EXHIBIT 10.1
EXECUTION COPY
$550,000,000
9 5/8% Senior Subordinated Notes due 2009
$100,000,000
12 3/8% Senior Exchangeable Preferred Stock due 2010
PACKAGING CORPORATION OF AMERICA
and the
GUARANTORS
Signatories Hereto
Purchase Agreement
March 30, 1999
X.X. Xxxxxx Securities Inc.
BT Xxxx.Xxxxx Incorporated
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0060
Ladies and Gentlemen:
Packaging Corporation of America, a Delaware corporation (the "Company"),
proposes to issue and sell to the several Initial Purchasers listed in Schedule
I hereto (the "Initial Purchasers") $550.0 million in aggregate principal amount
of its 9 5/8% Senior Subordinated Notes due 2009 (the "Notes") and $100.0
million in aggregate liquidation preference of its 12 3/8% Senior Exchangeable
Preferred Stock due 2010 (the "Preferred Stock"). The Notes will be issued
pursuant to the provisions of an Indenture to be dated as of April 12, 1999 (the
"Indenture") among the Company, the guarantors listed on the signature pages
hereof (the "Guarantors") and United States Trust Company of New York, as
trustee (the "Trustee") and will be fully and unconditionally guaranteed (the
"Guarantees"), jointly and severally, on a senior subordinated basis by each of
the Guarantors. The Company and the Guarantors are collectively
referred to herein as the "Issuers." The Preferred Stock will be issued pursuant
to a Certificate of Designations, Preferences and Relative, Participating,
Optional and Other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions Thereof (the "Certificate of Designations") to be
filed by the Company with the Delaware Secretary of State as an amendment to the
Company's certificate of incorporation. The transfer agent of the Preferred
Stock will be United States Trust Company of New York. The Preferred Stock may,
under certain circumstances, be exchanged for the Company's 123/8% Subordinated
Exchange Debentures due 2010 (the "Exchange Debentures" and, together with the
Notes, the Preferred Stock and the Guarantees, the "Securities"). The Exchange
Debentures, if issued, will be issued pursuant to an indenture (the "Exchange
Indenture") between the Company and United States Trust Company of Texas, N.A.,
as trustee (the "Exchange Trustee").
The offering of the Securities is being made in connection with (i) the
contribution (the "Contribution") by Tenneco Packaging Inc. ("TPI"), a wholly
owned subsidiary of Tenneco Inc. ("Tenneco"), of its containerboard and
corrugated packaging products business to the Company pursuant to that certain
Contribution Agreement, dated as of January 25, 1999, among TPI, PCA Holdings
and the Company (as the same may be amended or amended and restated, the
"Contribution Agreement") and (ii) that certain bank credit facility (the
"Senior Bank Financing") among TPI, as borrower until the Contribution is
consummated, the Company, as borrower after the Contribution is consummated,
various lenders, X.X. Xxxxxx Securities Inc. and BT Xxxx.Xxxxx Incorporated, as
co-lead arrangers, Bankers Trust Company, as syndication agent and Xxxxxx Trust
Company of New York, as administrative agent. References in this Agreement to
the "Transactions" shall include the offerings of the Notes and the Preferred
Stock and the application of net proceeds therefrom, the Contribution, the
Senior Bank Financing and the other transactions defined in the Offering
Memorandum (as defined) as the "Transactions."
References in this Agreement to the "Company," to "subsidiaries" of the
Company, to "Issuers" or to "Guarantors" shall be deemed to be references to
such entities both before and immediately after giving effect to the
Transactions (it being understood that prior to the Transactions the Company has
no subsidiaries). Notwithstanding any of the provisions of this Agreement, all
of the representations, warranties, covenants and agreements with respect to the
Guarantors will become effective only as of the Closing Date.
The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon exemptions therefrom.
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum dated March 16, 1999 (the "Preliminary
Memorandum") and has prepared a final offering memorandum dated the date hereof
(the "Final Memorandum" and together with the Preliminary Memorandum, the
"Offering Memorandum"), for the information of the Initial Purchasers and for
delivery to prospective purchasers of the Securities. Any references herein to
the Preliminary Memorandum, the Final Memorandum or the Offering Memorandum
shall be deemed to include all amendments and supplements thereto.
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The Initial Purchasers and their direct and indirect transferees will be
entitled to the benefits of (i) a registration rights agreement with respect to
the Notes (the "Notes Registration Rights Agreement"), to be dated as of the
Closing Date (as defined) and to be substantially in the form attached hereto as
Exhibit A, pursuant to which the Issuers will file one or more registration
statements with the Securities and Exchange Commission (the "Commission")
registering with the Commission the Company's 9 5/8% Senior Subordinated Notes
due 2009 with terms substantially identical to those of the Notes (the "Exchange
Notes") to be offered in exchange for the Notes, including guarantees
substantially identical to those of the Guarantees (the "Exchange Guarantees"),
and (ii) a registration rights agreement with respect to the Preferred Stock and
the Exchange Debentures (the "Preferred Stock Registration Rights Agreement"),
to be dated as of the Closing Date and to be substantially in the form attached
hereto as Exhibit B, pursuant to which the Issuers will file one or more
registration statements with the Commission registering with the Commission (a)
the Company's 12 3/8% Senior Exchangeable Preferred Stock due 2010 with terms
substantially identical to those of the Preferred Stock (the "New Preferred
Stock") to be offered in exchange for the Preferred Stock and (b) the Company's
12 3/8% Subordinated Exchange Debentures due 2010 with terms substantially
identical to those of the Exchange Debentures (the "New Exchange Debentures").
The Issuers agree with the Initial Purchasers as follows:
1. Upon the consummation of the Contribution, the Company agrees to issue
and sell the Securities to the several Initial Purchasers as hereinafter
provided, and each Initial Purchaser, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase, severally and not jointly, the aggregate principal amount of
Notes from the Issuers and the aggregate liquidation preference of Preferred
Stock from the Company set forth opposite such Initial Purchaser's name in
Schedule I hereto at a price (the "Purchase Price") equal to 97.0% of the
principal amount of the Notes plus accrued interest, if any, from March 30, 1999
to the date of payment and delivery and 96.5% of the liquidation preference of
the Preferred Stock plus accrued dividends, if any, from March 30, 1999 to the
date of payment and delivery.
2. The Issuers understand that the Initial Purchasers intend (i) to offer
the Securities to "qualified institutional buyers" within the meaning of Rule
144A under the Securities Act, and to also offer the Notes pursuant to
Regulation S under the Securities Act ("Regulation S"), their respective
portions of the Securities as soon after this Agreement has become effective as
in the judgment of the Initial Purchasers is advisable and (ii) initially to
offer the Securities upon the terms set forth in this Agreement and in the
Offering Memorandum.
The Issuers confirm that they have authorized the Initial Purchasers,
subject to the restrictions set forth below, to distribute copies of the
Offering Memorandum in connection with the offering of the Securities. Each
Initial Purchaser hereby makes to the Issuers the following representations and
agreements:
(i) it is a "qualified institutional buyer" within the meaning of Rule
144A under the Securities Act; and
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(ii) (A) it will not solicit offers for, or offer to sell, the Securities
by any form of general solicitation or general advertising (as those terms are
used in Regulation D under the Securities Act ("Regulation D")) and (B) it will
solicit offers for the Securities only from, and will offer the Securities only
to, persons whom it reasonably believes to be, (x) in the case of offers of the
Securities inside the United States, "qualified institutional buyers" within the
meaning of Rule 144A under the Securities Act, and (y) in the case of offers of
the Notes outside the United States, persons other than U.S. persons ("foreign
purchasers," which term shall include dealers or other professional fiduciaries
in the United States acting on a discretionary basis for foreign beneficial
owners (other than an estate or trust)) that, in each case, in purchasing the
Securities are deemed to have represented and agreed as provided in the Offering
Memorandum.
With respect to offers and sales outside the United States, as described in
clause (ii)(B)(y) above, each Initial Purchaser hereby represents and agrees
with the Issuers that:
(i) it understands that no action has been or will be taken by the
Issuers that would permit a public offering of the Notes, or possession or
distribution of the Offering 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) it 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 the Offering Memorandum or any such other
material, in all cases at its own expense;
(iii) the Notes offered and 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) the sale of the Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Securities Act;
(v) it understands that the Notes have not been and will not be
registered under the Securities Act and 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 Regulation S under the Securities Act or
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act;
(vi) it has not offered the Notes and will not offer and sell the
Notes (a) as part of its distribution at any time and (b) otherwise prior
to 40 days after the later of the commencement of the offering and the
Closing Date, in either case except in accordance with Rule 903 of
Regulation S (or Rule 144A, if available). Accordingly, neither such
Initial Purchaser, nor any of its affiliates, nor any persons acting on
its behalf has engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the Notes, and such
Initial Purchaser, its affiliates and any such persons have complied and
will comply with the offering restrictions requirement of Regulation S;
and
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(vii) it agrees that, at or prior to confirmation of sales of the
Notes, it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Notes from it
during the restricted period 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, as amended (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 prior to 40 days after
the closing of the offering, 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."
Terms used in this Section 2 and not otherwise defined in this Agreement have
the meanings given to them by Regulation S.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Initial Purchasers on April 12, 1999, or at such other time on the same or such
other date, not later than the tenth Business Day thereafter, as the Initial
Purchasers and the Company may agree upon in writing. The time and date of such
payment are referred to herein as the "Closing Date." As used herein, the term
"Business Day" means any day other than a day on which banks are permitted or
required to be closed in New York City.
Payment for the Securities shall be made against delivery to the nominee
of The Depository Trust Company for the respective accounts of the several
Initial Purchasers of the Securities of one or more global notes (collectively,
the "Global Note") representing the Notes and one or more global certificates
(collectively, the "Global Certificate") representing the Preferred Stock. The
Global Note and the Global Certificate will be made available for inspection by
the Initial Purchasers at the office of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, not later than 1:00 P.M., New York City time, on the
Business Day prior to the Closing Date.
4. The Issuers, jointly and severally, represent and warrant to each
Initial Purchaser that:
(a) the Preliminary Memorandum did not, as of its date, and the Final
Memorandum will not, in the form used by the Initial Purchasers to confirm sales
of the Securities and as of the Closing Date, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information relating to any Initial Purchaser furnished
to the Company in writing by such Initial Purchaser expressly for use therein;
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(b) the financial statements, and the related notes thereto, included in
the Offering Memorandum present fairly the consolidated financial position of
the Company and its subsidiaries as of the dates indicated and the results of
their operations and the changes in their consolidated cash flows for the
periods specified; and said financial statements have been prepared in
conformity with generally accepted accounting principles and practices applied
on a consistent basis; and the pro forma financial information, and the related
notes thereto, included in the Offering Memorandum is based upon good faith
estimates and assumptions believed by the Issuers to be reasonable;
(c) since the respective dates as of which information is given in the
Preliminary Memorandum and the Final Memorandum, there has not been any material
adverse change, or any development which would reasonably be expected to result
in a material adverse change, in or affecting the business, senior management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Final Memorandum;
(d) the statistical and market-related data included in the Offering
Memorandum are based on or derived from sources which the Issuers believe to be
reliable and accurate in all material respects;
(e) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with power and
authority to own its properties and conduct its business as described in the
Final Memorandum, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business,
other than where the failure to be so qualified or in good standing would not,
singly or in the aggregate, reasonably be expected to have a material adverse
effect on the business, senior management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect");
(f) each of the Company's subsidiaries has been duly incorporated and is
validly existing as a corporation under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering Memorandum, and
has been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not reasonably be expected to have a Material Adverse Effect;
(g) upon the consummation of the Transactions, the authorized capital
stock of the Company will consist of (i) 1,000,000 shares of common stock, par
value $.01 per share, and (ii) 3,100,000 shares of preferred stock consisting of
(x) 3,000,000 shares of Preferred Stock and (y) 100 shares of junior preferred
stock, par value $.01 per share. The outstanding capital stock of the Company
has been duly authorized and is validly issued, fully-paid and non-assessable;
upon the consummation of the Transactions, all of the outstanding shares of
capital stock of each
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subsidiary of the Company will be duly authorized, validly issued, fully-paid
and non-assessable, and (except for any directors' qualifying shares) will be
owned by the Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests and claims other than liens, encumbrances,
security interests and claims created pursuant to the Senior Bank Financing;
(h) this Agreement has been duly authorized, executed and delivered by the
Issuers;
(i) the Notes have been duly authorized by the Company and, when issued
and delivered pursuant to this Agreement and authenticated by the Trustee in
accordance with the Indenture and payment therefor is received, will be duly
executed, authenticated, issued and delivered and will constitute valid and
binding obligations of the Company entitled to the benefits provided by the
Indenture, enforceable against the Company in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles; the Indenture has been duly authorized by the Issuers
and, when executed and delivered by the Issuers (assuming due execution and
delivery by the Trustee), the Indenture will constitute a valid and binding
instrument of the Issuers, enforceable against the Issuers in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Notes and the Indenture will
conform in all material respects to the descriptions thereof in the Final
Memorandum;
(j) the Guarantees have been duly authorized by the Guarantors and, when
issued and delivered as contemplated by this Agreement and the Indenture, will
be duly executed, issued and delivered and will constitute valid and binding
obligations of the Guarantors entitled to the benefits provided by the
Indenture, enforceable against the Guarantors in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles; and the Guarantees will conform in all material
respects to the descriptions thereof in the Final Memorandum;
(k) the Exchange Notes have been duly authorized by the Company and, if
and when duly issued and authenticated in accordance with the terms of the
Indenture and, assuming due authentication of the Exchange Notes by the Trustee,
upon delivery in accordance with the exchange offer provided for in the Notes
Registration Rights Agreement, will be duly executed, authenticated, issued and
delivered and will constitute valid and binding obligations of the Company
entitled to the benefits provided by the Indenture, enforceable against the
Company in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles; and
the Exchange Notes will conform in all material respects to the descriptions
thereof in the Final Memorandum;
(l) the Exchange Guarantees have been duly authorized by the Guarantors
and, if and when, issued and delivered in accordance with the terms of the Notes
Registration Rights Agreement and the Indenture, will be duly executed, issued
and delivered and will constitute
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valid and binding obligations of the Guarantors entitled to the benefits
provided by the Indenture, enforceable against the Guarantors in accordance with
their terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the Exchange Guarantees
will conform in all material respects to the descriptions thereof in the Final
Memorandum;
(m) the Notes Registration Rights Agreement has been duly authorized by
the Issuers and, when duly executed and delivered by the Issuers (assuming due
execution and delivery by the Initial Purchasers), will constitute a valid and
binding agreement of the Issuers, enforceable against the Issuers in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles, except that the
enforceability of any indemnification or contribution provisions thereof may be
limited under applicable securities laws or the public policies underlying such
laws; and the Notes Registration Rights Agreement will conform in all material
respects to the descriptions thereof in the Final Memorandum;
(n) the shares of Preferred Stock have been duly authorized by the Company
and, when issued and delivered pursuant to this Agreement, will be validly
issued, fully-paid and non-assessable and entitled to the rights, privileges and
preferences set forth in the Certificate of Designations, and the issuance of
such shares will not be subject to any preemptive or similar rights; the
Certificate of Designations has been duly authorized by all necessary corporate
and all necessary stockholder action of the Company and, on the Closing Date,
will have been duly executed by the Company and filed with the Secretary of
State of Delaware; and the Preferred Stock and the Certificate of Designations
will conform in all material respects to the descriptions thereof in the Final
Memorandum;
(o) the unissued shares of New Preferred Stock have been duly authorized
by the Company and, if and when issued by the Company in accordance with the
exchange offer provided for in the Preferred Stock Registration Rights
Agreement, will be fully-paid and non-assessable and entitled to the rights,
privileges and preferences set forth in the Certificate of Designations, and the
issuance of such shares will not be subject to any preemptive or similar rights;
and the New Preferred Stock will conform in all material respects to the
descriptions thereof in the Final Memorandum;
(p) the Preferred Stock Registration Rights Agreement has been duly
authorized by the Company and, when duly executed and delivered by the Company
(assuming due execution and delivery by the Initial Purchasers), will constitute
a valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles, except that the
enforceability of any indemnification or contribution provisions thereof may be
limited under applicable securities laws or the public policies underlying such
laws; and the Preferred Stock Registration Rights Agreement will conform in all
material respects to the descriptions thereof in the Final Memorandum;
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(q) the Contribution Agreement has been duly authorized, executed and
delivered by the Company;
(r) the filing of the Certificate of Designations by the Company with the
Secretary of State of Delaware does not conflict with or result in a breach or
violation of any of the terms or provisions of, or (with the giving of notice or
the lapse of time or both) constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the properties or assets of the
Company or any of its subsidiaries is subject;
(s) neither the Company nor any of its subsidiaries is, or with the giving
of notice or lapse of time or both would be, in violation of or in default
under, its certificate of incorporation or by-laws or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them or
any of their respective properties is bound, except, in the case of any
indenture, mortgage, deed of trust, loan agreement or other agreement, for
violations and defaults which would not have a Material Adverse Effect;
(t) the execution and delivery of this Agreement, the Certificate of
Designations, the Notes Registration Rights Agreement, the Preferred Stock
Registration Rights Agreement, the Exchange Indenture and the Indenture, the
performance by the Company and the Guarantors of their respective obligations
hereunder and thereunder and the consummation of the transactions contemplated
hereby and thereby will not (i) violate the certificate or articles of
incorporation (as applicable) or bylaws of the Company or any Guarantor, (ii)
constitute a violation by the Company or any Guarantor of any applicable
provision of any law, statute or regulation, except for violations which would
not have a Material Adverse Effect, or (iii) breach, or result in a default
under any agreement known to the Company's executive officers to be material to
the Company and its subsidiaries taken as a whole, except for conflicts or
breaches which would not have a Material Adverse Effect, and no consent,
approval, authorization, order, license, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Issuers of the other
Transactions, except such consents, approvals, authorizations, orders, licenses,
registrations or qualifications (i) as have been obtained, (ii) as may be
required under (A) state securities or blue sky laws in connection with the
purchase and distribution of the Securities by the Initial Purchasers, (B) the
Securities Act with respect to the registration of the Exchange Notes, the New
Preferred Stock and the New Exchange Debentures pursuant to the terms of the
Notes Registration Rights Agreement and the Preferred Stock Registration Rights
Agreement, as applicable or (C) the Trust Indenture Act of 1939, as amended (the
"TIA"), with respect to the registration of the Exchange Notes and the New
Exchange Debentures pursuant to the terms of the Notes Registration Rights
Agreement and the Preferred Stock Registration Rights Agreement, as applicable
or (iii) the failure to obtain of which would not have a Material Adverse
Effect;
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(u) the fair saleable value of the assets of the Company exceeds the
amount that will be required to be paid on or in respect of the existing debts
and other liabilities (including contingent liabilities) of the Company as they
mature; the assets of the Company do not constitute unreasonably small capital
to carry out its business as conducted or as proposed to be conducted; the
Company does not intend to, and does not believe that it will, incur debts
beyond its ability to pay such debts as they mature; upon the consummation of
the Transactions, the fair saleable value of the assets of the Company and its
subsidiaries taken as a whole, will exceed the amount that will be required to
be paid on or in respect of the existing debts and other liabilities (including
contingent liabilities) of the Company and its subsidiaries, taken as a whole,
as they mature; the assets of the Company and its subsidiaries do not, and upon
the consummation of the Transactions will not, constitute unreasonably small
capital for the Company and its subsidiaries to carry out their respective
businesses as now conducted or as proposed to be conducted including the capital
needs of the Company and its subsidiaries, and projected capital requirements of
the business conducted by the Company and each of its subsidiaries, and
projected capital requirements and capital availability thereof; and the Company
does not intend to, and does not intend to permit any of its subsidiaries to,
incur debts beyond their respective ability to pay such debts as they mature;
(v) other than as set forth or contemplated in the Final Memorandum, there
are no legal or governmental investigations of which the Company has received
notice or proceedings pending against or affecting the Company or any of its
subsidiaries or any of their respective properties which, if determined
adversely to the Company or any of its subsidiaries, would reasonably be
expected to have a Material Adverse Effect; and, to the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(w) there are no court and administrative orders, writs, judgments and
decrees specifically directed to the Company or any of its subsidiaries and
known to the Company's executive officers to be material to the Company and its
subsidiaries taken as a whole;
(x) the Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described or referred to in the Offering
Memorandum or such as would not have a Material Adverse Effect; and any real
property and buildings held under lease or cutting rights by the Company and its
subsidiaries are held by them under valid, existing and enforceable leases or
other agreements with such exceptions as would not have a Material Adverse
Effect;
(y) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its business as conducted as of
the date hereof and as of the Closing Date in each case except as disclosed in
the Offering Memorandum and except where such
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failure to own, possess or obtain necessary licenses, permits, certificates,
consents, orders, approvals or authorizations or failure to make necessary
declarations and filings would not, singly or in the aggregate, have a Material
Adverse Effect, and neither the Company nor any such subsidiary has received any
actual notice of any proceeding relating to revocation or modification of any
such license, permit, certificate, consent, order, approval or other
authorization, except as described in the Offering Memorandum and except as
would not have a Material Adverse Effect; and each of the Company and its
subsidiaries is in compliance with all laws and regulations (other than
Environmental Laws (as defined herein)) relating to the conduct of its business
as conducted as of the date hereof and as of the Closing Date, except where the
failure to comply would not have a Material Adverse Effect;
(z) 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 as disclosed in the Offering Memorandum or 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;
(aa) in the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities; on the basis of such
review, the Company has reasonably concluded that, except as disclosed in the
Offering Memorandum, such associated costs and liabilities would not, singly or
in the aggregate, have a Material Adverse Effect;
(bb) when the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the meaning of
Rule 144A under the Securities Act) as any securities that are listed on a
national securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system;
(cc) neither the Company nor any affiliate (as defined in Rule 501(b) of
Regulation D) of the Company has directly, or through any agent, sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
security which is or will be integrated with the sale of the Securities in a
manner that would require the registration under the Securities Act of the
offering and sale of the Securities;
(dd) none of the Issuers, any affiliate of the any Issuer or any person
acting on its or their behalf (other than the Initial Purchasers, as to whom the
Issuers make no representation) has offered or sold any Securities by means of
any general solicitation or general advertising within the meaning of Rule
502(c) under the Act or, with respect to Notes sold outside the United States to
non-U.S. persons (as defined in Rule 902 under the Securities Act), by means of
any directed
11
selling efforts within the meaning of Rule 902 under the Securities Act and the
Company, any affiliate of the Company and any person acting on its or their
behalf has complied with and will implement the "offering restrictions"
requirements of Regulation S;
(ee) the Notes offered and sold in reliance on Regulation S have been and
will be offered and sold only in offshore transactions;
(ff) prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has constituted or
which might have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in connection with the
offering of the Securities;
(gg) none of the transactions contemplated by this Agreement (including,
without limitation, the use of the proceeds from the sale of the Securities)
will violate or result in a violation of Section 7 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or any regulation promulgated
thereunder, including, without limitation, Regulations T, U, and X of the Board
of Governors of the Federal Reserve System;
(hh) Xxxxxx Xxxxxxxx LLP, who has certified certain historical financial
information of the containerboard and corrugated packaging products group of TPI
and its subsidiaries and Ernst & Young LLP, who has certified certain pro forma
financial information of the Company and its subsidiaries, are each, to the
Company's knowledge, independent public accountants as required by the
Securities Act;
(ii) no Issuer is, or after giving effect to the offering and sale of the
Securities and the application of the proceeds therefrom as described in the
Final Memorandum, will be an "investment company" or an entity "controlled" by
an "investment company" as such terms are defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act"); and
(jj) assuming the accuracy of the representations of the Initial
Purchasers contained in Section 2 hereof, it is not necessary in connection with
the offer, sale and delivery of the Securities in the manner contemplated by
this Agreement and the Offering Memorandum to register the Securities under the
Securities Act or to qualify the Indenture or the Exchange Indenture under the
TIA.
5. The Issuers, jointly and severally, covenant and agree with each of the
several Initial Purchasers as follows:
(a) to deliver to the Initial Purchasers as many copies of the Preliminary
Memorandum and the Final Memorandum (including all amendments and supplements
thereto) as the Initial Purchasers or their counsel may reasonably request;
(b) before distributing any amendment or supplement to the Offering
Memorandum, to furnish to the Initial Purchasers a copy of the proposed
amendment or supplement for review
12
and not to distribute any such proposed amendment or supplement to which the
Initial Purchasers or their counsel reasonably object;
(c) if, at any time prior to the expiration of nine months after the date
of the Final Memorandum, any event shall occur as a result of which it is
necessary in the reasonable opinion of counsel to the Initial Purchasers to
amend or supplement the Final Memorandum in order to make the statements
contained therein, in the light of the circumstances when such Final Memorandum
is delivered, not misleading, or if in the reasonable opinion of counsel to the
Initial Purchasers it is necessary to amend or supplement the Final Memorandum
to comply with law, forthwith to prepare and furnish, at the expense of the
Issuers, to the Initial Purchasers and to the dealers (whose names and addresses
the Initial Purchasers will furnish to the Issuers) to which Securities may have
been sold by the Initial Purchasers and to any other dealers upon request, such
reasonable number of amendments or supplements to the Final Memorandum as may be
necessary so that the statements in the Final Memorandum as so amended or
supplemented will not, in light of the circumstances when the Final Memorandum
is delivered, be misleading or so that the Final Memorandum will comply with
law;
(d) to cooperate with the Initial Purchasers and their counsel in
connection with the qualification of the Securities for offer and sale under the
state securities or blue sky laws of such jurisdictions as the Initial
Purchasers shall reasonably request and to comply with such laws and to continue
such qualification in effect so long as reasonably required for distribution of
the Securities; provided that none of the Issuers shall be required to qualify
as a foreign corporation or to file a general consent to service of process in
any jurisdiction;
(e) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of their obligations hereunder,
including all fees, costs and expenses (i) incurred by the Company incident to
the preparation, issuance, execution, authentication and delivery of the
Securities, including any expenses of the Trustee or the Exchange Trustee, (ii)
incurred by the Company incident to the preparation, printing and distribution
of the Preliminary Memorandum and the Final Memorandum (including in each case
all exhibits, amendments and supplements thereto), (iii) incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as the Initial
Purchasers may reasonably designate (including reasonable fees of counsel for
the Initial Purchasers and their reasonable disbursements in connection
therewith), (iv) in connection with the approval for trading of the Securities
on any securities exchange or inter-dealer quotation system (as well as in
connection with the designation of the Securities as PORTAL securities, if so
requested), (v) in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, the Indenture, the
Certificate of Designations, the Exchange Indenture and the Preliminary and
Final Blue Sky Memoranda and the furnishing to the Initial Purchasers and
dealers of copies of the Offering Memorandum, including mailing and shipping, as
herein provided and (vi) payable to rating agencies in connection with the
rating of the Securities; provided, however, that except as provided in this
Section and Sections 1, 7 and 10 hereof, the Initial Purchasers will pay all of
their own fees, costs and expenses incurred in their capacity as Initial
Purchasers, including the fees and expenses of their counsel, transfer
13
taxes on resale of any of the Securities by them and any advertising expenses
connected with any offers they may make; provided further, however, that the
Company agrees to pay or cause to be paid 50% of all fees, costs and expenses in
connection with "road show" presentations to potential investors in an amount
not to exceed $150,000;
(f) to use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified and under the circumstances
assumed in the Final Memorandum under the caption "Use of Proceeds";
(g) during the period beginning after the date hereof and continuing until
the date six months after the Closing Date, not to offer, sell, contract to
sell, or otherwise dispose of any securities of the Company that are
substantially similar to the Securities without the consent of the Initial
Purchasers;
(h) not to take any action prohibited by Regulation M under the Exchange
Act in connection with the distribution of the Securities contemplated hereby;
(i) that none of the Issuers, any of their affiliates (as defined in Rule
501(b) under the Securities Act) or any person acting on behalf of the Company
or such affiliate will solicit any offer to buy or offer or sell the Securities
by means of any form of general solicitation or general advertising, including:
(i) any advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio; and
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising;
(j) that none of the Issuers, any of their affiliates (as defined in Rule
144(a)(1) under the Securities Act) or any person acting on behalf of any of the
foregoing will engage in any directed selling efforts with respect to the
Securities within the meaning of Regulation S;
(k) that none of the Company, any of its affiliates (as defined in
Regulation 501(b) of Regulation D) or any person acting on behalf of any of the
foregoing 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
will be integrated with the sale of the Securities in a manner which would
require the registration under the Securities Act of the Securities and the
Issuers will take all action that is appropriate or necessary to assure that
their offerings of other securities will not be integrated for purposes of the
Securities Act with the offerings contemplated hereby;
(l) to obtain the approval of DTC for "book-entry" transfer of the
Securities;
(m) if requested by the Initial Purchasers, to use their best efforts to
cause the Securities to be eligible for the PORTAL trading system of the
National Association of Securities Dealers, Inc.;
(n) in the case of the Company, to cause the Guarantors to become party to
this Agreement by executing the signature pages hereto immediately after the
consummation of the Contribution; and
14
(o) to use their reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by them
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Securities.
6. The several obligations of the Initial Purchasers hereunder to purchase
the Securities on the Closing Date are subject to the performance by the Issuers
of their obligations hereunder and to the following additional conditions:
(a) the representations and warranties of the Issuers contained herein are
true and correct on and as of the Closing Date as if made on and as of the
Closing Date and the Issuers shall have complied with all agreements and all
conditions on their part to be performed or satisfied hereunder at or prior to
the Closing Date;
(b) subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have occurred any downgrading, suspension
or withdrawal in the rating accorded any securities of the Company by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act and no such organization
shall have publicly announced that it has under surveillance or review, with
negative implications, its rating of any of the Company's securities;
(c) since the respective dates as of which information is given in the
Offering Memorandum there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any material adverse
change or any development which would reasonably be expected to result in a
material adverse change, in or affecting the business, senior management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Final Memorandum, the effect of which in the judgment of the
Initial Purchasers makes it impracticable or inadvisable to proceed with the
offerings or the delivery of the Securities on the Closing Date on the terms and
in the manner contemplated in the Offering Memorandum;
(d) the Initial Purchasers shall have received on and as of the Closing
Date a certificate of an officer of each of the Issuers, with specific knowledge
about such Issuers' financial matters, reasonably satisfactory to the Initial
Purchasers to the effect set forth in subsections (a) and (b) of this Section;
(e) Xxxxxxxx & Xxxxx, counsel for the Company, shall have furnished to the
Initial Purchasers its written opinion, substantially in the form of Exhibit A
attached hereto;
(f) Xxxxxx & Block, counsel for TPI, shall have furnished to the Initial
Purchasers its written opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers, to the effect that:
(i) each of the Guarantors has been duly incorporated; and
(ii) each of the Guarantors has all necessary corporate power and
authority necessary to own its properties and to conduct its
containerboard and corrugated
15
packaging products business in the manner and in the locations presently
owned and conducted;
(g) on the date of the Offering Memorandum and on the Closing Date, Xxxxxx
Xxxxxxxx LLP and Ernst & Young LLP shall have each furnished to the Initial
Purchasers letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to the Initial Purchasers, containing statements and
information of the type customarily included in accountants "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Offering Memorandum;
(h) the Initial Purchasers shall have received an opinion of Xxxxxx &
Xxxxxxx, counsel to the Initial Purchasers, dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers;
(i) the Initial Purchasers shall have received a certificate of the
Company, dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers and counsel for the Initial Purchasers, as to the solvency of
the Company following the Transactions;
(j) the Securities shall have been approved for trading and duly listed on
PORTAL;
(k) the Initial Purchasers shall have received counterparts, conformed as
executed, of the Indenture which shall have been entered into by the Company,
the Guarantors and the Trustee;
(l) the Certificate of Designations shall have been duly filed and
recorded with the Secretary of State of Delaware;
(m) the Initial Purchasers shall have received counterparts, conformed as
executed, of the Exchange Indenture which shall have been entered into by the
Company and the Exchange Trustee;
(n) the Initial Purchasers shall have received counterparts, conformed as
executed, of the Notes Registration Rights Agreement which shall have been
entered into by the Company and the Initial Purchasers;
(o) the Initial Purchasers shall have received counterparts, conformed as
executed, of the Preferred Stock Registration Rights Agreement which shall have
been entered into by the Company and the Initial Purchasers;
(p) the Contribution and the Senior Bank Financing shall be consummated
prior to or simultaneously with the offering of the Securities on the terms
described in the Offering Memorandum and the Initial Purchasers shall have
received counterparts, conformed as executed, of the exhibits to the
Contribution Agreement described in the Offering Memorandum under the caption
"Certain Transactions," the documents governing the Senior Bank Financing and
such other documentation as they deem necessary to evidence the consummation
thereof;
16
(q) in the case of the offering and sale of the Notes, the offering and
sale of the Preferred Stock shall have been consummated prior to or
simultaneously with the offering and sale of the Notes; and
(r) on or prior to the Closing Date the Company shall have furnished to
the Initial Purchasers such further certificates and documents as the Initial
Purchasers shall reasonably request.
7. The Issuers, jointly and severally, agree to indemnify and hold
harmless each Initial Purchaser, each affiliate of any Initial Purchaser which
assists such Initial Purchaser in the distribution of the Securities 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, from and
against any and all losses, claims, damages and liabilities (including without
limitation the legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) caused by any untrue statement
or alleged untrue statement of a material fact contained in the Offering
Memorandum (and any amendment or supplement thereto if the Company shall have
furnished any amendments or supplements thereto) or any preliminary offering
memorandum, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Initial Purchaser furnished to the Company in writing by such
Initial Purchaser expressly for use therein; provided, however, that the
indemnification contained in this paragraph shall not inure to the benefit of
the Initial Purchasers (or to the benefit of any person controlling the Initial
Purchasers) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Securities by the Initial Purchasers to any person
if a copy of the Final Memorandum (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) shall not
have been delivered or sent to such person and any untrue statement of a
material fact contained in, and any omission or alleged omission of a material
fact from, such Offering Memorandum was corrected in the Final Memorandum (as so
amended or supplemented) and it shall have been determined that any Initial
Purchaser and each person, if any, who controls such Initial Purchasers would
not have incurred such losses, claims, damages, liabilities and expenses had the
Final Memorandum been delivered or sent.
Each Initial Purchaser agrees, severally and not jointly, to indemnify and
hold harmless the Issuers, their directors, their officers and each person who
controls the Issuers 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 Issuers to each Initial Purchaser, but only with reference to
information relating to such Initial Purchaser furnished to the Company in
writing by such Initial Purchaser expressly for use in the Offering Memorandum
or any amendment or supplement thereto.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified
17
Person") shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Person") in writing, and the Indemnifying Person, upon
request of the Indemnified Person, shall retain counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm (in addition to any
local counsel) for all Indemnified Persons, and that all such reasonable fees
and expenses shall be reimbursed as they are incurred. Any such separate firm
for the Initial Purchasers, each affiliate of any Initial Purchaser which
assists such Initial Purchaser in the distribution of the Securities and such
control persons of the Initial Purchasers shall be designated in writing by X.X.
Xxxxxx Securities Inc. and any such separate firm for the Issuers, their
directors, their officers and such control persons of the Issuers shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuers on the one hand and the Initial Purchasers on
the other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Issuers on the one
hand and the Initial Purchasers on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Issuers on the one hand and the Initial Purchasers on the other
shall be deemed to be in the same respective proportions as the net proceeds
from the offering (before deducting expenses) received
18
by the Issuers and the total discounts and commissions received by the Initial
Purchasers, bear to the aggregate offering price of the Securities. The relative
fault of the Issuers on the one hand and the Initial Purchasers on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Issuers 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 Issuers and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Initial Purchasers or the Issuers 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 the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an Initial
Purchaser be required to contribute any amount in excess of the amount by which
the total price at which the Securities purchased by it were offered 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 Initial
Purchasers' obligations to contribute pursuant to this Section 7 are several in
proportion to the respective principal amount of the Securities set forth
opposite their names in Schedule I hereto, and not joint. The Issuers'
obligations to contribute pursuant to this Section 7 are joint and several.
The remedies provided for in this Section 7 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.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Issuers and the Initial Purchasers set
forth 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 Issuers, their officers, their directors or
any other person controlling the Issuers and (iii) acceptance of and payment for
any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Initial Purchasers, by notice given
to the Issuers, 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 National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago
19
Board of Trade, (ii) trading of any securities of or guaranteed by the Company
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a general moratorium on commercial banking activities in New York shall
have been declared by Federal, New York State or Illinois authorities, or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Initial Purchasers, is material and adverse and which, in the judgment of
the Initial Purchasers, makes it impracticable to market the Securities on the
terms and in the manner contemplated in the Offering Memorandum.
9. This Agreement shall become effective as to the Company and the Initial
Purchasers upon the execution and delivery hereof by the Company and the Initial
Purchasers. This Agreement shall become effective as to the Guarantors upon the
execution and delivery hereof by the Guarantors.
If, on the Closing Date, either of the Initial Purchasers shall fail or
refuse to purchase Securities which it has agreed to purchase hereunder on such
date, and the aggregate principal amount or liquidation preference of the
Securities which such defaulting Initial Purchaser agreed but failed or refused
to purchase is not more than one-tenth of the aggregate principal amount or
liquidation preference of the Securities to be purchased on such date, the other
Initial Purchaser shall be obligated to purchase the Securities which such
defaulting Initial Purchaser agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount or liquidation
preference of the Securities that any Initial Purchaser has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-tenth of such principal amount or liquidation preference of the
Securities without the written consent of such Initial Purchaser. If, on the
Closing Date, any Initial Purchaser shall fail or refuse to purchase Securities
which it has agreed to purchase hereunder on such date, and the aggregate
principal amount or liquidation preference of Securities with respect to which
such default occurs is more than one-tenth of the aggregate principal amount or
liquidation preference of the Securities to be purchased on such date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities 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 the Company. In any such case either the
Initial Purchasers 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 Offering 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.
10. If this Agreement shall be terminated by the Initial Purchasers, or
either of them, because of any failure or refusal on the part of any of the
Issuers to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Issuers shall be unable to perform their
obligations under this Agreement or any condition of the Initial Purchasers'
obligations cannot be fulfilled, the Issuers agree to reimburse the Initial
Purchasers or such Initial Purchaser as has so terminated this Agreement with
respect to itself, for all out-of-pocket
20
expenses (including the reasonable fees and expenses of its counsel) reasonably
incurred by such Initial Purchaser in connection with this Agreement or the
offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Issuers, the Initial Purchasers, each affiliate of any Initial Purchaser which
assists such Initial Purchaser in the distribution of the Securities, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Securities from any Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
12. Any action by the Initial Purchasers hereunder may be taken by the
Initial Purchasers jointly or by X.X. Xxxxxx Securities Inc. alone on behalf of
the Initial Purchasers, and any such action taken by the Initial Purchasers
jointly or by X.X. Xxxxxx Securities Inc. alone shall be binding upon the
Initial Purchasers. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Initial Purchasers shall
be given to the Initial Purchasers at X.X. Xxxxxx Securities Inc., 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (telefax: 212-648-5560), Attention: Syndicate
Department, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (telefax: (000) 000-0000), Attention: Xxxx X. Xxxxxxxxx. Notices to
the Issuers shall be given to them at Packaging Corporation of America, 0000
Xxxx Xxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx 00000 (telefax: (000)-000-0000),
Attention: Xxxx X. Xxxxxx, with a copy to Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000 (telefax: (000) 000-0000), Attention: Xxxxxxx X.
Xxxxxx, P.C.
13. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
[signature page follows]
21
If the foregoing is in accordance with your understanding, please sign and
return six counterparts hereof.
Very truly yours,
PACKAGING CORPORATION OF AMERICA
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Secretary
DAHLONEGA PACKAGING CORPORATION
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: Secretary
XXXXX CONTAINER CORPORATION
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: Secretary
PCA HYDRO, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: Secretary
PCA TOMAHAWK CORPORATION
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: Secretary
22
PCA VALDOSTA CORPORATION
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: Secretary
23
Accepted: March 30, 1999
X.X. XXXXXX SECURITIES INC.
BT XXXX.XXXXX INCORPORATED
By: X.X. Xxxxxx Securities Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
24
EXHIBIT A
April 12, 1999
X.X. Xxxxxx Securities Inc.
BT Xxxx. Xxxxx Incorporated
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0060
Ladies/Gentlemen:
We are issuing this opinion letter in our capacity as special legal counsel
to Packaging Corporation of America (the "COMPANY") in response to the
requirement in Section 6(e) of the Purchase Agreement (the "PURCHASE AGREEMENT")
dated as of March 30, 1999 among the Company and X.X. Xxxxxx Securities Inc. and
BT Xxxx. Xxxxx Incorporated (collectively, the "INITIAL PURCHASERS"), and the
Guarantors (as defined below).
All capitalized terms used herein and not defined herein shall have the
meanings given to such terms in the Purchase Agreement. Together, the Purchase
Agreement, the Indenture, the Exchange Indenture, the Certificate of
Designations, the Notes Registration Rights Agreement, the Preferred Stock
Registration Rights Agreement, the Notes, the Preferred Stock and the Guarantees
are referred to herein as the "TRANSACTION AGREEMENTS." The following
subsidiaries of the Company are referred to herein as the "GUARANTORS":
Dahlonega Packaging Corporation ("DPC"), Xxxxx Container Corporation ("DCC"),
PCA Hydro, Inc. ("PCA HYDRO"), PCA Tomahawk Corporation ("PCA TOMAHAWK") and PCA
Valdosta Corporation ("PCA VALDOSTA").
In arriving at the opinions expressed herein, among other things, we have
examined the following:
(a) the Offering Memorandum of the Company, dated March 30, 1999,
covering the offering and sale of the Notes and Preferred Stock
(the "OFFERING MEMORANDUM");
(b) executed originals of the Purchase Agreement and the Certificate
of Designations;
(c) executed originals of the Indenture, the Exchange Indenture, the
Notes Registration Rights Agreement, the Preferred Stock
Registration Rights Agreement, the Notes, the Preferred Stock and
the Guarantees to be delivered on the date hereof; and
X.X. Xxxxxx Securities Inc.
BT Xxxx. Xxxxx Incorporated
April 12, 1999
Page 2
(d) copies of all certificates and other documents delivered in
connection with the sale of the Notes and Preferred Stock on the
date hereof and the consummation of the other transactions
contemplated by the Purchase Agreement.
Subject to the assumptions, qualifications, exclusions and other
limitations which are identified in this letter, we advise you that:
1. The Company was duly incorporated under the General Corporation Law of the
State of Delaware.
2. The Company is existing and in good standing under the General Corporation
Law of the State of Delaware. For purposes of the opinions in this
paragraph, we have relied exclusively upon the certificates issued by the
governmental authorities in the State of Delaware and such opinions are not
intended to provide any conclusion or assurance beyond that conveyed by
such certificates.
3. Each of DPC, PCA Hydro, PCA Tomahawk and PCA Valdosta is existing and in
good standing under the General Corporation Law of the State of Delaware.
DCC is existing and in good standing under the Virginia Stock Corporation
Act. For purposes of the opinions in this paragraph, we have relied
exclusively upon the certificates issued by the governmental authorities in
the required jurisdictions and such opinions are not intended to provide
any conclusion or assurance beyond that conveyed by such certificates.
4. As of the date hereof, the authorized capital stock of the Company consists
of (A) 1,000,000 shares of common stock, par value $0.01 per share, and
(B) 3,000,100 shares of preferred stock consisting of (x) 3,000,000 shares
of Senior Exchangeable Preferred Stock due 2010, par value $0.01 per share,
and (y) 100 shares of Junior Preferred Stock, par value $0.01 per share.
The outstanding capital stock of the Company has been duly authorized and
is validly issued, fully paid and non-assessable.
5. As of the date hereof, based solely upon our review of the stock ledgers of
each of the Guarantors, the Company is the record holder of all of the
outstanding shares of capital stock of each of the Guarantors.
X.X. Xxxxxx Securities Inc.
BT Xxxx. Xxxxx Incorporated
April 12, 1999
Page 3
6. Each of the Company and each Guarantor has the corporate power to enter
into and perform its obligations under the Transaction Agreements to which
it is a party, including, in the case of the Company, the corporate power
to issue, sell and deliver the Notes and the Preferred Stock and, in the
case of the Guarantors, to issue and deliver the Guarantees, in each case
as contemplated by the Purchase Agreement. The Company has the corporate
power to own and lease its properties and to conduct its business as
described in the Offering Memorandum.
7. The Board of Directors of each of the Company and the Guarantors has
adopted by requisite vote the resolutions necessary to authorize the
execution, delivery and performance of the Transaction Agreements to which
the Company or a Guarantor is a party, as the case may be. No approval by
the stockholders of the Company or the Guarantors is required.
8. Each of the Company and each Guarantor has duly executed and delivered the
Purchase Agreement, the Indenture, the Exchange Indenture, the Notes
Registration Rights Agreement and the Preferred Stock Registration Rights
Agreement.
9. Each of the Indenture, the Exchange Indenture, the Notes Registration
Rights Agreement and the Preferred Stock Registration Rights Agreement is a
valid and binding obligation of the Company and each Guarantor and
(assuming the due authorization, execution and delivery thereof by the
other parties thereto) is enforceable against each of the Company and each
Guarantor in accordance with its terms.
10. The Notes have been duly executed and delivered by the Company and, when
paid for by the Initial Purchasers in accordance with the terms of the
Purchase Agreement (assuming the due authorization, execution and delivery
of the Indenture by the Trustee and due authentication by the Trustee in
accordance with the Indenture), will have been validly issued and will
constitute the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture.
11. The Guarantees have been duly executed and delivered by each of the
Guarantors and, when the Notes are duly and validly authorized, executed,
issued and authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms of the
Purchase Agreement, will have been validly issued and will be the valid and
binding obligations of each of the Guarantors, enforceable against each of
the Guarantors in accordance with their terms and entitled to the benefits
of the Indenture.
X.X. Xxxxxx Securities Inc.
BT Xxxx. Xxxxx Incorporated
April 12, 1999
Page 4
12. The shares of Preferred Stock have been duly delivered by the Company and,
when paid for by the Initial Purchasers in accordance with the terms of the
Purchase Agreement, will have been validly issued, fully-paid and
non-assessable, and nothing has come to our attention that has caused us to
conclude that the issuance of such shares will be subject to any preemptive
or similar rights. The Company has duly authorized and executed the
Certificate of Designations and filed the Certificate of Designations with
the Secretary of State of Delaware.
13. The Board of Directors of each of the Company and the Guarantors has
adopted by requisite vote the resolutions necessary to authorize the
execution, delivery and performance of, in the case of the Company, the
Exchange Notes and the New Preferred Stock and, in the case of the
Guarantors, the Exchange Guarantees. No approval by the stockholders of
the Company or the Guarantors is required.
14. The information in the Offering Memorandum under the headings "Description
of Notes" and "Description of Preferred Stock," insofar as such statements
purport to summarize certain provisions of the Indenture, the Exchange
Indenture, the Certificate of Designations, the Notes, the Preferred Stock,
the Guarantees, the Notes Registration Rights Agreement or the Preferred
Stock Registration Rights Agreement, is correct in all material respects.
15. The execution and delivery of the Purchase Agreement, the Certificate of
Designations, the Notes Registration Rights Agreement, the Preferred Stock
Registration Rights Agreement, the Exchange Indenture and the Indenture,
the performance by the Company and the Guarantors of their respective
obligations thereunder and the consummation of the transactions
contemplated thereby do not and will not (i) violate the certificate or
articles of incorporation (as applicable) or bylaws of the Company or any
Guarantor, (ii) constitute a violation by the Company or any Guarantor of
any applicable provision of any law, statute or regulation (except that we
express no opinion in this paragraph with respect to compliance with any
disclosure requirement or any prohibition against fraud or
misrepresentation or as to whether performance of the indemnification or
contribution provisions in the Purchase Agreement, the Notes Registration
Rights Agreement or the Preferred Stock Registration Rights Agreement would
be permitted) or (iii) breach, or result in a default under, any existing
obligation of the Company or any Guarantor under any of its Other Specified
Agreements. The term "Other Specified Agreements" in the preceding
sentence means those agreements set forth on SCHEDULE A attached hereto.
X.X. Xxxxxx Securities Inc.
BT Xxxx. Xxxxx Incorporated
April 12, 1999
Page 5
16. To our actual knowledge, no consent, waiver, approval, authorization or
order of any court or governmental authority is required for the issuance
and sale by the Company of the Notes or the Preferred Stock, or the
issuance of the Guarantees by the Guarantors to the Initial Purchasers or
the consummation by the Company and the Guarantors of the other
transactions contemplated by the Transaction Agreements, except such as may
be required under the Act, the Exchange Act and the Trust Indenture Act of
1939, as amended (the "1939 ACT"), in connection with the Notes
Registration Rights Agreement and the Preferred Stock Registration Rights
Agreement.
17. To our actual knowledge, no legal or governmental investigations or
proceedings are pending or overtly threatened to which the Company or the
Guarantors is a party or to which the property or assets of the Company or
the Guarantors is subject (i) that would be required under Item 103 of
Regulation S-K under the Act to be disclosed in a registration statement or
a prospectus delivered at the time of confirmation of the sale of any
offering of securities registered under the Act (assuming for purposes
hereof that such Item would be applicable to the Offering Memorandum
(although it is not)) that are not described in the Offering Memorandum or
(ii) which seeks to restrain, enjoin or prevent the consummation of or
otherwise challenge the issuance or sale of the Notes or the Preferred
Stock to be sold to the Initial Purchasers or the consummation of the other
transactions contemplated by the Transaction Agreements.
18. No registration under the Act of the Notes or the Preferred Stock is
required in connection with the sale of the Notes or the Preferred Stock to
the Initial Purchasers in the manner contemplated by the Purchase Agreement
and the Offering Memorandum or in connection with the initial resale of the
Notes and the Preferred Stock by the Initial Purchasers in accordance with
Section 2 of the Purchase Agreement, and prior to the consummation of the
exchange offer provided for in the Notes Registration Rights Agreement or
the effectiveness of the Shelf Registration Statement (as defined in the
Notes Registration Rights Agreement), the Indenture is not required to be
qualified under the 1939 Act, in each case assuming (i) that the purchasers
who buy such Notes or Preferred Stock in the initial resale thereof are,
(x) in the case of offers of the Notes or Preferred Stock made within the
United States, "qualified institutional buyers" as defined in Rule 144A as
promulgated under the Act and (y) in the case of offers of the Notes made
outside the United States, to persons other than "U.S. persons" as defined
in Regulation S as promulgated under the Act, (ii) the accuracy and
completeness of the representations of the Company (other than those
contained in
X.X. Xxxxxx Securities Inc.
BT Xxxx. Xxxxx Incorporated
April 12, 1999
Page 6
Section 4(jj)) and of the Initial Purchasers contained in the Purchase
Agreement in connection with the sale of the Notes and the Preferred Stock
to the Initial Purchasers and the initial resale thereof and (iii) the due
performance by the Initial Purchasers of the agreements set forth in the
Purchase Agreement.
19. As of the date hereof, neither the Notes nor the Preferred Stock is of the
same class (within the meaning of Rule 144A under the Act) as securities of
the Company or any Guarantor that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are quoted
in a United States automated inter-dealer quotation system.
20. Neither the Company nor any Guarantor is, or immediately after the sale of
the Notes and the Preferred Stock to the Initial Purchasers and application
of the net proceeds therefrom as described in the Offering Memorandum under
the caption "Use of Proceeds" will be, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended.
------------
The purpose of our professional engagement was not to establish factual
matters, and preparation of the Offering Memorandum involved many determinations
of a wholly or partially nonlegal character. We make no representation that we
have independently verified the accuracy, completeness or fairness of the
Offering Memorandum or that the actions taken in connection with the preparation
of the Offering Memorandum (including the actions described in the next
paragraph) were sufficient to cause the Offering Memorandum to be accurate,
complete or fair. We are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the Offering Memorandum except to
the extent otherwise explicitly indicated in numbered paragraph 14 above.
We can, however, confirm that we have participated in conferences with
representatives of the Company, representatives of the Initial Purchasers,
counsel for the Initial Purchasers and representatives of the independent
accountants for the Company during which disclosures in the Offering Memorandum
and related matters were discussed. In addition, we have reviewed certain
corporate records furnished to us by the Company.
Based upon our participation in the conferences and our document review
identified in the preceding paragraph, our understanding of applicable law and
the experience we have gained in our
X.X. Xxxxxx Securities Inc.
BT Xxxx. Xxxxx Incorporated
April 12, 1999
Page 7
practice thereunder and relying as to materiality to the extent we deem
appropriate upon the opinions and statements of officers of the Company, we can,
however, advise you that nothing has come to our attention that has caused us to
conclude that the Offering Memorandum (other than the financial statements and
related notes and the other financial, statistical and accounting data included
in the Offering Memorandum, as to which no advice is given) as of its date or as
of the date hereof, contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
------------
Except for the activities described in the immediately preceding section of
this letter, we have not undertaken any search of court records or undertaken
any other investigation to determine the facts upon which the advice in this
letter is based.
We have assumed for purposes of this letter: each document we have
reviewed for purposes of this letter is accurate and complete, each such
document that is an original is authentic, each such document that is a copy
conforms to an authentic original, and all signatures on each such document are
genuine; that the Purchase Agreement and every other agreement we have examined
for purposes of this letter constitutes a valid and binding obligation of each
party to that document and that each such party has satisfied all legal
requirements that are applicable to such party to the extent necessary to
entitle such party to enforce such agreement (except that we make no such
assumptions with respect to the Company and the Guarantors); and that you have
acted in good faith and without notice of any fact which has caused you to reach
any conclusion contrary to any of the advice provided in this letter. We have
also made other assumptions which we believe to be appropriate for purposes of
this letter.
In preparing this letter we have relied without independent verification
upon: (i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Purchase
Agreement and other documents specifically identified at the beginning of this
letter as having been read by us; (iii) factual information provided to us by
the Company and the Guarantors or their representatives; and (iv) factual
information we have obtained from such other sources as we have deemed
reasonable. We have assumed that there has been no relevant change or
development between the dates as of which the information cited in the preceding
sentence was given and the date of this letter and that the information upon
which we have relied is accurate and does not omit disclosures necessary to
prevent such information from being misleading.
X.X. Xxxxxx Securities Inc.
BT Xxxx. Xxxxx Incorporated
April 12, 1999
Page 8
We confirm that we do not have any actual knowledge which has caused us to
conclude that our reliance and assumptions cited in the two immediately
preceding paragraphs are unwarranted. The term "ACTUAL KNOWLEDGE" whenever it
is used in this letter with respect to our firm means conscious awareness at the
time this letter is delivered on the date it bears by the following Xxxxxxxx &
Xxxxx lawyers, who constitute all of the Xxxxxxxx & Xxxxx lawyers who have
devoted a significant amount of time to the negotiation or preparation of the
Transaction Agreements, the Offering Memorandum and the due diligence associated
therewith (herein called "OUR DESIGNATED TRANSACTION LAWYERS"): Xxxxxxx X.
Xxxxxx, P.C., Xxxxx X. Xxxx, Xxxxx X. Xxxxxxxxxx, Xxxxxxx X. Xxxxxxx and
Xxxxxx X. Xxxxxxx.
Each opinion (an "enforceability opinion") in this letter that any
particular contract is a valid and binding obligation or is enforceable in
accordance with its terms is subject to: (i) the effect of bankruptcy,
insolvency, fraudulent conveyance and other similar laws and judicially
developed doctrines in this area such as substantive consolidation and equitable
subordination; (ii) the enforceability of any indemnification or contribution
provision contained in such contract under applicable securities laws or the
public policies underlying such laws; and (iii) the effect of general principles
of equity. "General principles of equity" include but are not limited to:
principles limiting the availability of specific performance and injunctive
relief; principles which limit the availability of a remedy under certain
circumstances where another remedy has been elected; principles requiring
reasonableness, good faith and fair dealing in the performance and enforcement
of an agreement by the party seeking enforcement; principles which may permit a
party to cure a material failure to perform its obligations under certain
circumstances; and principles affording equitable defenses such as waiver,
laches and estoppel. In addition, we express no opinion with respect to the
enforceability of any provision in any of the Transaction Agreements which
purports to waive the benefit of usury laws. It is possible that terms in a
particular contract covered by our enforceability opinion may not prove
enforceable for reasons other than those explicitly cited in this letter should
an actual enforcement action be brought, but (subject to all the exceptions,
qualifications, exclusions and other limitations contained in this letter) such
unenforceability would not in our opinion prevent the party entitled to enforce
that contract from realizing the principal benefits purported to be provided to
that party by the terms in that contract which are covered by our enforceability
opinion.
The manner in which any particular issue would be treated in any actual
court case would depend in part on facts and circumstances particular to the
case and would also depend on how the court involved chose to exercise the wide
discretionary authority generally available to it. This letter is not intended
to guarantee the outcome of any legal dispute which may arise in the future.
X.X. Xxxxxx Securities Inc.
BT Xxxx. Xxxxx Incorporated
April 12, 1999
Page 9
Our advice on every legal issue addressed in this letter is based
exclusively on the internal laws of New York and Illinois and the federal law of
the United States except that certain of the opinions in paragraphs 1 through 8,
10 through 13, 15 and 18 are based on the Delaware General Corporation Law (in
the case of the Company, DPC, PCA Hydro, PCA Tomahawk and PCA Valdosta) and on
the Virginia Stock Corporation Act (in the case of DCC). With respect to any
opinion or other advice based on the Virginia Stock Corporation Act, we note
that we do not practice in Virginia, and our opinions and advice based on the
Virginia Stock Corporation Act are limited to the statutory provisions set forth
in Xxxxxx'x Code of Virginia 1950 Annotated (1993 Replacement Volume, 1998
Cumulative Supplement) without regard to regulations promulgated thereunder or
any judicial interpretations thereof.
None of the opinions or other advice contained in this letter considers or
covers: (i) any state securities (or "blue sky") laws or regulations; (ii) any
financial statements or supporting schedules (or any notes to any such
statements or schedules) or other financial or statistical information set forth
in (or omitted from) the Offering Memorandum; or (iii) any rules and regulations
of the National Association of Securities Dealers, Inc. relating to the
compensation of underwriters. This letter does not cover any other laws,
statutes, governmental rules or regulations or decisions which in our experience
are not generally applicable to transactions of the kind covered by the Purchase
Agreement or covered by opinions typically delivered in connection with
transactions of the kind covered by the Purchase Agreement.
This letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which our Designated Transaction Lawyers did
not have actual knowledge at the time, by reason of any change subsequent to
that time in any law, other governmental requirement or interpretation thereof
covered by any of our opinions or advice, or for any other reason.
X.X. Xxxxxx Securities Inc.
BT Xxxx. Xxxxx Incorporated
April 12, 1999
Page 10
This letter may be relied upon by the Initial Purchasers only for the
purpose served by the provision in the Purchase Agreement cited in the initial
paragraph of this letter in response to which it has been delivered. Without
our written consent: (i) no person other than the Initial Purchasers may rely
on this letter for any purpose; (ii) this letter may not be cited or quoted in
any financial statement, prospectus, private placement memorandum or other
similar document; (iii) this letter may not be cited or quoted in any other
document or communication which might encourage reliance upon this letter by any
person or for any purposes excluded by the restrictions in this paragraph; and
(iv) copies of this letter may not be furnished to anyone for purposes of
encouraging such reliance; except that the trustee under the Indenture, United
States Trust Company of New York, and the trustee under the Exchange Indenture,
United States Trust Company of Texas, N.A., may rely upon paragraphs 7 through
11 of this letter to the same extent as if each were an addressee hereof.
Sincerely,
Xxxxxxxx & Xxxxx
SCHEDULE A
1. Contribution Agreement
2. Senior Bank Financing
