shareholders' equity and cash flows for the fiscal year ended on that date reported on by Arthur Andersen LLP and set forth in the Lessee's filings on Form 10 and Form S-4 (as referenced in the definition of Spin-Off), and (2) the interim combined financial statements of the Lessee and its Subsidiaries dated June 30, 1999, and the related consolidated statements of income or operations, shareholders' equity and cash flows for the fiscal quarter ended on that date reported on by Arthur Andersen LLP and set forth in the Lessee's filings on Form 10 and Form S-4 (as referenced in the definition of Spin-Off): (i) were prepared in accordance with GAAP consistently applied for the periods covered thereby, except as otherwise expressly noted therein (subject, in the case of the unaudited interim statements, to ordinary, good faith year-end audit adjustments); and (ii) fairly present (subject, in the case of the unaudited interim statements, to ordinary, good faith year-end audit adjustments) the financial condition of the Company and its Subsidiaries as of the dates thereof and the results of operations for the periods covered thereby. (3) Since June 30, 1999, there has been no Material Adverse Effect with respect to the Lessee. -16- 21 (e) Litigation. Except as disclosed in Schedule II, there are no actions, suits, proceedings, claims, disputes pending or, to the Knowledge of the Lessee, threatened, at law, in equity, in arbitration or before any Governmental Authority, against the Lessee or any Subsidiary or any of their respective properties which: (i) purport to affect or pertain to this Agreement or any other Operative Agreement, or any of the transactions contemplated hereby or thereby; or (ii) if determined adversely to the Lessee or its Subsidiaries, could in the reasonable judgment of the Lessee be expected to have a Material Adverse Effect. No injunction, writ, temporary restraining order or other order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Operative Agreements, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided. (f) Status. The Lessee or any Subsidiary is not an "investment company" or controlled by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, nor is it subject to regulation under the Investment Advisors Act, the Public Utility Holding Company Act of 1935, the Federal Power Act or the Interstate Commerce Act, or under any other state or Federal Law limiting its ability to execute and deliver any Operative Agreement or perform its obligations thereunder. (g) Compliance with Margin Regulations. No proceeds of any Loan or Holder Funding have been or will be used in violation of any applicable Law (including, without limitation, Regulation D, Regulation G, Regulation T, Regulation U and Regulation X of the Federal Reserve Board, as in effect from time to time), giving effect to the transactions contemplated to be consummated on the Initial Closing Date and on the date of each subsequent Loan and Holder Funding. (h) No Default. No Default, Event of Default or Major Environmental Event has occurred and is continuing. (i) Consents. The execution, delivery and performance by the Lessee of each Operative Agreement to which it is a party and any other agreement which it has entered into in connection with the transactions contemplated thereby, the consummation of the transactions contemplated thereby and its compliance with the terms thereof does not require the consent of any Person or the approval or authorization of, or filing, registration or qualification with, any Federal, state or local governmental authority on the part of the Lessee as a condition to such execution, delivery, performance and compliance except those consents which have already been obtained by the Lessee and copies of which have been delivered to the Lessor, the Agent, the Lenders and the Holders, and those consents that will be obtained on or before the Initial Closing Date. -17- 22 (j) Title to the Property. (i) On and after the Property Closing Date for each Property, the Lessor will have good and marketable title to such Property (other than any Land subject to a Ground Lease), together with the right to use any necessary easements or rights-of-way or similar property rights, subject only to Permitted Encumbrances. (ii) On and after the Property Closing Date for each Property that is subject to a Ground Lease, the Lessor will have a good and marketable leasehold interest in the Land that is subject to a Ground Lease, together with the right to use any necessary easements or rights-of-way or similar property rights, subject only to Permitted Encumbrances. (iii) On or after the Property Closing Date for each Property, the Lessee does not have actual knowledge or written notice that such Property contains any defect or feature making it unsuitable for the proper operation thereof. (k) Compliance with Law. The Lessee is not in violation of any Law in any material respect with respect to any Property or any part thereof, or with respect to its leasing, ownership, or operation of any Property or any part thereof, or with respect to the conduct of its business relating to any Property or any part thereof in each case to the extent the violation of such Law would have a Material Adverse Effect. To the Knowledge of the Lessee, the Lessee has not received any notice of, or citation for, any violation of any Law which has not been resolved, which notice or citation relates to the ownership, leasing or operation of any Property or any part thereof and the violation of which would have a Material Adverse Effect. The Lessee is in compliance in all material respects with all applicable Laws, the violation of which would have a Material Adverse Effect. (l) Recordation and Filing. On and as of the Property Closing Date for each Property, the memoranda of Ground Lease, memoranda of Lease, and the Mortgage Instruments and all Lender Financing Statements and Lessor Financing Statements, to be recorded or filed, shall have been duly recorded, published, registered and filed by the Lessee and are in a form sufficient to create or publish notice of the interests in such Property or any part thereof purported to be created thereby. Upon the recordation of the memoranda of Ground Lease, the memoranda of Lease and the Mortgage Instruments and the filing of such Lender Financing Statements and Lessor Financing Statements, each to be recorded or filed in such places as the Lessee shall notify the Agent and the Lessor prior to such Property Closing Date, such documents will have been recorded or filed in each place in which recording or filing is required to publish notice, under applicable Law, of the interests created thereby and to protect the validity and effectiveness thereof, and all Taxes, fees and other public charges payable in connection with the publishing, -18- 23 filing and recordation of the memoranda of Ground Lease, the memoranda of Lease, the Mortgage Instruments, the Lender Financing Statements and Lessor Financing Statements will have been paid in full by the Lessee. (m) Rights to Property, Etc. (i) On and after the Property Closing Date with respect to any Property, the Lessor has the right to use all rights-of-way, easements and real property licenses, environmental allowances, rights in real property (including, without limitation, fixtures and appurtenances), utilities and other services necessary for the day-to-day operation of the Property and the construction of the Improvements and (A) such rights-of-way, easements, licenses, environmental allowances, utilities and other services are valid and in full force and effect in accordance with their terms, (B) there is presently no default with respect to any such rights-of-way, easements, licenses, utilities and other services by the Lessee or Lessor or, to the knowledge of the Lessee, by any other Person, and (C) all utility services necessary for the construction of the Improvements and operation of the Property for their intended purposes are or will be available at the boundaries of the Property. (ii) On and after the Initial Closing Date, none of the Permitted Encumbrances will interfere with the use or possession of any Property or any part thereof or any other asset used in connection therewith or the use of or the exercise by the Agent of its rights either under any Operative Agreement or to the Property. (iii) On and after the Property Closing Date with respect to any Property, except for the Permitted Encumbrances, each Property will be situated wholly within the boundary lines of the respective Land and will not encroach upon any contiguous or adjoining property; no Property or any part thereof is considered part of a larger zoning or tax lot; the Improvements will not encroach on any easements or rights-of-way affecting any Property or any part thereof, will not violate any rights granted thereunder or any covenants or restrictions affecting any Property, or any part thereof, and any future violation will not result in a reversion or forfeiture of title, right of re-entry or power of termination; and the easements, rights-of-way, covenants and restrictions affecting any Property or any part thereof will not interfere with the use or occupancy of any Property or any part thereof, or any asset owned or used in connection therewith, nor will the exercise of rights or remedies thereunder result in any damage to any Property or diminution of value of any Property, or any part thereof. -19- 24 (n) Environmental Compliance. Subject to Section 15.2 of the Lease: (i) each Property complies in all material respects with all Environmental Laws; all necessary Environmental Permits have been obtained and are in effect for each Property and no circumstances exist that could be reasonably likely to (A) form the basis of an Environmental Action against any Property or (B) cause any Property to be subject to any restrictions on ownership, occupancy, industrial use or transferability under any Environmental Law; and (ii) except as a result of the Temple Property's RCRA status or the USEPA's RCRA Facility assessment (as reflected, in either case, in (A) the "Phase I" environmental site assessment prepared by Roy P. Weston, Inc., a copy of which has been delivered by the Lessee to the Agent, or (B) portions of the "Phase I" and "Phase II" environmental site assessments prepared by CH2M Hill relating to the Temple Property, copies of which have been delivered by the Lessee to the Agent), neither any Property nor any part thereof is listed or proposed for listing on the NPL or on CERCLIS or any analogous state list of sites requiring investigation or cleanup; (iii) all Hazardous Materials generated, used, treated, handled or stored at or transported to or from any Property or any part thereof by the Lessee, the Guarantor or any of its Subsidiaries, have been disposed of in compliance with all Environmental Laws and Environmental Permits; (iv) except with respect to the Canadaiqua Property, the Lessee has not received any written or other notice, mandate, order, Lien or request which remains pending under an Environmental Law concerning any Property or any part thereof or relating to an alleged violation of an Environmental Law concerning any Property or any part thereof or relating to any potential adverse action in any way involving environmental, health or safety matters affecting any Property or any part thereof; (v) except with respect to the Canadaiqua Property, there is no proceeding pending or, to the knowledge of the Lessee, threatened in writing, against the Lessee, by any Federal, state, or local court, tribunal, administrative agency, department, commission, board or other authority or instrumentality with respect to the presence on or release of any Hazardous Material from any Property or any part thereof; and (vi) except with respect to the release at or near the Canadaiqua Property reflected in the Phase II environmental reports prepared by Dames & Moore and Sear Brown, copies of which have been delivered by the Lessee to the Agent, no Hazardous Materials have been released from or on any Property or any -20- 25 part thereof for which remedial action could reasonably be required under any Environmental Law or may be necessary to prevent or eliminate a "significant risk to human health or the environment" that have not already been remediated (as defined in Section 15.2 of the Lease). (o) No Condemnation, Casualty or Force Majeure. Neither any Property nor any part thereof has suffered a Condemnation or a Casualty or any other damage or destruction which renders such Property unusable in whole or in material part, and, under applicable Law, each Property may be used for the purposes contemplated by the Lessee in accordance with the Lease. No Force Majeure Event has occurred and is continuing which would adversely affect the operation of any Property or any material part thereof or the construction, renovation and operation of the Improvements. (p) Permits. All Permits (including Environmental Permits) that are or will become Applicable Permits have been obtained, except Applicable Permits which are permitted by Law to be obtained after the Property Closing Date with respect to any Property or after any date on which any Funding shall occur, as applicable. All such Permits that are or will become Applicable Permits are in proper form, in full force and effect and not subject to any further appeal or further contest or to any unsatisfied condition that may allow modification or revocation. (q) Insurance. The Lessee is in compliance with all Insurance Requirements, and all insurance policies required by Section 14 of the Lease are in full force and effect. (r) Taxes. The Lessee and its Subsidiaries have filed or caused to be filed all United States federal income tax returns and all other material domestic tax returns which to the Knowledge of the Lessee are required to be filed (as of each applicable date) and have paid or provided for the payment before the same became delinquent, all Taxes due pursuant to such federal income tax returns and other material domestic tax returns other than those Taxes being contested in good faith by appropriate proceedings. The charges, accruals and reserves on the books of the Lessee and its Subsidiaries in respect of Taxes are, in the opinion of the Lessee, adequate to the extent required by GAAP. There is no proposed tax assessment against the Lessee or any Subsidiary that would, if made, have a Material Adverse Effect. (s) No Material Adverse Event. No applicable Law prohibits, and no litigation, governmental investigation or other proceeding is pending or, to the Knowledge of the Lessee threatened, in which there is a reasonable possibility of an unfavorable judgment, decree, order or other determination which could prevent or make unlawful, or impose any material adverse condition upon, any Property or the acquisition, construction, use, ownership, operation or leasing thereof. -21- 26 (t) Full Disclosure. No statement or material furnished by or on behalf of the Lessee to the Agent, the Lenders, the Holders, or the Lessor, in connection with any Operative Agreements or any transaction contemplated thereby contains any untrue statement of a material fact or omits a material fact necessary to make the statements contained therein or herein not misleading. (u) Fair Price. The Properties to be acquired are being acquired at a price that is not in excess of fair market value, and such Properties consist of (i) unimproved Land, or (ii) Land and existing Improvements thereon which Improvements are either suitable for occupancy at the time of acquisition or will be removed, renovated or modified in accordance with the terms of this Agreement, or (iii) Equipment. Each of the Properties is located at the site set forth on the applicable Requisition, which is in one of the Approved States. (v) Flood Hazard. Except for certain portions of the Covington Property and the Temple Property, no portion of any Property being acquired by the Lessor on any Property Closing Date is located in an area identified as a special flood hazard area by the Federal Emergency Management Agency or other applicable agency, or if any such Property is located in an area identified as a special flood hazard area by any such agency, then flood insurance has been obtained for such Property to the extent required by Section 14.2(b) of the Lease and in accordance with the National Flood Insurance Act of 1968, as amended. (w) Bankruptcy, Etc. The Lessee has not admitted in writing its inability to pay its debts generally or has not made a general assignment for the benefit of creditors; no proceeding has been instituted by or against the Lessee seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property the Lessee taken any corporate action to authorize any of the actions set forth above in this subsection (w). (x) Conditions Precedent. All conditions precedent contained in this Agreement and in the other Operative Agreements relating to each Funding have been substantially satisfied on the date of such Funding. (y) Governmental Authorization. Except those required in connection with the Spin-Off, no approval, consent, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority (other than any of the foregoing which has been obtained or made and is in full force and effect) is necessary or required in connection with the execution, delivery or performance by the Lessee of this Agreement or any other Operative Agreement. -22- 27 (z) ERISA Compliance. (i) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law. Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS, and to the Knowledge of the Lessee, nothing has occurred which would cause the loss of such qualification. The Lessee and each ERISA Affiliate has made all required contributions to any Plan subject to Section 412 of the Code and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan. (ii) There are no pending or, to the Knowledge of Lessee, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. (iii) (a) No ERISA Event has occurred or is reasonably expected to occur; (b) no contribution failure has occurred with respect to a Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; (c) no Pension Plan has any material Unfunded Pension Liability; (d) neither the Lessee nor any ERISA Affiliate has incurred, or reasonably expects to incur, any material liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (e) neither the Lessee nor any ERISA Affiliate has incurred, or reasonably expects to incur, any material liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (f) neither the Lessee nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA. (aa) Material Subsidiaries. Each of the Material Subsidiaries is a corporation duly incorporated, validly existing and in good standing, in each case under the laws of its jurisdiction of incorporation, except where failure of a Material Subsidiary of the Lessee to be duly incorporated, validly existing and in good standing would not have a Material Adverse Effect. (bb) The Lessee and its Subsidiaries have reviewed the areas within their business and operations which could be adversely affected by, and have developed programs to address on a timely basis, the "Year 2000 Problem" (that is, the risk that computer applications used by the Lessee may be unable to recognize and perform properly date sensitive functions involving certain dates prior to any date after December 31, 1999). Based on such review and programs, -23- 28 the Lessee reasonably believes that the "Year 2000 Problem" will not result in a Material Adverse Effect. (cc) Solvency, etc. On the Execution Date, and immediately prior to and after giving effect to each Borrowing hereunder and the use of the proceeds thereof, (a) the Lessee's assets will exceed its liabilities and (b) the Lessee will be solvent, will be able to pay its debts as they mature, will own property with fair saleable value greater than the amount required to pay its debts and will have capital sufficient to carry on its business as then constituted. 7.4. Representations and Warranties of the Agent. Effective as of the Initial Closing Date, the Agent represents and warrants to each of the other parties hereto that: (a) It is a national banking association duly organized and validly existing under the laws of the United States of America and has the full power and authority to enter into and perform its obligations under this Agreement and each other Operative Agreement to which it is or will be a party; (b) The execution, delivery and performance by the Agent of this Agreement and each other Operative Agreement to which it is or will be a party are not, and will not be, inconsistent with the articles of incorporation or by-laws or other charter documents of the Agent, do not and will not contravene any applicable Law of the State of New York or of the United States of America governing its activities and will not contravene any provision of, or constitute a default under any indenture, mortgage, contract or other instrument to which it is a party or by which it or its properties are bound, or require any consent or approval of any Governmental Authority under any applicable law, rule or regulation of the State of New York or any federal law, rule or regulation of the United States of America governing its activities; and (c) Each of this Agreement and each other Operative Agreement to which it is a party has been, or when executed and delivered will be, duly authorized by all necessary corporate action on the part of the Agent and has been, or on such Closing Date will be, duly executed and delivered by the Agent. SECTION 8. General Covenants of the Lessee and the Guarantor. 8.1. Covenants of the Lessee. (a) Information. The Lessee shall deliver to the Agent, for distribution to the Lessor, Lenders and Holders, in form and detail satisfactory to the Lessor, Lenders and the Holders (it being understood that for purposes hereof, the form and detail required by the SEC for annual and quarterly reports filed pursuant to the Exchange Act shall be deemed satisfactory): -24- 29 (i) as soon as available, but not later than 90 days after the end of each fiscal year, a copy of the audited consolidated balance sheet of the Lessee and its Subsidiaries as at the end of such year and the related consolidated statements of income or operations, shareholders' equity and cash flows for such year, setting forth in each case in comparative form the figures for the previous fiscal year, and accompanied by the opinion of Arthur Andersen LLC or another nationally-recognized independent public accounting firm ("Independent Auditor"), which opinion (i) shall state that such consolidated financial statements present fairly the Lessee's consolidated financial position for the periods indicated in conformity with GAAP and (ii) shall not be qualified or limited because of a restricted or limited examination by the Independent Auditor of any material portion of the Lessee's or any Subsidiary's records; and (ii) as soon as available, but not later than 50 days after the end of each of the first three fiscal quarters of each fiscal year (commencing with the fiscal quarter ending September 30, 1999), a copy of the unaudited consolidated balance sheet of the Lessee and its Subsidiaries as of the end of such quarter and the related consolidated statements of income, shareholders' equity and cash flows for the period commencing on the first day and ending on the last day of such quarter, and certified by a Responsible Officer as fairly presenting, in accordance with GAAP (subject to ordinary, good faith year-end audit adjustments), the financial position and the results of operations of the Lessee and its Subsidiaries as of such date and for such period. (iii) simultaneously with the delivery of each set of financial statements referred to in clauses (i) and (ii) above, a certificate of an authorized financial officer or accounting officer of the Lessee (1) setting forth in reasonable detail the calculations required to establish whether the Lessee was in compliance with the requirements of Section 8.1(o) as at the date of such financial statements and reconciling such calculations with the information presented in such financial statements, and (2) stating whether to the best knowledge of such officer, there exists on the date of such certificate any Lease Event of Default or any Major Environmental Event or event which, with the giving of notice or lapse of time, or both, would constitute a Lease Event of Default or a Major Environmental Event and, if so, setting forth the details thereof and the action which the Lessee has taken and proposes to take with respect thereto. (iv) as soon as is possible and in any event within five Business Days after a change in, or issuance of, any rating of any of the Lessee's senior unsecured long-term Debt by S&P or Moody's which causes a change in the applicable Rating, notice to the Agent of such change; -25- 30 (v) promptly upon the mailing thereof to the shareholders of the Lessee generally, copies of all financial statements, proxy statements, and other reports so mailed; (vi) promptly after their becoming available, copies of all financial statements and reports that the Lessee sends to its shareholders, and copies of all financial statements and regular, periodic or special reports (including Forms 10K, 10Q and 8K) that the Lessee or any Subsidiary may make to, or file with, the SEC; (vii) promptly after the filing or receiving thereof, copies of all reports and notices which the Lessee files under ERISA with the Internal Revenue Service or the PBGC or the U.S. Department of Labor or which the Lessee receives from such entities other than immaterial regular periodic notices and reports and notices and reports of general circulation; (viii) such other information respecting the condition or operations, financial or otherwise, of the Lessee, in each case as are relevant to the Operative Agreements, as any Holder, the Lessor, the Agent or any Lender may from time to time reasonably request from the Lessee through the Agent; (ix) as soon as possible and in any event within five Business Days after a Responsible Officer of the Lessee has obtained Knowledge thereof, notice of the occurrence of any Lease Event of Default, or any Major Environmental Event continuing on the date of such notice, and a certificate of an authorized financial officer or accounting officer of the Lessee setting forth details of such Lease Event of Default, or such Major Environmental Event and the action which the Lessee has taken and proposes to take with respect thereto; (x) promptly, but in any event within thirty (30) days after the date Lessee has actual knowledge thereof, Lessee shall provide to Lessor written notice of any Reportable Environmental Event. All such notices shall describe in reasonable detail the nature of the Reportable Environmental Event and Lessee's proposed response thereto. In addition, Lessee shall provide to Lessor, within five (5) Business Days of Lessor's request therefor, copies of all material written communications with any Governmental Authority relating to any Environmental Law in connection with any Property. Lessee shall also promptly provide such detailed reports of any material Environmental Claims as may reasonably be requested by Lessor; and (xi) promptly after their becoming available, any management letter issued by the Company's Independent Auditor regarding the "Year 2000" exposure or programs of the Company and its Subsidiaries; -26- 31 (b) Compliance with Environmental Laws. Subject to Section 15.2 of the Lease, the Lessee shall comply, and cause other Persons operating or occupying any Property to comply with all Environmental Laws now existing or hereafter enacted and Environmental Permits with respect to any Property or any part thereof; obtain and renew all Environmental Permits necessary for ownership and operation of any Property or any part thereof; and conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, and remedial or other action necessary to remove and clean up all Hazardous Materials from any Property or any part thereof pursuant to the lawful order of any regulatory authority and generally in accordance with the requirements of all Environmental Laws. (c) Maintenance of Property. The Lessee shall keep all property used or useful in its business in good working order and condition, ordinary wear and tear excepted (and otherwise in compliance with the requirements of the Lease) except where the failure to do so would not have a Material Adverse Effect. (d) Maintenance of Existence. (i) The Lessee shall preserve and maintain its corporate existence or the corporate existence of a successor permitted under Section 8.1(j). (ii) The Lessee shall preserve and maintain its rights (charter and statutory), and franchises except if, in the reasonable business judgment of the Lessee, it is in its best economic interest not to preserve and maintain such rights or franchises and such failure to preserve and maintain such rights or franchises would not materially adversely affect the rights of the Holders, the Lenders, the Agent or the Lessor or the ability of the Lessee to perform its obligations hereunder and under the other Operative Agreements to which it is a party. (e) Compliance with Laws. The Lessee shall comply in all material respects with all applicable Laws (other than Environmental Laws, which are the subject of Section 7.3(n) hereof) rules, regulations and orders, such compliance to include, without limitation, paying before the same become delinquent all United States federal income taxes and all other material domestic taxes, assessments and governmental charges imposed upon it or upon its property except to the extent the necessity of compliance therewith is contested in good faith by appropriate proceedings and the Lessee establishes and maintains adequate reserves if and to the extent required under GAAP. (f) Inspection of Property and Books and Records. The Lessee shall, and shall cause each Subsidiary to, maintain proper books of record and account, in which full, true and correct entries (sufficient to permit the preparation of consolidated financial statements in conformity with GAAP) shall be made of all financial transactions and matters involving the assets and business of the Lessee and such Subsidiary. The Lessee -27- 32 shall permit, and shall cause each Subsidiary to permit, the Administrative Agent, any Lender or their respective representatives, subject to such limitations as the Lessee may reasonably impose to ensure compliance with any applicable legal or contractual restrictions, to visit and inspect the Property, to examine their respective corporate, financial and operating records with respect to the Property, and make copies thereof or abstracts therefrom, and to discuss the affairs, finances and accounts of the Lessee or any Subsidiary in each case as are relevant to the Operative Agreements with their respective officers at such reasonable times during normal business hours as may be reasonably desired, upon reasonable advance notice to the Lessee; provided that when a Lease Event of Default exists the Agent, any Holder or any Lender may do any of the foregoing at any time during normal business hours and without advance notice. (g) Use of Proceeds; Application of Proceeds to Actual Project Costs. The Lessee shall use proceeds of the Loans and Holder Fundings received by it solely to pay for the costs and expenses described in Section 5.1, and none of the Loans or Holder Advances will be used in violation of any applicable Law, including, without limitation, Regulation D, Regulation G, Regulation T, Regulation U and Regulation X of the Federal Reserve Board (as in effect from time to time). (h) Performance. The Lessee shall observe and perform all provisions to be observed or performed by it contained in each Operative Agreement to which it is a party, in accordance with the terms thereof and within the times permitted thereby (including any grace or cure periods provided thereby) and will maintain, or cause to be maintained, the validity and effectiveness as to the Lessee of each such Operative Agreement to which it is a party. (i) Intellectual Property Rights. The Lessee shall preserve, protect and maintain its rights in and to all patents, patent applications, trademarks (whether registered or not), trademark applications, trade names, proprietary computer software, "know-how" and copyrights used or to be used in the ordinary course of the operation of each Property (the "Intellectual Property Rights") in accordance with prudent industry practice. (j) Mergers. The Lessee will not merge or consolidate with any other Person or sell, lease, transfer or otherwise dispose of its property and assets as, or substantially as, an entirety to any Person, unless (i) either the Lessee shall be the continuing or surviving corporation, or the successor or acquiring corporation shall be a solvent corporation organized under the laws of any State of the United States of America and shall expressly assume in writing all of the obligations of the Lessee under this Agreement and other Operative Agreements, including all covenants herein and therein contained, and such successor or acquiring corporation shall succeed to and be substituted for the Lessee with the same effect as if it had been named herein as a party hereto, provided that no such sale shall release the Lessee from any of its obligations and -28- 33 liabilities under this Agreement or other Operative Agreements unless such sale is followed by the complete liquidation of the Lessee and substantially all the assets of the Lessee immediately following such sale are distributed in such liquidation, and (ii) there shall not exist, as to the Lessee as the continuing or surviving corporation or the successor or acquiring corporation, as the case may be, shall not immediately after such merger or consolidation, or such sale or other disposition, any Lease Default, Lease Event of Default or Major Environmental Event. (k) Maintenance of Insurance. The Lessee shall maintain, and shall cause each of its Subsidiaries to maintain, insurance with financially sound and reputable insurance companies or associations (or maintain self-insurance as provided below), in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties as the Lessee; provided that self-insurance by the Lessee shall not be deemed a violation of this covenant to the extent that such self-insurance complies with the limits set forth in Section 14 of the Lease. (l) Payment of Obligations. The Lessee shall, and shall cause each Subsidiary to, pay and discharge, as the same become due and payable: (i) all material tax liabilities, assessments and governmental charges or levies upon it or its properties or assets and (ii) all material claims which, if unpaid, would by law become a Lien upon its property, unless, in each case, the same are being contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by the Lessee or such Subsidiary. (m) Compliance with ERISA. The Lessee shall, and shall cause each of its ERISA Affiliates to: (i) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law; (ii) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; and (iii) make all required contributions to any Plan subject to Section 412 of the Code. (n) ERISA Event. The Lessee shall promptly and in any event within 10 days notice of the occurrence of any of the following events known to the Lessee which affect the Lessee or any ERISA Affiliate, and deliver to the Agent and each Lender a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to the Lessee or any ERISA Affiliate: (i) an ERISA Event; (ii) a contribution failure with respect to a Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; -29- 34 (iii) a material increase in the Unfunded Pension Liability of any Pension Plan; (iv) the adoption of, or the commencement of contributions to, any Pension Plan by the Company or any ERISA Affiliate that, in either case, requires material contributions; or (v) the adoption of any amendment to a Pension Plan if such amendment results in a material increase in contributions or Unfunded Pension Liability. (o) Financial Covenants. Beginning on the Initial Closing Date and continuing so long as any Lender or Holder shall have any Commitment hereunder, or any Loan or Holder Amount shall remain unpaid or unsatisfied, unless the Majority Lenders waive compliance in writing: (i) Minimum Interest Coverage Ratio. The Lessee shall not permit, as of the last day of any fiscal quarter (beginning with the first fiscal quarter ending after the Initial Closing Date), its Interest Coverage Ratio to be less than (a) for each Computation Period ending prior to October 1, 2000, 3.0 to 1 and (b) for each Computation Period ending thereafter, 3.5 to 1. (ii) Maximum Total Debt to EBITDA Ratio. The Lessee shall not at any time permit the Total Debt to EBITDA Ratio to be greater than (a) 3.85 to 1 at any time prior to the earlier of (i) April 1, 2000 and (ii) the consummation of the PCA initial public offering and (b) 3.5 to 1 at any time thereafter. (iii) Limitation on Liens. The Lessee shall not, and shall not suffer or permit any Subsidiary to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien, other than Permitted Encumbrances, upon or with respect to any part of its property, whether now owned or hereafter acquired, other than the following: (1) any Lien existing on the Initial Closing Date and set forth in Schedule III, and any extension, renewal or replacement of any such Lien so long as the principal amount secured thereby is not increased (other than an increase resulting solely from a change in applicable rates of exchange between U.S. Dollars, on the one hand, and any other currency in which such principal amount is denominated, on the other hand) and the scope of the property subject to such Lien is not extended; (2) Liens imposed by law for taxes, assessments or charges of any Governmental Authority for claims not yet due, or to the extent that -30- 35 non-payment thereof is permitted by Section 8.1(l), provided that no notice of Lien has been filed or recorded under the Code; (3) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed by law or created in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith by appropriate proceedings; (4) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation; (5) Liens on the property of the Lessee or any Subsidiary securing (i) the non-delinquent performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, (ii) surety bonds (excluding appeal bonds and other bonds posted in connection with court proceedings or judgments) and (iii) other non-delinquent obligations of a like nature in each case incurred in the ordinary course of business, provided all such Liens in the aggregate would not (even if enforced) cause a Material Adverse Effect; (6) Liens consisting of judgment or judicial attachment liens and liens securing contingent obligations on appeal bonds and other bonds posted in connection with court proceedings or judgments, provided that (i) in the case of judgment and judicial attachment liens, the enforcement of such Liens is effectively stayed and (ii) all such liens in the aggregate at any time outstanding for the Lessee and its Subsidiaries do not exceed $20,000,000; (7) easements, rights-of-way, covenants, conditions, restrictions and other similar encumbrances incurred in the ordinary course of business which, individually or in the aggregate, do not materially interfere with the ordinary conduct of the respective businesses of the Lessee and its Subsidiaries; (8) Liens securing obligations in respect of Capital Leases on assets subject to such leases, provided that such Capital Leases are otherwise permitted hereunder; (9) Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights -31- 36 and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided that (i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Lessee in excess of those set forth by regulations promulgated by the Federal Reserve Board, and (ii) such deposit account is not intended by the Lessee or any Subsidiary to provide collateral to the depository institution; (10) any Lien on property existing at the time of acquisition of such property by the Lessee or a Subsidiary, or Liens to secure the payment of all or part of the purchase price of property upon the acquisition of property by the Lessee or a Subsidiary or to secure any Debt incurred or guaranteed prior to, at the time of, or within one hundred eighty (180) days after, the later of the date of acquisition of such property and the date such property is placed in service, for the purpose of financing all or any part of the purchase price thereof, or Liens to secure any Debt incurred or guaranteed for the purpose of financing the cost to the Lessee or a Subsidiary or improvements to such acquired property; (11) other Liens, in addition to those permitted by clauses (1) through (10), securing Debt or arising in connection with Securitization Transactions; provided that the sum (without duplication) of all such Debt, plus the aggregate investment or claim held at any time by all purchasers, assignees or other transferees of (or of interests in) receivables and other rights to payment in all Securitization Transactions, shall not at any time exceed in the aggregate $200,000,000; and (12) rights of first refusal, rights of Governmental Authorities to approve transfers and other similar restrictions on transfer of any ownership interest of the Lessee or any of its Subsidiaries in any joint venture or similar investment in an entity (other than a Subsidiary) operating primarily outside of the United States. (p) Restrictions on Subsidiaries. The Lessee (a) will not enter into any agreement or understanding pursuant to which Subsidiary and (b) will not, and will not permit any Subsidiary to, enter into any agreement or understanding which by its terms limits or restricts the ability of such Subsidiary to make funds available to the Lessee (whether by way of a dividend or other distribution, by repayment of any inter-company advance or otherwise) if, in any such case referred to in (a) or (b) above, there is, at the time any such agreement is entered into, a reasonable likelihood that all such agreements and understandings referred to in (a) -32- 37 or (b) above, considered together, would materially and adversely affect the ability of the Lessee to meet its obligations as they become due. (q) Limitation on Subsidiary Debt. The Lessee shall not permit its Subsidiaries to create, incur, assume or suffer to exist, or otherwise become or remain directly or indirectly liable with respect to, any Debt (excluding obligations in respect of Securitization Transactions) at any time outstanding in an aggregate amount in excess of the greater of (a) $100,000,000 and (b) 12.5% of Total Debt. (r) Transactions with Affiliates. The Lessee shall not, and shall not permit any Subsidiary to, enter into any transaction with any Affiliate of the Lessee (other than the Lessee or a Subsidiary), except upon fair and reasonable terms no less favorable to the Lessee or such Subsidiary than would obtain in a comparable arm's-length transaction with a Person not an Affiliate of the Lessee or such Subsidiary. (s) Change in Business. The Lessee and its Subsidiaries taken as a whole shall continue the primary businesses in which they are engaged on the Execution Date and lines of business reasonably related thereto. (t) Change in Accounting Policies. As soon as practicable and in any event within 10 days notice of any material change in accounting policies or financial reporting practices by the Lessee and its consolidated Subsidiaries. (u) Preservation of Corporate Existence, Etc. The Lessee shall, and shall cause each Subsidiary to (provided that nothing in this Section 8.1(u) shall prevent the voluntary liquidation, dissolution or winding up, not under any bankruptcy or insolvency law, of any Subsidiary so long as no Lease Event of Default exists and no Lease Event of Default or Lease Default will result therefrom): (i) preserve and maintain in full force and effect its existence and good standing under the laws of its jurisdiction of organization; (ii) preserve and maintain in full force and effect all governmental rights, privileges, qualifications, permits, licenses and franchises necessary or desirable in the normal conduct of its business (except in connection with transactions and sales of assets permitted by Section 8.1(j)); and (iii) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect; provided, however that the Lessee shall have the right to assign to an Affiliate of Tenneco Inc., or not preserve or renew, certain trademarks of Tenneco Inc. -33- 38 that are currently owned by the Lessee or any Subsidiary, but which are not used by the Lessee or such Subsidiary. (v) Negative Pledge. (a) ERISA. The Lessee shall not, and shall not permit any of its ERISA Affiliates to: (a) engage in a prohibited transaction or material violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in liability of the Lessee in an aggregate amount in excess of $5,000,000; or (b) engage in a transaction that could be subject to Section 4069 or 4212(c) of ERISA. (w) Securitization Transactions. The Lessee shall not, and shall not permit its Subsidiaries to enter into Securitization Transaction to the extent that the aggregate investment or claims held at any time by all purchasers, assignees, transferees of (or of interests in) receivables and other rights to payment in all Securitization Transactions would at any time exceed $200,000,000. SECTION 9. Payment of Certain Expenses. 9.1. Transaction Expenses. (a) Lessor agrees on the Initial Closing Date, to pay, or cause to be paid, all reasonable fees, expenses and disbursements of the various legal counsels for the Lessor and the Agent in connection with the transactions contemplated by the Operative Agreements and incurred in connection with the Initial Closing Date, including all Transaction Expenses (arising in connection with the Initial Closing Date), and all other reasonable fees, expenses and disbursements in connection with the Initial Closing Date, and including, without limitation, all fees, taxes and expenses for the recording, registration and filing of documents; provided, however, that the Lessor shall pay such amounts described in this Section 9.1 (a) only if (i) such amounts are properly described in a Requisition delivered on or before the Initial Closing Date, and (ii) funds are made available by the Lenders and the Holders in connection with such Requisition in an amount sufficient to allow such payment. On the Initial Closing Date, after delivery and receipt of the Requisition referenced in Section 4.2(a) hereof and satisfaction of the other conditions precedent for such date, the Holders shall make Holder Fundings and the Lenders shall make Loans to the Lessor to pay for the Transaction Expenses, fees, expenses and other disbursements referenced in this Section 9.1 (a). The Lessee agrees to pay all amounts referred to in this Section 9.1(a) to the extent not paid by Lessor. (b) Lessor agrees on each Property Closing Date (including the Initial Closing Date), to pay, or cause to be paid, all reasonable fees, expenses and disbursements of the various legal counsels for the Lessor and the Agent in connection with the transactions contemplated by the Operative Agreements and billed in connection with such Property -34- 39 Closing Date, or the date of such Funding, including all Transaction Expenses (arising with respect to the Initial Closing Date, such Property Closing Date, the date of such Funding), all fees, expenses and disbursements paid by the Lessee or incurred with respect to the various items referenced in Section 5.3, (including without limitation the cost of any Appraisals or environmental site assessments, any developer's fees, any consultant's fees, any premiums for title insurance policies and charges for any updates to such policies) and all other reasonable fees, expenses and disbursements in connection with such Property Closing Date, or the date of such Funding including, without limitation, all expenses relating to and all fees (including brokers' fees), taxes (including any and all stamp, transfer or similar taxes) and expenses for the recording, registration and filing of documents; provided, however, the Lessor shall pay such amounts described in this Section 9.1(b) only if (i) such amounts are properly described in a Requisition delivered on the applicable date and (ii) funds are made available by the Lenders and the Holders in connection with such Requisition in an amount sufficient to allow such payment. On each Property Closing Date, after delivery of the applicable Requisition and satisfaction of the other conditions precedent for such date, the Holders shall make a Holder Funding and the Lenders shall make Loans to the Lessor to pay for the Transaction Expenses, fees, expenses and other disbursements referenced in this Section 9.1(b). The Lessee agrees to pay all amounts referred to in this Section 9.1(b) to the extent not paid by the Lessor. 9.2. Certain Fees and Expenses. Lessee agrees to pay or cause to be paid (i) the initial and annual Owner Trustee's fee and all reasonable expenses of the Owner Trustee and any necessary co-trustees (including reasonable counsel fees and expenses) or any successor owner trustee, for acting as owner trustee under the Trust Agreement, (ii) all reasonable costs and expenses (including reasonable counsel fees and expenses) incurred by the Lessee, the Agent, the Lenders, Holders or the Lessor in entering into any future amendments or supplements requested by the Lessee with respect to any of the Operative Agreements, whether or not such amendments or supplements are ultimately entered into, or giving or withholding of waivers of consents hereto or thereto which have been requested by the Lessee, or any purchase of any Property by the Lessee pursuant to Article XX of the Lease, and (iii) all reasonable costs and expenses (including reasonable counsel fees and expenses) incurred by the Lessor, the Lessee, the Holders, the Lenders or the Agent in connection with the enforcement of any Operative Agreement or any exercise of remedies under any Operative Agreement. 9.3. Unused Fee and Holder Unused Fee. From the date hereof (provided, however, that no payments shall be made until the Initial Closing Date) through the Expiration Date and thereafter so long as any Rent or other amounts remain outstanding under the Operative Agreements, the Lessee agrees to pay (a) to the Agent, for the pro rata benefit of the Lenders of each Category of Loans based on the Commitment Percentage of each such Lender during the period for which payment is made, the Unused Fee; and (b) to the Lessor, for the pro rata benefit of the Holders based on the Holder Commitment of each such Holder during the period for which -35- 40 payment is made, the Holder Unused Fee. Such payments of fees provided for in this Section 9.3 shall be due in arrears on each Unused Fee Payment Date. Notwithstanding the foregoing, so long as any Lender or Holder fails (in violation of the Operative Agreements) to make available any portion of its Commitment or Holder Commitment when requested, such Person shall not be entitled to receive payment of pro rata share of its Unused r Holder Unused Fee (as the case may be) until such Person shall make available such portion. Each such fee shall be calculated on the basis of a year of 360 days for the actual number of days elapsed. If all or a portion of any Unused Fee or Holder Unused Fee shall not be paid when due, such overdue amount shall bear interest, payable by the Lessee on demand, at a rate per annum equal to the Base Rate plus 2%, from the date of such non-payment until such amount is paid in full (as well after as before judgment). SECTION 10. Other Covenants and Agreements. 10.1. Cooperation with the Lessee. The Holders, the Owner Trustee (at the direction of the Holders) and the Agent shall, to the extent reasonably requested by the Lessee (but without assuming additional liabilities on account thereof), at the Lessee's expense, cooperate with the Lessee in connection with its covenants contained herein including, without limitation, at any time and from time to time, upon the request of the Lessee, promptly and duly executing and delivering any and all such further instruments, documents and financing statements (and continuation statements related thereto) as the Lessee may reasonably request in order to perform such covenants. 10.2. Covenants of the Owner Trustee and the Holders. Each of the Owner Trustee and the Holders hereby agree that so long as this Agreement is in effect: (a) None of the Holders and the Owner Trustee (both in its capacity and in its individual capacity) will create or permit to exist at any time, and each of the Holders and the Owner Trustee will, at its own cost and expense, promptly take such action (and notify Lessee of such action) as may be necessary duly to discharge, or to cause to be discharged, all Lessor Liens attributable to it on the Properties; provided, however, that the Holders and the Owner Trustee shall not be required to discharge any such Lessor Lien while the same is being contested in good faith by appropriate proceedings diligently prosecuted so long as (a) such proceedings shall not involve any material danger of impairment of the Liens of the Security Documents or of the sale, forfeiture or loss of, any Property or title thereto or any interest therein or the payment of Rent, (b) such proceedings do not materially interfere with the construction of Improvements on any Property or the acquisition or refinancing of any Property, and (c) such proceedings shall not materially interfere with the disposition of any Property or title thereto or interest therein or the payment of Rent: -36- 41 (b) Without prejudice to any right of the Owner Trustee under the Trust Agreement to resign (subject to requirement set forth in the Trust Agreement that such resignation shall not be effective until a successor shall have agreed to accept such appointment), or the Holders' rights under the Trust Agreement to remove the institution acting as Owner Trustee (after consent to such removal by the Agent as provided in the Trust Agreement), each of the Holders and the Owner Trustee hereby agrees with the Lessee and the Agent (i) not to terminate or revoke the trust created by the Trust Agreement except as permitted by Article VIII of the Trust Agreement, (ii) not to amend, supplement, terminate or revoke or otherwise modify any provision of the Trust Agreement in such a manner as to adversely affect the rights of the Lessee or the Agent without the prior written consent of such party and (iii) to comply with all of the terms of the Trust Agreement; (c) The Owner Trustee or any successor may resign or be removed by the Holders as Owner Trustee, a successor Owner Trustee may be appointed and a corporation may become the Owner Trustee under the Trust Agreement, only in accordance with the provisions of Article IX of the Trust Agreement and, with respect to such appointment, with the consent of the Lessee, which consent shall not be unreasonably withheld, conditioned or delayed; (d) The Owner Trustee, in its capacity as Owner Trustee under the Trust Agreement, and not in its individual capacity, shall not contract for, create, incur or assume any indebtedness, or enter into any business or other activity, other than pursuant to or under the Operative Agreements; (e) The Holders will not instruct the Owner Trustee to take any action in violation of the terms of any Operative Agreement; (f) Neither any Holder nor the Owner Trustee shall (i) commence any case, proceeding or other action with respect to the Owner Trustee under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, arrangement, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (ii) seek appointment of a receiver, trustee, custodian or other similar official with respect to the Owner Trustee or for all or any substantial benefit of the creditors of the Owner Trustee; and neither any Holder nor the Owner Trustee shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in this paragraph; (g) The Owner Trustee shall give prompt notice to the Lessee and the Agent if the Owner Trustee's chief place of business or chief executive office, or the office where the records concerning the accounts or contract rights relating to a Property are kept, shall -37- 42 cease to be located at First Security Bank, N.A., 79 South Main Street, Salt Lake City, Utah, 84111, or if it shall change its name; (h) Provided that no Lease Event of Default has occurred and is continuing, neither the Owner Trustee nor any Holder shall, without the prior written consent of the Lessee, consent to or permit any amendment, supplement or other modification of the terms and provisions of the Credit Agreement or the Notes or (to the extent such amendment, supplement or modification would have an adverse effect on the rights or obligations of the Lessee under the Lease) any other Operative Agreement; (i) Neither the Owner Trustee nor any Holder shall consent to or permit any amendment, supplement or other modification of the terms and provisions of any Operative Agreement, in each case without the prior written consent of the Agent except as described in Section 10.5 of this Agreement; (j) The Owner Trustee (i) shall take such actions and shall refrain from taking such actions with respect to the Operative Agreements or the Properties and shall grant such approvals and otherwise act or refrain from acting with respect to the Operative Agreements or the Properties in each case as directed in writing by the Agent or, in connection with Section 10.5 hereof, the Lessee, notwithstanding any contrary instruction or absence of instruction by any Holder or Holders; and (ii) shall not take any action, grant any approvals or otherwise act under or with respect to the Operative Agreements or any matters relating to the Properties without first obtaining the prior written consent of the Agent (and without regard to any contrary instruction or absence of instruction by any Holder); provided, however, that notwithstanding the foregoing provisions of this subparagraph (j) the Owner Trustee, the Agent and the Holders each acknowledge, covenant and agree that, with respect to all matters under the Operative Agreements that require the consent or concurrence of all of the Lenders pursuant to the terms of Section 9.1 of the Credit Agreement (the "Unanimous Vote Matters"), neither the Owner Trustee nor the Agent shall act or refrain from acting with respect to any Unanimous Vote Matter until such party has received the approval of each Lender and each Holder with respect thereto; and (k) Except as otherwise contemplated by the Operative Agreements, neither the Owner Trustee nor any Holder shall use the proceeds of any Loan or Holder Funding for any purpose other than the payment of Transaction Expenses and the fees, expenses and other disbursements referenced in Sections 9.1 (a) and (b) of this Agreement, the purchase, refinance or lease of Properties, the acquisition or refinancing of Equipment, the acquisition or refinancing of Improvements and the payment of interest regarding the Loans and the payment of the Holder Yield regarding the Holder Fundings, in each case accrued under the Credit Agreement or Trust Agreement, as the case may be. -38- 43 10.3. Lessee Covenants, Consent and Acknowledgment. (a) Lessee acknowledges and agrees that the Owner Trustee, pursuant to the terms and conditions of the Security Agreement and the Mortgage Instruments, shall create Liens respecting the various personal property, fixtures and real property described therein in favor of the Agent. Lessee hereby irrevocably consents to the creation, perfection and maintenance of such Liens. (b) Lessor hereby instructs Lessee, and Lessee hereby acknowledges and agrees, that until such time as the Loans and all other amounts under the Operative Agreements are paid in full, (i) any and all Rent and any and all other amounts of any kind or type under any of the Operative Agreements due and owing or payable to the Lessor or the Owner Trustee shall instead be paid directly to the Agent or as the Agent may direct from time to time and (ii) Lessee shall cause all notices, certificates, financial statements, communications and other information which is delivered, or is required to be delivered, to the Lessor, the Owner Trustee or any Holder also to be delivered at the same time to the Agent. (c) Lessee shall not consent to or permit any amendment, supplement or other modification of the terms or provisions of any Operative Agreement without, in each case, obtaining the prior written consent of the Agent and, to the extent required by the proviso at the end of Section 10.2(j) hereof, each of the Holders. (d) Except as otherwise contemplated by the Operative Agreements, the Lessee shall not use the proceeds of any Holder Funding or Loan for any purpose other than the payment of Transaction Expenses and the fees, expenses and other disbursements referenced in Section 9.1(a) and (b) of this Agreement, the purchase or lease of Properties, the acquisition of Equipment, the construction of Improvements, the payment of interest regarding the Loans and the payment of the Holder Yield regarding the Holder Fundings, in each case accrued under the Credit Agreement or Trust Agreement, as the case may be, during the period prior to the Acquisition Date with respect to a particular Property. (e) The Lessee shall restrict the amount of Equipment located in or on each Property, so that at all times the Property Cost of the Equipment located in or on a given Property shall be less than or equal to 15% of the total Property Cost of such Property, provided, however, that this percentage limitation shall not apply to any such Equipment consisting of Fixtures or other goods incorporated into or customarily considered to be part of a building or structure erected on real property (such as heating, ventilating, air-conditioning, electrical and mechanical equipment or systems, escalators, elevators, wall and floor coverings, plumbing, pumps, tanks, conduits, wiring, lighting, security systems, sprinklers and other fire prevention and extinguishing apparatus). This 15% limitation -39- 44 shall apply to removable Equipment (including without limitation racking and picking equipment) that (i) is not incorporated into a building or structure or (ii) is customarily considered to be trade fixtures or operating equipment for the business of the Lessee. (f) The Lessee shall not create or permit to exist at any time (and the Lessee shall, at its own expense, take such action as may be necessary to duly discharge, or cause to be discharged) any Lien against any Property other than Permitted Encumbrances. (g) The Lessee shall pay (or cause to be paid) to the Agent the administrative fee (described in the Fee Letter) when and as due from time to time. 10.4. Sharing of Certain Payments. The parties hereto acknowledge and agree that all payments due and owing by the Lessee to the Lessor under the Lease or any of the other Operative Agreements shall be made by the Lessee directly to the Agent as more particularly provided in Section 10.3 hereof. The Holders and the Agent, on behalf of the Lenders, acknowledge the terms of Section 8 of the Credit Agreement regarding the allocation of payments and other amounts made or received from time to time under the Operative Agreements and agree all such payments and amounts are to be allocated as provided in Section 8 of the Credit Agreement. In connection therewith the Holders hereby (a) appoint the Agent to act as collateral agent for the Holders in connection with the Lien granted by the Mortgage Instruments to secure the Holder Amount and (b) acknowledge and agree and direct that the rights and remedies of the beneficiaries of the Lien of the Mortgage Instruments shall be exercised by the Agent on behalf of the Lenders and the Holders as directed from time to time by the Lenders without notice to or consent from the Holders. 10.5. Grant of Easements, Voting at Meetings, etc. The Agent and the Holders hereby agree that, so long as no Event of Default shall have occurred and be continuing, and until such time as the Agent gives instructions to the contrary to the Owner Trustee, the Owner Trustee shall, from time to time at the request of the Lessee, in connection with the transactions contemplated by the Lease or the other Operative Agreements, (i) grant easements and other rights in the nature of easements with respect to any Property, (ii) release existing easements or other rights in the nature of easements which are for the benefit of any Property, (iii) execute and deliver to any Person any instrument appropriate to confirm or effect such grants or releases, and (iv) execute and deliver to any Person such other documents or materials in connection with the acquisition, development or operation of any Property, including, without limitation, reciprocal easement agreements, operating agreements, development agreements, plats, replats or subdivision documents; provided, that each of the agreements and documents referred to in this Section 10.5 shall be of the type normally executed by the Lessee in the ordinary course of the Lessee's business and shall be on commercially reasonable terms so as not to diminish the value of any Property in any material respect. -40- 45 SECTION 11. Credit Agreement and Trust Agreement. 11.1. Lessee's Credit Agreement Rights. Notwithstanding anything to the contrary contained in the Credit Agreement, the Agent, the Lessee and the Owner Trustee hereby agree that, prior to the occurrence and continuation of any Lease Default or Lease Event of Default, the Lessee (as designated below) shall have the following rights: (a) the Lessee shall have the right to terminate or reduce the Commitments pursuant to Section 2.5(a) of the Credit Agreement and to make an Extension Request pursuant to Section 2.5(c) of the Credit Agreement; (b) the Lessee shall have the right to exercise the conversion and continuation options pursuant to Section 2.7 of the Credit Agreement; (c) the Lessee shall have the right to approve any successor agent pursuant to Section 7.9 of the Credit Agreement; (d) the Lessee shall have the right to consent to any assignment by a Lender to which the Lessor has the right to consent pursuant to Section 9.8 of the Credit Agreement; and (e) without limiting the foregoing clauses (a) through (d), and in addition thereto, the Lessee shall have the right to exercise any other right of the Owner Trustee under the Credit Agreement upon not less than five (5) Business Days' prior written notice from the Lessee to the Owner Trustee and the Agent. 11.2. Lessee's Trust Agreement Rights. Notwithstanding anything to the contrary contained in the Trust Agreement, the Lessee, the Owner Trustee and the Holders hereby agree that, prior to the occurrence and continuation of any Lease Default or Lease Event of Default, the Lessee (as designated below) shall have the following rights: (a) the Lessee shall have the right to exercise the conversion and continuation options pursuant to Section 3.8 of the Trust Agreement; (b) no removal of the Owner Trustee or appointment of a successor Owner Trustee pursuant to Section 9.1 of the Trust Agreement shall be made without the prior written consent (not to be unreasonably withheld or delayed) of the Lessee; and (c) the Holders and the Owner Trustee shall not amend, supplement or otherwise modify any provision of the Trust Agreement in such a manner as to adversely affect the rights of the Lessee without the prior written consent (not to be unreasonably withheld or delayed) of the Lessee. -41- 46 SECTION 12. Transfer of Interest. 12.1. Restrictions on Transfer. The Holders may, directly or indirectly, assign, convey or otherwise transfer any of their right, title or interest in or to the Trust Estate or the Trust Agreement with the prior written consent of the Agent, and (provided, no Default or Event of Default has occurred and is continuing) the Lessee, provided that such consents shall not be required for an assignment to an Affiliate of a Lender. The Owner Trustee may, subject to the Lien of the applicable Security Documents, but only with the prior written consent of the Agent, the Holders (which consent may be withheld by the Agent or the Holders in their sole discretion) and (provided no Default or Event of Default has occurred and is continuing) the Lessee, directly or indirectly, assign, convey, appoint an agent with respect to enforcement of, or otherwise transfer any of the Owner Trustee's right, title or interest in or to any Property, the Lease, the Trust Agreement, this Agreement (including, without limitation, any right to indemnification thereunder), or any other document relating to a Property or any interest in a Property as provided in the Trust Agreement and the Lease. The provisions of the immediately preceding sentence shall not apply to the obligations of the Owner Trustee to transfer Property to Lessee or a third party purchaser pursuant to Article XXII of the Lease upon payment for such Property in accordance with each of the terms and conditions of the Lease. 12.2. Effect of Transfer. From and after any transfer effected in accordance with this Section 12, the transferor shall be released, to the extent of such transfer, from its liability hereunder and under the other documents to which it is a party in respect of obligations to be performed on or after the date of such transfer; provided, however, that any transferor Holder shall remain liable under Article XI of the Trust Agreement to the extent that the transferee Holder shall not have assumed the obligations of the transferor Holder thereunder. Upon any transfer by the Owner Trustee or a Holder as above provided, any such transferee shall assume the obligations of the Owner Trustee and Lessor or the obligations of a Holder, as the case may be, and shall be deemed an "Owner Trustee", "Lessor" or "Holder", as the case may be, for all purposes of such documents and each reference herein to the transferor shall thereafter be deemed a reference to such transferee for all purposes, except as provided in the preceding sentence. Notwithstanding any transfer of all or a portion of the transferor's interest as provided in this Section 12, the transferor shall be entitled to all benefits accrued and all rights vested prior to such transfer including, without limitation, rights to indemnification under any such document. SECTION 13. Indemnification. 13.1. General Indemnity. Whether or not any of the transactions contemplated hereby shall be consummated, the Indemnity Provider hereby assumes liability for and agrees to defend, indemnify and hold harmless each Indemnified Person on an After Tax Basis from and against any Claims which may be imposed on, incurred by or asserted against an Indemnified Person by any other Person (but not to the extent such Claims arise from the gross negligence or willful -42- 47 misconduct of such Indemnified Person) in any way relating to or arising, or alleged (by any Person asserting such a claim against an Indemnified Person) to arise, out of the execution, delivery, performance or enforcement of this Agreement, the Lease, any other Operative Agreement or on or with respect to any Property or any part thereof, including, without limitation, Claims in any way relating to or arising or alleged to arise out of (a) the financing, refinancing, purchase, acceptance, rejection, ownership, design, construction, refurbishment, development, delivery, acceptance, nondelivery, leasing, subleasing, possession, use, operation, repair, modification, transportation, condition, sale, return, repossession (whether by summary proceedings or otherwise), or any other disposition of a Property, or any part thereof, including the acquisition, holding or disposition of any interest in any Property, lease or agreement comprising a portion of any thereof; (b) any latent or other defect in any property whether or not discoverable by an Indemnified Person or the Indemnity Provider; (c) any Environmental Claim, any violation of Environmental Laws, or any other loss of or damage to any property or the environment relating to any Property, the Lease or the Indemnity Provider; (d) the Operative Agreements, or any transaction contemplated thereby (except for such Claims for which such Indemnified Person shall be required to indemnify the Indemnity Provider pursuant to the terms of the Operative Agreements); (e) any breach by the Lessee of any of its representations or warranties under the Operative Agreements to which it is a party or failure by the Lessee to perform or observe any covenant or agreement to be performed by it under any of the Operative Agreements; (f) the transactions contemplated hereby or by any other Operative Agreement, in respect of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA; (g) any personal injury, death or property damage, including, without limitation, Claims based on strict or absolute liability in tort; (h) any easement, right, agreement or document referred to in Section 10.5 of this Agreement; or (i) any Lien on any Property (other than Liens created by the Operative Agreements), provided, that the Indemnity Provider shall not be required to indemnify the Lessor for any Lessor Liens. If a written Claim is made against any Indemnified Person or if any proceeding shall be commenced against such Indemnified Person (including a written notice of such proceeding) for any Claim, such Indemnified Person shall promptly notify the Indemnity Provider in writing and shall not take action with respect to such Claim without the consent of the Indemnity Provider for thirty (30) days after the receipt of such notice by the Indemnity Provider; provided, however, that, in the case of any such Claim, if action shall be required by law or regulation to be taken prior to the end of such 30- day period, such Indemnified Person shall endeavor, in such notice to the Indemnity Provider, to inform the Indemnity Provider of such shorter period, and no action shall be taken with respect to such Claim without the consent of the Indemnity Provider before seven (7) days before the end of such shorter period; provided, further, that the failure of such Indemnified Person to give the notices referred to in this sentence shall not diminish the Indemnity Provider's obligation hereunder except to the extent such failure precludes the Indemnity Provider from contesting such Claim. -43- 48 If, within thirty (30) days after receipt of such notice from the Indemnified Person (or such shorter period as the Indemnified Person has notified the Indemnity Provider is required by law or regulation for the Indemnified Person to respond to such Claim), the Indemnity Provider shall request in writing that such Indemnified Person respond to such Claim, the Indemnified Person shall, at the expense of the Indemnity Provider, in good faith conduct and control such action (including, without limitation by pursuit of appeals) (provided, however, that (A) if such Claim can be pursued by the Indemnity Provider on behalf of or in the name of such Indemnified Person, the Indemnified Person, at the Indemnity Provider's request, shall allow the Indemnity Provider to conduct and control the response to such Claim and (B) in the case of any Claim, the Indemnified Person may request the Indemnity Provider to conduct and control the response to such Claim (with counsel to be selected by the Indemnity Provider and consented to by such Indemnified Person, such consent not to be unreasonably withheld, conditioned or delayed); provided, however that any Indemnified Party may retain separate counsel at the expense of the Indemnity Provider in the event of a conflict that arises after the initial response to such Claim); by, in the sole discretion of the Person conducting and controlling the response to such Claim, (1) resisting payment thereof, (2) not paying the same except under protest, if protest is necessary and proper, (3) if the payment be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings, or (4) taking such other action as is reasonably requested by the Indemnity Provider from time to time. The party controlling the response to any Claim shall consult in good faith with the non-controlling party and shall keep the non-controlling party reasonably informed as to the conduct of the response to such Claim; provided, that all decisions ultimately shall be made in the discretion of the controlling party, except that the Indemnity Provider may not agree to any dismissal or settlement of, or other agreement in connection with, any claim without the prior written consent of such Indemnified Person, if such dismissal, settlement or agreement would require any admission or acknowledgment of any culpability or wrongdoing by such Indemnified Person or provide for any nonmonetary relief to be performed by such Indemnified Person. The parties agree that an Indemnified Person may at any time decline to take further action with respect to the response to such Claim and may settle such Claim if such Indemnified Person shall waive its rights to any indemnity from the Indemnity Provider that otherwise would be payable in respect of such Claim (and any future Claim, the pursuit of which is precluded by reason of such resolution of such Claim) and shall pay the Indemnity Provider any amount previously paid or advanced by the Indemnity Provider pursuant to this Section 13.1 by way of indemnification or advance for the payment of any amount regarding such Claim other than expenses of the action relating to such Claim. Notwithstanding the foregoing provisions of this Section 13.1, an Indemnified Person shall not be required to take any action and no Indemnity Provider shall be permitted to respond to any Claim in its own name or that of the Indemnified Person unless (A) the Indemnity Provider shall have agreed to pay and shall pay to such Indemnified Person on demand and on an After Tax Basis all reasonable costs, losses and expenses that such Indemnified Person actually -44- 49 incurs in connection with such Claim, including, without limitation, all reasonable legal, accounting and investigatory fees and disbursements, (B) the Indemnified Person shall have reasonably determined the action to be taken will not result in any material danger of sale, forfeiture or loss of any Property, or any part thereof or interest therein, will not interfere with the payment of Rent, and will not result in risk of criminal liability, (C) if such Claim shall involve the payment of any amount prior to the resolution of such Claim, the Indemnity Provider shall provide to the Indemnified Person an interest-free advance in an amount equal to the amount that the Indemnified Person is required to pay (with no additional net after-tax cost to such Indemnified Person), (D) in the case of a Claim that must be pursued in the name of an Indemnified Person (or an Affiliate thereof), the Indemnity Provider shall have provided to such Indemnified Person a letter from a Responsible Officer stating that a reasonable basis exists to contest such Claim, and (E) no Lease Event of Default shall have occurred and be continuing. In addition, an Indemnified Person shall not be required to contest any Claim in its name (or that of an Affiliate) if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely by a court of competent jurisdiction pursuant to the contest provisions of this Section 13.1, unless there shall have been a change in law (or interpretation thereof) and the Indemnified Person shall have received, at the Indemnity Provider's expense, an opinion of independent counsel selected by the Indemnified Person and reasonably acceptable to the Indemnity Provider stating that as a result of such change in law (or interpretation thereof), it is more likely than not that the Indemnified Person will prevail in such contest. 13.2. General Tax Indemnity. (a) The Indemnity Provider shall pay and assume liability for, and does hereby agree to indemnify, protect and defend each Property and all Indemnified Persons, and hold them harmless against, all Impositions on an After Tax Basis. (b) (i) Subject to the terms of Section 13.2(f) hereof and Section 13.1 of the Lease, the Indemnity Provider shall pay or cause to be paid all Impositions directly to the taxing authorities where feasible and otherwise to the Indemnified Person, as appropriate, and the Indemnity Provider shall at its own expense, upon such Indemnified Person's reasonable request, furnish to such Indemnified Person copies of official receipts or other satisfactory proof evidencing such payment. (ii) In the case of Impositions for which no contest is conducted pursuant to Section 13.2(f) hereof or Section 13.1 of the Lease, and which the Indemnity Provider pays directly to the taxing authorities, the Indemnity Provider shall pay such Impositions prior to the latest time permitted by the relevant taxing authority for timely payment. In the case of Impositions for which the Indemnity Provider reimburses an Indemnified Person, the Indemnity Provider shall do so within thirty (30) days after receipt by the Indemnity Provider of demand by such Indemnified Person describing in reasonable detail the nature of the Imposition and the basis for the demand (including the -45- 50 computation of the amount payable). In the case of Impositions for which a contest is conducted pursuant to Section 13.2(f) hereof or Section 13.1 of the Lease, the Indemnity Provider shall pay such Impositions or reimburse such Indemnified Person for such Impositions to the extent not previously paid or reimbursed, prior to the latest time permitted by the relevant taxing authority for timely payment after conclusion of all contests under Section 13.2(f) hereof and Section 13.1 of the Lease. (iii) Impositions imposed with respect to a Property for a billing period during which the Lease expires or terminates with respect to such Property (unless the Lessee has exercised the Purchase Option with respect to such Property or the Lessee has otherwise purchased such Property) shall be adjusted and prorated on a daily basis between the Indemnity Provider and the Lessor, whether or not such Imposition is imposed before or after such expiration or termination and each party shall pay its pro rata share thereof. (iv) At the Indemnity Provider's request, the amount of any indemnification payment by the Indemnity Provider pursuant to subsection (a) shall be verified and certified by an independent public accounting firm mutually acceptable to the Indemnity Provider and the Indemnified Person. The fees and expenses of such independent public accounting firm shall be paid by the Indemnity Provider unless such verification shall result in an adjustment in the Indemnity Provider's favor of 10% or more of the payment as computed by the Indemnified Person, in which case such fee shall be paid by the Indemnified Person. (c) The Indemnity Provider shall be responsible for preparing and filing any real and personal property or ad valorem tax returns with respect to each Property. In case any other report or tax return shall be required to be made with respect to any obligations of the Indemnity Provider under or arising out of subsection (a) and of which the Indemnity Provider has knowledge or written notice, the Indemnity Provider, at its sole cost and expense, shall notify the relevant Indemnified Person of such requirement and (except if such Indemnified Person notifies the Indemnity Provider that such Indemnified Person intends to file such report or return) (A) to the extent required or permitted by and consistent with Legal Requirements, make and file in Indemnity Provider's name such return, statement or report; and (B) in the case of any other such return, statement or report required to be made in the name of such Indemnified Person, advise such Indemnified Person of such fact and prepare such return, statement or report for filing by such Indemnified Person or, where such return, statement or report shall be required to reflect items in addition to any obligations of the Indemnity Provider under or arising out of subsection (a), provide such Indemnified Person at the Indemnity Provider's expense with information sufficient to permit such return, statement or report to be properly made with respect to any obligations of the Indemnity Provider under or arising out of subsection (a). Such Indemnified Person shall, upon the Indemnity -46- 51 Provider's request and at the Indemnity Provider's expense, provide any data maintained by such Indemnified Person (and not otherwise available to or within the control of the Indemnity Provider) with respect to any Property which the Indemnity Provider may reasonably require to prepare any required tax returns or reports. (d) If as a result of the payment or reimbursement by the Indemnity Provider of any Imposition or other reasonable expenses of the Lessor or the payment of any Transaction Expenses incurred in connection with the transactions contemplated by the Operative Agreements, the Lessor or the Holders shall suffer a net increase in any federal, state or local income tax liability, the Indemnity Provider shall indemnify such Persons (without duplication of any indemnification required by subsection (a)) on an After Tax Basis for the amount of such increase. The calculation of any such net increase shall take into account any current or future tax savings realized or reasonably expected to be realized by such Person in respect thereof, as well as any interest, penalties and additions to tax payable by such Lessor, or such Holder, in respect thereof. (e) As between the Indemnity Provider on one hand, and the Lessor or the Agent, any Lender or any Holder on the other hand, the Indemnity Provider shall be responsible for, and the Indemnity Provider shall indemnify and hold harmless the Lessor, the Agent, the Lenders and each Holder (without duplication of any indemnification required by subsection (a)) on an After Tax Basis against, any obligation for United States or foreign withholding taxes imposed in respect of payments on the Notes or Certificates or with respect to Rent payments under the Lease (and, if the Lessor, the Agent, any Lender or any Holder receives a demand for such payment from any taxing authority, the Indemnity Provider shall discharge such demand on behalf of the Lessor, the Agent, such Lender or such Holder); provided, however, that the right of any Lender to make a claim for indemnification under this Section 13.2(e) is subject to the compliance by such Lender with the requirements of Section 2.13 of the Credit Agreement. (f) If a written Claim is made against any Indemnified Person, or if any proceeding shall be commenced against such Indemnified Person (including a written notice of such proceeding), for any Impositions, such Indemnified Person shall promptly notify the Indemnity Provider in writing and shall not take action with respect to such Claim or proceeding without the consent of the Indemnity Provider for thirty (30) days after the receipt of such notice by the Indemnity Provider; provided, however, that, in the case of any such Claim or proceeding, if action shall be required by law or regulation to be taken prior to the end of such 30-day period, such Indemnified Person shall, in such notice to the Indemnity Provider, inform the Indemnity Provider of such shorter period, and no action shall be taken with respect to such Claim or proceeding without the consent of the Indemnity Provider before seven (7) days before the end of such shorter period; provided, further, that the failure of such Indemnified Person to give the notices referred -47- 52 to this sentence shall not diminish the Indemnity Provider's obligation hereunder except to the extent such failure precludes the Indemnity Provider from contesting such Claim. (i) Subject to Section 13.2(g) below regarding contests of Property Taxes by the Lessee, if, within thirty (30) days after receipt of such notice from the Indemnified Person (or such shorter period as provided in this Section 13.2(f)), the Indemnity Provider shall request in writing that such Indemnified Person contest such Imposition, the Indemnified Person shall, at the expense of the Indemnity Provider, in good faith conduct and control such contest (including, without limitation, by pursuit of appeals) relating to the validity, applicability or amount of such Imposition (provided, however, that (A) if such contest can be pursued independently from any other proceeding involving a tax liability of such Indemnified Person, the Indemnified Person, at the Indemnity Provider's request, shall allow the Indemnity Provider to conduct and control such contest and (B) in the case of any contest, the Indemnified Person may request the Indemnity Provider to conduct and control such contest (with counsel to be selected by the Indemnity Provider and consented to by such Indemnified Person, such consent not to be unreasonably withheld, conditioned or delayed; provided, however, that any Indemnified Person may retain separate counsel at the expense of the Indemnity Provider in the event of a conflict that first arises after the initial response to such Claim) by, in the sole discretion of the Person conducting and controlling such contest, (1) resisting payment thereof, (2) not paying the same except under protest, if protest is necessary and proper, (3) if the payment be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings, or (4) taking such other action as is reasonably requested by the Indemnity Provider from time to time. (ii) Subject to Section 13.2(g) below regarding contests of Property Taxes by the Lessee, the party controlling any contest shall consult in good faith with the non-controlling party and shall keep the non-controlling party reasonably informed as to the conduct of such contest; provided, that all decisions ultimately shall be made in the sole discretion of the controlling party, except that the Indemnity Provider may not agree to any dismissal or settlement of, or other agreement in connection with, any claim without the prior written consent of such Indemnified Person, if such dismissal, settlement or agreement would require any admission or acknowledgment of any culpability or wrongdoing by such Indemnified Person or provide for any nonmonetary relief to be performed by such Indemnified Person. The parties agree that an Indemnified Person may at any time decline to take further action with respect to the contest of any Imposition and may settle such contest if such Indemnified Person shall waive its rights to any indemnity from the Indemnity Provider that otherwise would be payable in respect of such Imposition (and any future Claim by any taxing -48- 53 authority, the contest of which is precluded by reason of such resolution of such contest) and shall pay to the Indemnity Provider any amount previously paid or advanced by the Indemnity Provider pursuant to this Section 13.2 for the payment of any amount regarding such Imposition other than expenses of such contest. (iii) Subject to Section 13.2(g) below regarding contests of Property Taxes by the Lessee, notwithstanding the foregoing provisions of this Section 13.2, an Indemnified Person shall not be required to take any action and no Indemnity Provider shall be permitted to contest any Imposition in its own name or that of the Indemnified Person unless (A) the Indemnity Provider shall have agreed to pay and shall pay to such Indemnified Person on demand and on an After Tax Basis all reasonable costs, losses and expenses that such Indemnified Person actually incurs in connection with contesting such Imposition, including, without limitation, all reasonable legal, accounting and investigatory fees and disbursements, (B) the Indemnified Person shall have reasonably determined that the action to be taken will not result in any material danger of sale, forfeiture or loss of any Property, or any part thereof or interest therein, will not interfere with the payment of Rent, and will not result in risk of criminal liability, (C) unless payment of such Imposition is not yet due or is stayed pending such contest, the Indemnity Provider shall either pay such Imposition or provide to the Indemnified Person an interest-free advance in an amount equal to the Imposition that the Indemnified Person is required to pay (with no additional net after-tax cost to such Indemnified Person), (D) in the case of a Claim that must be pursued in the name of an Indemnified Person (or an Affiliate thereof), the Indemnity Provider shall have provided to such Indemnified Person an opinion of independent or in-house tax counsel selected by the Indemnified Person and reasonably satisfactory to the Indemnity Provider stating that a reasonable basis exists to contest such Claim, and (E) no Event of Default shall have occurred and be continuing. (g) Sections 13.2(f)(i) through (iii) shall not apply to contests by the Lessee of Property Taxes (and Property Tax assessments) with respect to any Property. Such contests are governed by Section 13.1 of the Lease. However, Sections 13.2(f)(i) through (iii) shall apply if Lessee (or any other Indemnity Provider) requests that any Indemnified Person control the contest of such Property Taxes. SECTION 14. Miscellaneous. 14.1. Survival of Agreements. The representations, warranties, covenants, indemnities and agreements of the parties provided for in the Operative Agreements, and the parties' obligations under any and all thereof, shall survive the execution and delivery of this Agreement, the transfer of any Property to the Owner Trustee, the acquisition of any Equipment, the construction of any Improvements, any disposition of any interest of the Owner Trustee in any -49- 54 Property or any interest of the Holders in the Owner Trust, the payment of the Notes and any disposition thereof, and shall be and continue in effect notwithstanding any investigation made by any party and the fact that any party may waive compliance with any of the other terms, provisions or conditions of any of the Operative Agreements. Except as otherwise expressly set forth herein or in other Operative Agreements, the indemnities of the parties provided for in the Operative Agreements shall survive the expiration or termination of any thereof. 14.2. No Broker, etc. Each of the parties hereto (other than the Lessee and the Guarantor) represents to the other parties hereto that it has not retained or employed any broker, finder or financial adviser to act on its behalf in connection with this Agreement, nor has it authorized any broker, finder or financial adviser retained or employed by any other Person so to act. Any party who is in breach this representation shall indemnify and hold the other parties harmless from and against any liability arising out of such breach of this representation. The Lessee and the Guarantor covenants that (a) it will not permit any broker, finder, financial adviser or other Person employed by it so to act to have any Lien against any Property or the Trust Estate or any part thereof, and (b) (without limiting the generality of Article XIII) it will indemnify and hold each Indemnified Person harmless from and against any liability arising out of any fee or other Claim of any such broker, finder, financial advisor or other Person employed by the Lessee or the Guarantor so to act. 14.3. Notices. Unless otherwise specifically provided herein, all notices, consents, directions, approvals, instructions, requests and other communications required or permitted by the terms hereof to be given to any Person shall be given in writing by United States certified or registered mail (postage prepaid), by nationally recognized courier service, by hand or by telecopy with confirming notice and any such notice shall become effective upon receipt and shall be directed to the address of such Person as indicated: If to the Lessee or to the Guarantor, to it at the following address: Tenneco Packaging Inc. 1900 West Field Court Lake Forest, Illinois 60045 Attention: General Counsel Telephone No.: 847/482-2000 Telefacsimile No.: 847/482-4738 -50- 55 If to the Owner Trustee, to it at the following address: First Security Bank, N.A. 79 South Main Street Salt Lake City, Utah 84111 Attention: Val Orton Telephone No.: (801) 246-5630 Telefacsimile No.: (801) 246-5053 If to Bank of America, N.A., as a Holder or a Lender, to it at the following address: Bank of America, N.A. 101 North Tryon Street NC1-001-15-12 Charlotte, North Carolina 28255 Attention: Mollie Canup Telephone No.: (704) 386-1316 Telefacsimile No.: (704) 409-0011 with all notices of requests for Loans or Holder Fundings, or conversion, continuation or prepayment of any Loans or Holder Funding, to be sent to: Bank of America, N.A. 101 North Tryon Street NC1-001-15-12 Charlotte, North Carolina 28255 Attention: Mollie Canup Telephone No.: (704) 386-1316 Telefacsimile No.: (704) 409-0011 If to the Agent, to it at the following address: Bank of America, N.A. 101 North Tryon Street NC1-001-15-12 Charlotte, North Carolina 28255 Attention: Mollie Canup Telephone No.: (704) 386-1316 Telefacsimile No.: (704) 409-0011 with all notices of borrowing, conversion, continuation or prepayment of any Loan to be delivered to the address set forth in Section 9.2 of the Credit Agreement. -51- 56 If to any other Lender or Holder, to it at the address specified in the signature pages to the Credit Agreement or Trust Agreement (as applicable), any applicable amendment thereto, or any applicable Assignment and Assumption. From time to time any party may designate a new address for purposes of notice hereunder by notice to each of the other parties hereto. 14.4. Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 14.5. Amendments and Termination. Neither this Agreement nor any of the terms hereof may be terminated, amended, supplemented, waived or modified except by an instrument in writing signed by the Lessor, the Lessee and (subject to Section 9.1 of the Credit Agreement), the Agent. This Agreement may be terminated by an agreement signed in writing by the Owner Trustee, the Holders, the Lessee and the Agent. 14.6. Headings, etc. The Table of Contents and headings of the various Articles and Sections of this Agreement are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions hereof. 14.7. Parties in Interest. Except as expressly provided herein, none of the provisions of this Agreement are intended for the benefit of any Person except the parties hereto; provided, that the Lenders are intended to be third-party beneficiaries of this Agreement. 14.8. GOVERNING LAW; WAIVERS OF JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS. (b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN. 14.9. Submission to Jurisdiction; Waivers. Each of the parties hereto irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Operative Agreements to which it is a party, or for -52- 57 recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York and the courts of the United States of America, in each case sitting in New York, New York, and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same, (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail) postage prepaid, to the respective party at its address set forth in Section 14.3 hereof or at such other address of which the Administrative Agent shall have been notified pursuant thereto; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 14.9 any special, exemplary, punitive or consequential damages. 14.10. Severability. Any provision of this Agreement that is prohibited or enforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining visions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render such provision unenforceable in any other jurisdiction. 14.11. Liability Limited. (a) The Agent, the Lessee and the Holders each acknowledge and agree that the Owner Trustee is (except as otherwise expressly provided herein or therein) entering into this Agreement and the other Operative Agreements to which it is a party (other than the Trust Agreement and other than as set forth in Section 7.2 of this Agreement), solely in its capacity as trustee under the Trust Agreement and not in its individual capacity and that Trust Company shall not be liable or accountable under any circumstances whatsoever in its individual capacity for or on account of any statements, representations, warranties, covenants or obligations stated to be those of the Owner Trustee, except for its own gross negligence or willful misconduct and except as otherwise expressly provided herein or in the other Operative Agreements. -53- 58 (b) Anything to the contrary contained in this Agreement, the Credit Agreement, the Notes or in any other Operative Agreement notwithstanding, neither the Lessor nor any Holder (in its capacity as a Holder) nor any officer, director, shareholder, or partner thereof, nor any of the successors or assigns of the foregoing (all such Persons being hereinafter referred to collectively as the "Exculpated Persons"), shall be personally liable in any respect for any liability or obligation hereunder or under any other Operative Agreement including the payment of the principal of, or interest on, the Notes, or for monetary damages for the breach of performance of any of the covenants contained in the Credit Agreement, the Notes, this Agreement, the Security Agreement or any of the other Operative Agreements. The Agent (for itself and on behalf of the Lenders) agrees that, in the event the Agent or any Lender pursues any remedies available to them under the Credit Agreement, the Notes, this Agreement, the Security Agreement, the Mortgage Instruments or under any other Operative Agreement, neither the Lenders nor the Agent shall have any recourse against any Exculpated Person, for any deficiency, loss or Claim for monetary damages or otherwise resulting therefrom, and recourse shall be had solely and exclusively against the Trust Estate and the Lessee (with respect to the Lessee's obligations under the Lease, and the Participation Agreement); but nothing contained herein shall be taken to prevent recourse against or the enforcement of remedies against the Trust Estate in respect of any and all liabilities, obligations and undertakings contained herein, in the Credit Agreement, in the Notes, in the Security Agreement, the Mortgage Instruments or in any other Operative Agreement. Notwithstanding the provisions of this Section, nothing in this Agreement, the Credit Agreement, the Notes, the Security Agreement, the Mortgage Instruments or any other Operative Agreement shall: (i) constitute a waiver, release or discharge of any indebtedness or obligation evidenced by the Notes or arising under this Agreement, the Security Agreement, the Mortgage Instruments or the Credit Agreement or secured by the Security Agreement, the Mortgage Instruments or any other Operative Agreement, but the same shall continue until paid or discharged; (ii) relieve the Lessor or any Exculpated Person from liability and responsibility for (but only to the extent of the damages arising by reason of): (a) active waste knowingly committed by such Lessor or such Exculpated Person with respect to the Properties or (b) any fraud, gross negligence, willful misconduct or willful breach on the part of such Lessor or such Exculpated Person; (iii) relieve such Lessor or such Exculpated Person from liability and responsibility for (but only to the extent of the moneys misappropriated, misapplied or not turned over) (a) misappropriation or misapplication by such Lessor (i.e., application in a manner contrary to any Operative Agreement) of any insurance proceeds or condemnation award paid or delivered to such Lessor by any Person other than the Agent, or (b) any rents or other income received by such Lessor from the Lessee that are not turned over to the Agent; or (iv) affect or in any way limit the Agent's rights and remedies under any Operative Agreement with respect to the Rents and its rights thereunder or its right to obtain a judgment against the Lessor's interest in the Properties. -54- 59 14.12. Rights of Lessee. Notwithstanding any provision of the Operative Agreements, if at any time all obligations (i) of the Owner Trustee under the Credit Agreement, the Security Documents, the Trust Agreement and the other Operative Agreements and (ii) of the Lessee under the Operative Agreements have in each case been satisfied or discharged in full, then the Lessee shall be entitled to (a) terminate the Lease and (b) receive all amounts then held under the Operative Agreements and proceeds with respect to any of the Properties. Upon the termination of the Lease pursuant to the foregoing clause (a), the Lessor shall transfer to the Lessee all of its right, title and interest free and clear of the Lien of the Lease and all Lessor Liens in and to any Properties then subject to the Lease and any amounts or proceeds referred to in the foregoing clause (b) shall be paid over to the Lessee. 14.13. Further Assurances. The parties hereto shall promptly cause to be taken, executed, acknowledged or delivered, at the sole expense of the Lessee, all such further acts, conveyances, documents and assurances as the other parties may from time to time reasonably request in order to carry out and effectuate the intent and purposes of this Participation Agreement, the other Operative Agreements and the transactions contemplated hereby and thereby (including, without limitation, the preparation, execution and filing of any and all Uniform Commercial Code financing statements and other filings or registrations which the parties hereto may from time to time request to be filed or effected). The Lessee, at its own expense and without need of any prior request from any other party, shall take such action as may be necessary (including any action specified in the preceding sentence), or (if Owner Trustee shall so request) as so requested, in order to maintain and protect all security interests provided for hereunder or under any other Operative Agreement. 14.14. Calculations under Operative Agreements. The parties hereto agree that all calculations and numerical determinations to be made under the Operative Agreements by the Owner Trustee shall be made by the Agent and that such calculations and determinations shall be conclusive and binding on the parties hereto the absence of manifest error. 14.15. Confidentiality. Each of the Owner Trustee, the Holders, the Agent and the Lenders severally agrees to use reasonable efforts to keep confidential all non-public information pertaining to the Lessee or its Subsidiaries which is provided to it by the Lessee or its Subsidiaries, and shall not intentionally disclose such information to any Person except: (a) to the extent such information is public when received by such Person or becomes public thereafter due to the act or omission of any party other than such Person; (b) to the extent such information is independently obtained from a source other than the Guarantor or any of its Subsidiaries and such information from such source is not, to such Person's knowledge, subject to an obligation of confidentiality or, if such information is subject to an obligation of confidentiality, that disclosure of such information is permitted; -55- 60 (c) to any Affiliate of any such Person or to counsel, auditors or accountants retained by any such Person or any such Affiliate, provided they agree to keep such information confidential as if such Person or Affiliate were party to this Agreement and to financial institution regulators, including examiners of any Lender, the Agent or the Owner Trustee, any Holder or any Affiliate in the course of examinations of such Persons; (d) in connection with any litigation or the enforcement or preservation of the rights of the Agent, the Owner Trustee, the Lessor, any Lender or any Holder under the Operative Agreements; (e) to the extent required by any applicable statute, rule or regulation or court order (including, without limitation, by way of subpoena) or pursuant to the request of any regulatory or Governmental Authority having jurisdiction over any such Person; provided, however, that such Person shall endeavor (if not otherwise prohibited by Law) to notify the Guarantor prior to any disclosure made pursuant to this clause (e), except that no such Person shall be subject to any liability whatsoever for any failure to so notify the Guarantor; (f) the Agent, the Owner Trustee, any Lender or any Holder may disclose such information to the Agent, the Owner Trustee, any Lender or any Holder; or (g) to the extent disclosure to any other financial institution or other Person is appropriate in connection with any proposed or actual (i) assignment or grant of a participation by any of the Lenders of interests in the Credit Agreement or any Note to such other financial institution or (ii) assignment by any Holder of interests in the Trust Agreement to another Person. 14.16. Calculation of Rent, Interest, Holder Yield and Fees. Except as otherwise expressly set forth in the Operative Agreements, all calculation of Rent, interest, Holder Yield, Overdue Rate, Holder Overdue Rate, Facility Fees, or Holder Facility Fees payable hereunder shall be computed based on the actual number of days elapsed over a year of 360 days. 14.17. Assignment Clause. Notwithstanding anything to the contrary contained herein, any Bank (a "Granting Bank") may grant to a special purpose funding vehicle (an "SPC"), identified as such in writing from time to time by the Granting Bank to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Advance that such Granting Bank would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Advance, (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Advance, the Granting Bank shall be obligated to make such Advance pursuant to the terms hereof. The making of an Advance by an SPC hereunder shall utilize the Commitment of the Granting Bank to the same extent, and as if, such Advance were made by -56- 61 such Granting Bank. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Bank). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 14.17, any SPC may (i) with notice to, but without the prior written consent of, the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Advances to the Granting Bank or to any financial institutions (consented to by the Borrower and Administrative Agent) providing liquidity and/or credit support to or for the account such SPC to support the funding or maintenance of Advances and (ii) disclose on a confidential basis any non-public information relating to its Advances to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC. This section may not be amended without the written consent of the SPC. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] -57- 62 IN WITNESS WHEREOF, the parties hereto have caused this Participation Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written. TENNECO PACKAGING INC., as Lessee and Guarantor By: ------------------------------------- Name: Title: 63 FIRST SECURITY BANK, N.A., not individually, except as expressly stated herein, but solely as Owner Trustee under the Temple Trust 1997-1 By: ------------------------------------ Name: Title: 64 BANK OF AMERICA N.A., as Administrative Agent By: ------------------------------------ Name: Title: BANK OF AMERICA N.A., as a Holder By: ------------------------------------ Name: Title: BANK OF AMERICA N.A., as a Lender By: ------------------------------------ Name: Title: FUNDING OFFICE: 65 SCHEDULE I Initial Holders
Holder Name Commitment Bank of America, N.A $ 656,250.00 Credit Suisse First Boston $ 656,250.00 Bank One, NA $ 656,250.00 Banque Nationale de Paris $ 656,250.00 The Bank of New York $ 468,750.00 CSL Leasing, Inc. $ 468,750.00 Commerzbank AG $ 468,750.00 First Union National Bank $ 468,750.00 Barclays Bank PLC $ 468,750.00 IBJTC Leasing $ 375,000.00 Corporation/BSC Bank Hapoalim B.M $ 843,750.00 BBL International (U.K.) $ 375,000.00 Limited
66 SCHEDULE II TENNECO PACKAGING INC. MEMORANDUM OF LITIGATION AND CLAIMS 67 SCHEDULE III PERMITTED LIENS 68 EXHIBIT A REQUISITION FORM (Pursuant to Sections 4.2 and 5.2 of the Participation Agreement) 69 EXHIBIT B TENNECO PACKAGING INC. OFFICER'S CERTIFICATE (Pursuant to Section 5.3(xxii) of the Participation Agreement) 70 EXHIBIT C FORM OF OPINION OF COUNSEL TO TENNECO PACKAGING INC. 71 EXHIBIT D TENNECO PACKAGING INC. OFFICER'S CERTIFICATE (Pursuant to Section 6.1 (e) of the Participation Agreement) 72 EXHIBIT E TENNECO PACKAGING INC. SECRETARY'S CERTIFICATE (Pursuant to Section 6.1 (f) of the Participation Agreement) 73 EXHIBIT F FIRST SECURITY BANK, N.A. OFFICER'S CERTIFICATE (Pursuant to Section 6.2(d) of the Participation Agreement) 74 EXHIBIT G FIRST SECURITY BANK, N.A. CERTIFICATE OF ASSISTANT SECRETARY (Pursuant to Section 6.2(e) of the Participation Agreement) 75 EXHIBIT H FORM OF OPINION OF COUNSEL TO FIRST SECURITY BANK, N.A. 76 EXHIBIT I DESCRIPTION OF LAND FOR TEMPLE PROPERTY EX-12 26 COMPUTAITON RATIO OF EARNINGS 1 EXHIBIT 12 THE BUSINESSES OF PACTIV CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (DOLLARS IN MILLIONS) (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, ------------- 1999 1998 ---- ---- Income from continuing operations........................... $ 56 $ 84 Add: Interest............................................... 106 100 Portion of rentals representative of interest factor... 13 10 Preferred stock dividend requirements of majority-owned subsidiaries.......................................... -- -- Income tax expense (benefit) and other taxes on income................................................ 51 62 Amortization of interest capitalized................... -- -- Undistributed (earnings) losses of affiliated companies in which less than a 50% voting interest is owned..... -- (3) ---- ---- Earnings as defined............................... $226 $253 ==== ==== Interest.................................................... $106 $100 Interest capitalized........................................ 1 -- Portion of rentals representative of interest factor........ 13 10 Preferred stock dividend requirements of majority-owned subsidiaries on a pre-tax basis........................... -- -- ---- ---- Fixed charges as defined.......................... $120 $110 ==== ==== Ratio of earnings to fixed charges.......................... 1.88 2.30 ==== ====
EX-27.1 27 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BUSINESSES OF PACTIV CORPORATION COMBINED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH COMBINED FINANCIAL STATEMENTS. 1,000,000 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 24 0 324 0 453 918 2,106 578 4,581 1,133 1,528 0 0 0 1,383 4,581 2,158 2,158 1,477 1,477 451 0 106 107 51 56 (155) (7) (32) (138) (.83) (.83)
EX-27.2 28 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BUSINESSES OF PACTIV CORPORATION COMBINED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH COMBINED FINANCIAL STATEMENTS. 1,000,000 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 4 0 145 0 422 857 2,030 487 4,755 898 1,405 0 0 0 1,825 4,755 2,067 2,067 1,423 1,423 398 0 100 147 62 84 62 0 0 146 .87 .87
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