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EXHIBIT 10.1
PACKAGING CORPORATION OF AMERICA
$150,000,000
4 3/8% SENIOR NOTES DUE 2008
$400,000,000
5 3/4% SENIOR NOTES DUE 2013
PURCHASE AGREEMENT
July 15, 2003
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July 15, 2003
Morgan Stanley & Co. Incorporated
Citigroup Global Markets Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
Packaging Corporation of America, a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several purchasers named in
Schedule I hereto (the "INITIAL PURCHASERS") $150,000,000 principal amount of
its 4 3/8% Senior Notes due 2008 (the "4 3/8% NOTES") and $400,000,000 principal
amount of its 5 3/4% Senior Notes due 2013 (the "5 3/4% NOTES" and, together
with the 4 3/8% Notes, the "NOTES") to be issued pursuant to the provisions of
an Indenture dated as of July 21, 2003 (the "INDENTURE") between the Company and
U.S. Bank National Association, as Trustee (the "TRUSTEE").
The Notes will be offered without being registered under the Securities
Act of 1933, as amended (the "SECURITIES ACT"), to qualified institutional
buyers in compliance with the exemption from registration provided by Rule 144A
under the Securities Act, in offshore transactions in reliance on Regulation S
under the Securities Act ("REGULATION S") and to institutional accredited
investors (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) that deliver a letter in the form annexed to the Final Memorandum (as
defined below).
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum (the "PRELIMINARY MEMORANDUM") and will prepare
a final offering memorandum (the "FINAL MEMORANDUM" and, with the Preliminary
Memorandum, each a "MEMORANDUM") including or incorporating by reference a
description of the terms of the Notes, the terms of the offering and a
description of the Company. As used herein, the term "Memorandum" shall include
in each case the documents incorporated by reference therein. The terms
"SUPPLEMENT," "AMENDMENT" and "AMEND" as used herein with respect to a
Memorandum shall include all documents deemed to be incorporated by reference in
the Preliminary Memorandum or Final Memorandum that are filed subsequent to the
date of such Memorandum with the Securities and Exchange Commission (the
"COMMISSION") pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").
The holders of the Notes will be entitled to the benefits of a
Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be
entered into between the Company and you, as representatives of the Initial
Purchasers, as of the Closing Date (as defined below), pursuant to which the
Company will file a registration statement with the Commission registering the
Notes and Exchange Notes (as defined in the Registration Rights Agreement) under
the Securities Act.
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1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, you that:
(a) (i) Each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in either
Memorandum complied or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and regulations
of the Commission thereunder and (ii) the Preliminary Memorandum does
not contain and the Final Memorandum, in the form used by the Initial
Purchasers to confirm sales and on the Closing Date (as defined in
Section 4), will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in either
Memorandum based upon information relating to any Initial Purchaser
furnished to the Company in writing by such Initial Purchaser through
you expressly for use therein.
(b) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in each Memorandum and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(c) Each subsidiary of the Company has been duly
incorporated or organized, is validly existing as a corporation or
limited liability company in good standing under the laws of the
jurisdiction of its incorporation or organization, has the power and
authority (corporate or otherwise) to own its property and to conduct
its business as described in each Memorandum and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable and each such share owned directly or
indirectly by the Company is owned free and clear of all liens,
encumbrances, equities or claims (other than as the result of stock
pledged under that certain Credit Agreement dated as of April 12, 1999
and Amended and Restated as of June 29, 2000, among the Company, Morgan
Guaranty Trust Company of New York, as Administrative Agent, J.P.
Morgan Securities Inc. and Deutsche Bank Securities Inc., as Co-Lead
Arrangers and Joint Book Runners, Deutsche Bank Securities Inc., as
Syndication Agent, Goldman Sachs Credit Partners L.P., as Documentation
Agent, and each of the Lenders from time to time a party thereto (the
"EXISTING CREDIT AGREEMENT")).
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
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(e) The Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, will be valid and binding
obligations of the Company, enforceable in accordance with their terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity, and will
be entitled to the benefits of the Indenture.
(f) The Indenture has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company,
enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and general principles of equity.
(g) The Registration Rights Agreement has been duly
authorized by the Company and, on the Closing Date, will have been duly
executed and delivered by, and will be a valid and binding agreement
of, the Company, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity.
(h) The Notes, the Indenture and the Registration Rights
Agreement will conform in all material respects to the respective
statements relating thereto contained in each Memorandum and will be in
substantially the respective forms last delivered to the Initial
Purchasers prior to the date of this Agreement.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Registration Rights Agreement, the Notes and the
Exchange Notes do not and will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company
or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole (other than the Existing Credit
Agreement), or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary,
and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance
by the Company of its obligations under this Agreement, the Indenture,
the Registration Rights Agreement, the Notes or the Exchange Notes,
except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Notes
and by federal and state securities laws with respect to the Company's
obligations under the Registration Rights Agreement.
(j) There has not occurred any material adverse change,
or any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Final Memorandum.
(k) There are no legal or governmental proceedings
pending or threatened to which the Company or any of its subsidiaries
is a party or to which any of the properties
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of the Company or any of its subsidiaries is subject other than
proceedings described in each Memorandum and proceedings that would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole, or on the power or ability of the Company to perform
its obligations under this Agreement, the Indenture, the Registration
Rights Agreement, the Notes or the Exchange Notes, or to consummate the
transactions contemplated by the Final Memorandum.
(l) The Company and its subsidiaries (i) are in
compliance with any and all applicable foreign, Federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) have received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(m) Except as described in each Memorandum, there are no
costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties)
which would, singly or in the aggregate, have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(n) No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any of its
subsidiaries' principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to cause
a material adverse change, or a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Final Memorandum.
(o) The Company and its subsidiaries possess all
certificates, authorizations, approvals, licenses, registrations and
permits issued by appropriate Federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations,
approvals, licenses, registrations or permits would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole,
and neither the Company nor any such subsidiary has received notice of
any proceedings relating to the revocation or modification of any such
certificate, authorization, approval, license, registration or permit,
except where such proceedings would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
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(p) The Company is not, and after giving effect to the
offering and sale of the Notes and the application of the proceeds
thereof as described in the Final Memorandum, will not be required to
register as, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(q) Neither the Company nor any affiliate (as defined in
Rule 501(b) of Regulation D under the Securities Act, an "AFFILIATE")
of the Company has directly, or through any agent, (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect
of, any security (as defined in the Securities Act) which is or will be
integrated with the sale of the Notes in a manner that would require
the registration under the Securities Act of the Notes or (ii) engaged
in any form of general solicitation or general advertising in
connection with the offering of the Notes (as those terms are used in
Regulation D under the Securities Act), or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities
Act.
(r) None of the Company, its Affiliates or any person
acting on its or their behalf has engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with
respect to the Notes and the Company and its Affiliates and any person
acting on its or their behalf have complied and will comply with the
offering restrictions requirement of Regulation S, except no
representation, warranty or agreement is made by the Company in this
paragraph with respect to the Initial Purchasers.
(s) Assuming the accuracy of the representations of the
Initial Purchasers contained in Section 7 hereof, it is not necessary
in connection with the offer, sale and delivery of the Notes to the
Initial Purchasers in the manner contemplated by this Agreement to
register the Notes under the Securities Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended.
(t) The Notes satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to
sell to the several Initial Purchasers, and each Initial Purchaser, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective principal amount, of 4 3/8% Notes and 5 3/4%
Notes set forth in Schedule I hereto opposite its name at a purchase price of
98.944% of the principal amount of 4 3/8% Notes and 98.493% of the principal
amount of 5 3/4% Notes (the "PURCHASE PRICE"), in each case, plus accrued
interest, if any, to the Closing Date.
The Company hereby agrees that, without the prior written consent of
Morgan Stanley & Co. Incorporated and Citigroup Global Markets Inc. on behalf of
the Initial Purchasers, it will not, during the period beginning on the date
hereof and continuing to and including the Closing Date, offer, sell, contract
to sell or otherwise dispose of any debt securities of the Company or warrants
to purchase debt securities of the Company substantially similar to the Notes
(other than the sale of the Notes under this Agreement).
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3. TERMS OF OFFERING. You have advised the Company that the
Initial Purchasers will make an offering of the Notes purchased by the Initial
Purchasers hereunder, on the terms to be set forth in the Final Memorandum, as
soon as practicable after this Agreement is entered into as in your judgment is
advisable.
4. PAYMENT AND DELIVERY. Payment for the Notes shall be made to
the Company in Federal or other immediately available funds to an account
specified by the Company against delivery of such Notes for the respective
accounts of the several Initial Purchasers at 10:00 a.m., New York City time, on
July 21, 2003, or at such other time on the same or such other date, not later
than July 28, 2003, as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "CLOSING DATE."
Certificates for the Notes shall be in definitive form or global form,
as specified by you, and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date. The certificates evidencing the Notes shall be delivered to you on
the Closing Date for the respective accounts of the several Initial Purchasers,
with any transfer taxes payable in connection with the transfer of the Notes to
the Initial Purchasers duly paid, against payment of the Purchase Price therefor
plus accrued interest, if any, to the date of payment and delivery.
5. CONDITIONS TO THE INITIAL PURCHASERS' OBLIGATIONS. The several
obligations of the Initial Purchasers to purchase and pay for the Notes on the
Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any
downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the
possible change, in the rating accorded the Company or any of
the Company's securities by any "NATIONALLY RECOGNIZED
STATISTICAL RATING ORGANIZATION," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or
any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Final Memorandum
(exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Notes on the terms and in the
manner contemplated in the Final Memorandum.
(b) The Initial Purchasers shall have received on the
Closing Date a certificate, dated the Closing Date and signed by an
executive officer of the Company, to the effect set forth in Section
5(a) and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the
Closing Date
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and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date (except to the extent
such compliance has been waived by you in writing). The officer signing
and delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
(c) The Initial Purchasers shall have received on the
Closing Date an opinion of Kirkland & Ellis LLP, outside counsel for
the Company, dated the Closing Date, to the effect set forth in Exhibit
A. Such opinion shall be rendered to the Initial Purchasers at the
request of the Company and shall so state therein.
(d) The Initial Purchasers shall have received on the
Closing Date an opinion of Sidley Austin Brown & Wood LLP, counsel for
the Initial Purchasers, dated the Closing Date, to the effect set forth
in Exhibit B.
(e) The Initial Purchasers shall have received on each of
the date hereof and the Closing Date a letter, dated the date hereof or
the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers, from Ernst & Young LLP,
independent public accountants, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in or incorporated by reference into
the Final Memorandum; provided that the letter delivered on the Closing
Date shall use a "cut-off date" not earlier than the date hereof.
(f) At the Closing Date, the Registration Rights
Agreement shall have been duly executed and delivered by the Company.
(g) At the Closing Date, the Notes shall be rated at
least Ba1 by Moody's Investors Service Inc. ("MOODY'S") and BBB- by
Standard & Poor's Ratings Services, a division of McGraw Hill, Inc.
("S&P"), and the Company shall have delivered to the Initial Purchasers
written evidence satisfactory to the Initial Purchasers confirming that
the Notes have such ratings (such as letters from such rating agencies
or copies of any press releases or other public announcements).
(h) At or prior to the Closing Date, the Existing Credit
Agreement shall be extinguished and evidence thereof reasonably
satisfactory to the Initial Purchasers shall have been delivered to the
Initial Purchasers.
(i) At or prior to the Closing Date, the Company shall
have furnished to the Initial Purchasers such documents and opinions,
in addition to the foregoing, as the Initial Purchasers may reasonably
request in connection with the purchase of the Notes as herein
contemplated and related transactions contemplated hereunder.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Initial Purchasers contained in this Agreement, the Company
covenants with each Initial Purchaser as follows:
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(a) To furnish to you in New York City, without charge,
prior to 10:00 a.m., New York City time, on the business day next
succeeding the date of this Agreement and during the period mentioned
in Section 6(c), as many copies of the Final Memorandum, any documents
incorporated by reference therein and any supplements and amendments
thereto as you may reasonably request.
(b) Before amending or supplementing either Memorandum,
to furnish to you a copy of each such proposed amendment or supplement
and not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the date hereof and
prior to the date on which all of the Notes shall have been sold by the
Initial Purchasers, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Final
Memorandum in order to make the statements therein, in the light of the
circumstances when the Final Memorandum is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Initial
Purchasers, it is necessary to amend or supplement the Final Memorandum
to comply with applicable law, forthwith to prepare and furnish, at its
own expense, to the Initial Purchasers, either amendments or
supplements to the Final Memorandum so that the statements in the Final
Memorandum as so amended or supplemented will not, in the light of the
circumstances when the Final Memorandum is delivered to a purchaser, be
misleading or so that the Final Memorandum, as amended or supplemented,
will comply with applicable law.
(d) To endeavor to qualify the Notes for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
(e) To take all reasonable action necessary to enable S&P
and Moody's to provide their respective credit ratings of the Notes.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the issuance and sale of the Notes and
all other fees or expenses in connection with the preparation of each
Memorandum and all amendments and supplements thereto, including all
printing costs associated therewith, and the delivering of copies
thereof to the Initial Purchasers, in the quantities herein above
specified, (ii) all costs and expenses related to the transfer and
delivery of the Notes to the Initial Purchasers, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing
any Blue Sky or legal investment memorandum in connection with the
offer and sale of the Notes under state securities laws and all
expenses in connection with the qualification of the Notes for offer
and sale under state securities laws as provided in Section 6(d)
hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Initial Purchasers in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) any fees charged by rating agencies for the rating of
the Notes, (v) the costs and charges of the Trustee and any transfer
agent, registrar or depositary, (vi) the cost of the preparation,
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issuance and delivery of the Notes, (vii) the costs and expenses of the
Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Notes, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road
show, and (viii) all other cost and expenses incident to the
performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 8, and the
last paragraph of Section 10, the Initial Purchasers will pay all of
their costs and expenses, including fees and disbursements of their
counsel, transfer taxes payable on resale of any of the Notes by them
and any advertising expenses connected with any offers they may make.
(g) Neither the Company nor any Affiliate will sell,
offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) which could
be integrated with the sale of the Notes in a manner which would
require the registration under the Securities Act of the Notes.
(h) Neither the Company nor any Affiliate will solicit
any offer to buy or offer or sell the Notes by means of any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities
Act, except for the exchange offer to be made by the Company in
accordance with the terms of the Registration Rights Agreement.
(i) While any of the Notes remain "RESTRICTED SECURITIES"
within the meaning of the Securities Act, to make available, upon
request, to any seller of such Notes the information specified in Rule
144A(d)(4) under the Securities Act, unless the Company is then subject
to Section 13 or 15(d) of the Exchange Act.
(j) None of the Company, its Affiliates or any person
acting on its or their behalf (other than the Initial Purchasers, as to
which the Company makes no covenant) will engage in any directed
selling efforts (as that term is defined in Regulation S) with respect
to the Notes, and the Company and its Affiliates and each person acting
on its or their behalf (other than the Initial Purchasers) will comply
with the offering restrictions requirement of Regulation S.
(k) During the period of two years after the Closing
Date, the Company will not, and will not permit any of its affiliates
(as defined in Rule 144A under the Securities Act) to resell any of the
Notes which constitute "RESTRICTED SECURITIES" under Rule 144A that
have been reacquired by any of them.
7. OFFERING OF NOTES; RESTRICTIONS ON TRANSFER. (a) Each Initial
Purchaser, severally and not jointly, represents and warrants that such Initial
Purchaser is a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act (a "QIB"). Each Initial Purchaser,
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severally and not jointly, agrees with the Company that (i) it will not solicit
offers for, or offer or sell, such Notes by any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act and (ii) it will solicit offers for such
Notes only from, and will offer such Notes only to, persons that it reasonably
believes to be (A) in the case of offers inside the United States, (1) other
QIBs or (2) institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act ("INSTITUTIONAL ACCREDITED INVESTORS")
that, prior to their purchase of the Notes, deliver to such Initial Purchaser a
letter containing the representations and agreements set forth in Appendix A to
the Memorandum and (B) in the case of offers outside the United States, to
persons other than U.S. persons ("FOREIGN PURCHASERS," which term shall include
dealers or other professional fiduciaries organized, incorporated or (if an
individual) resident in the United States acting on a discretionary basis for
non-U.S. persons (other than an estate or trust)) in reliance upon Regulation S
under the Securities Act that, in each case, in purchasing such Notes are deemed
to have represented and agreed as provided in the Final Memorandum under the
caption "Transfer Restrictions."
(b) Each Initial Purchaser, severally and not jointly,
represents, warrants, and agrees with respect to offers and sales
outside the United States that:
(i) such Initial Purchaser understands that no
action has been or will be taken in any jurisdiction by the
Company that would permit a public offering of the Notes, or
possession or distribution of either Memorandum or any other
offering or publicity material relating to the Notes, in any
country or jurisdiction where action for that purpose is
required;
(ii) such Initial Purchaser will comply with all
applicable laws and regulations in each jurisdiction in which
it acquires, offers, sells or delivers Notes or has in its
possession or distributes either Memorandum or any such other
material, in all cases at its own expense;
(iii) such Initial Purchaser agrees that the Notes
offered or sold, or to be offered or sold, by such Initial
Purchaser pursuant hereto in reliance on Regulation S have
been and will be offered and sold only in offshore
transactions;
(iv) such Initial Purchaser understands that the
Notes have not been registered under the Securities Act and
agrees that the Notes may not be offered or sold within the
United States or to, or for the account or benefit of, U.S.
persons except in accordance with Rule 144A or Regulation S
under the Securities Act or pursuant to another exemption from
the registration requirements of the Securities Act;
(v) such Initial Purchaser has offered the Notes
and will offer and sell the Notes (A) as part of their
distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering and the Closing
Date, only in accordance with Rule 903 of Regulation S or as
otherwise permitted in Section 7(a); accordingly, neither such
Initial Purchaser, its Affiliates nor any
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persons acting on its or their behalf have engaged or will
engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Notes, and any such Initial
Purchaser, its Affiliates and any such persons have complied
and will comply with the offering restrictions requirement of
Regulation S;
(vi) such Initial Purchaser has (A) not offered
or sold and, prior to the date six months after the Closing
Date, will not offer or sell any Notes to persons in the
United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995 (as amended), (B) only
communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the
meaning of Section 21 of the Financial Services and Markets
Act 2000 (the "FSMA")) received by it in connection with the
issue or sale of any Notes in circumstances in which Section
21(1) of the FSMA does not apply to the Company and (C)
complied and will comply with all applicable provisions of the
FSMA with respect to anything done by it in relation to the
Notes in, from or otherwise involving the United Kingdom;
(vii) such Initial Purchaser understands that the
Notes have not been and will not be registered under the
Securities and Exchange Law of Japan, and represents that it
has not offered or sold, and agrees not to offer or sell,
directly or indirectly, any Notes in Japan or for the account
of any resident thereof except pursuant to any exemption from
the registration requirements of the Securities and Exchange
Law of Japan and otherwise in compliance with applicable
provisions of Japanese law; and
(viii) such Initial Purchaser agrees that, at or
prior to confirmation of sales of the Notes, it will have sent
to each distributor, "DEALER" (as defined in Section 2(a)(12)
of the Securities Act) or person receiving a selling
concession, fee or other remuneration that purchases Notes
from it during the "DISTRIBUTION COMPLIANCE PERIOD" (as
defined in Regulation S) a confirmation or notice to
substantially the following effect:
"The Notes covered hereby have not been registered
under the U.S. Securities Act of 1933 (the
"Securities Act") and may not be offered and sold
within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40
days after the later of the commencement of the
offering and the closing date, except in either case
in accordance with Regulation S (or Rule 144A if
available) under the Securities Act. Terms used above
have the meaning given to them by Regulation S."
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Terms used in this Section 7(b) have the meanings given to them by
Regulation S.
8. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser and each person, if any, who
controls any Initial Purchaser within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and each affiliate of each
Initial Purchaser within the meaning of Rule 405 under the Securities Act from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
either Memorandum (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Initial Purchaser furnished
to the Company in writing by such Initial Purchaser through you expressly for
use therein; provided, however, that the foregoing indemnity agreement with
respect to any Preliminary Memorandum shall not inure to the benefit of any
Initial Purchaser from whom the person asserting any such losses, claims,
damages or liabilities purchased Notes, or any person controlling such Initial
Purchaser, if a copy of the Final Memorandum (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Initial Purchaser to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Notes to such person, and if the Final
Memorandum (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Company with Section 6(a) hereof or unless such
defect shall have been cured by a document which is incorporated or deemed to be
incorporated by reference in the Final Memorandum.
(b) Each Initial Purchaser agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers and each person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the
Company to such Initial Purchaser, but only with reference to
information relating to such Initial Purchaser furnished to the Company
in writing by such Initial Purchaser through you expressly for use in
either Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 8(a) or 8(b), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the
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fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties and
that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Morgan Stanley &
Co. Incorporated, in the case of parties indemnified pursuant to
Section 8(a), and by the Company, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences
of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in
Section 8(a) or 8(b) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph,
in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Initial Purchasers on the other
hand from the offering of the Notes or (ii) if the allocation provided
by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause 8(d)(i) above but also the relative fault of the
Company on the one hand and of the Initial Purchasers on the other hand
in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Initial Purchasers on the other hand in
connection with the offering of the Notes shall be deemed to be in the
same respective proportions as the net proceeds from the offering of
the Notes (before deducting
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expenses) received by the Company and the total discounts and
commissions received by the Initial Purchasers bear to the aggregate
offering price of the Notes. The relative fault of the Company on the
one hand and of the Initial Purchasers on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Initial Purchasers' respective
obligations to contribute pursuant to this Section 8 are several in
proportion to the respective principal amount of Notes they have
purchased hereunder, and not joint.
(e) The Company and the Initial Purchasers agree that it
would not be just or equitable if contribution pursuant to this Section
8 were determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable
considerations referred to in Section 8(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 8(d) shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 8, no Initial Purchaser shall be
required to contribute any amount in excess of the amount by which the
total price at which the Notes resold by it in the initial placement of
such Notes were offered to investors exceeds the amount of any damages
that such Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section
8 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained
in this Section 8 and the representations, warranties and other
statements of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on
behalf of any Initial Purchaser or any person controlling any Initial
Purchaser or by or on behalf of the Company, its officers or directors
or any person controlling the Company and (iii) acceptance of and
payment for any of the Notes.
9. TERMINATION. You may terminate this Agreement by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on, or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market, the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a material
disruption in securities settlement, payment or clearance services in the United
States shall have occurred, (iv) any moratorium on commercial banking activities
shall have been declared by Federal or New York
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State authorities or (v) there shall have occurred any outbreak or escalation of
hostilities, or any change in financial markets or any calamity or crisis that,
in your judgment, is material and adverse and which, singly or together with any
other event specified in this clause (v), makes it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Notes on the terms and in the manner contemplated in the Final Memorandum.
10. EFFECTIVENESS; DEFAULTING INITIAL PURCHASERS. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date, any one or more of the Initial Purchasers
shall fail or refuse to purchase 4 3/8% Notes or 5 3/4% Notes, as the case may
be, that it or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of such Notes which such defaulting Initial Purchaser
or Initial Purchasers agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of such series of Notes to be
purchased on such date, the other Initial Purchasers shall be obligated
severally in the proportions that the principal amount of such Notes set forth
opposite their respective names in Schedule I bears to the aggregate principal
amount of such series of Notes set forth opposite the names of all such
non-defaulting Initial Purchasers, or in such other proportions as you may
specify, to purchase such Notes which such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase on such date;
provided that in no event shall the principal amount of such series of Notes
that any Initial Purchaser has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of such series of Notes without the written consent of
such Initial Purchaser. If, on the Closing Date any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase 4 3/8% Notes or 5 3/4% Notes, as the
case may be, which it or they have agreed to purchase hereunder on such date and
the aggregate principal amount of such Notes with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of such series
of Notes to be purchased on such date, and arrangements satisfactory to you and
the Company for the purchase of such Notes are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Initial Purchaser or of the Company. In any such case either
you or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Final Memorandum or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting Initial
Purchaser from liability in respect of any default of such Initial Purchaser
under this Agreement.
If this Agreement shall be terminated by the Initial Purchasers, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Initial Purchasers or such Initial
Purchasers as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Initial Purchasers in connection
with this Agreement or the offering contemplated hereunder.
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11. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK. THE COMPANY HEREBY (A) SUBMITS TO THE JURISDICTION OF ANY NEW
YORK STATE OR FEDERAL COURT SITTING IN NEW YORK CITY WITH RESPECT TO ANY ACTIONS
AND PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, (B) AGREES THAT
ALL CLAIMS WITH RESPECT TO SUCH ACTIONS OR PROCEEDINGS MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT, (C) WAIVES THE DEFENSE OF AN
INCONVENIENT FORUM AND (D) AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
13. NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by telecopy or
telegram, as follows:
If to you:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Telecopy No.: (212)761-0783
Attention: Fixed Income Syndicate Desk
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Telecopy No.: (212) 816-7912
Attention: Jeanne Campanelli
with a copy to:
Sidley Austin Brown & Wood LLP
787 Seventh Avenue
New York, New York 10019
Telecopy No.: (212) 839-5599
Attention: John H. Newman
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If to the Company:
Packaging Corporation of America
1900 West Field Court
Lake Forest, Illinois 60045
Telecopy No.: (847) 482-4545
Attention: Chief Financial Officer
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601-6636
Telecopy No.: (312) 861-2200
Attention: James S. Rowe
or, in each case, at such other address as may be specified in writing by a
party to the other parties hereto.
All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (w) if by personal delivery, on the day after such
delivery, (x) if by certified or registered mail, on the seventh business day
after the mailing thereof, (y) if by next-day or overnight mail or delivery, on
the day delivered, (z) if by telecopy, on the next day following the day on
which such telecopy was sent, provided that a copy is also sent by certified or
registered mail with postage prepaid.
14. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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Very truly yours,
PACKAGING CORPORATION OF AMERICA
By: /s/ Richard B. West
-----------------------------------------
Name: Richard B. West
Title: Senior Vice President,
Chief Executive Officer
and Corporate Secretary
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
Citigroup Global Markets Inc.
Acting severally on behalf of themselves and
the several Initial Purchasers
named in Schedule I hereto.
Morgan Stanley & Co. Incorporated
By: /s/ Harold J. Hendershot III
---------------------------------
Name: Harold J. Hendershot III
Title: Executive Director
Citigroup Global Markets Inc.
By: /s/ John Chrysikopoulous
---------------------------------------
Name: John Chrysikopoulous
Title: Managing Director
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