EXHIBIT 10.9
FINAL
HOLDING COMPANY SUPPORT AGREEMENT
THIS HOLDING COMPANY SUPPORT AGREEMENT (this "Agreement"), dated as
of April 12, 1999, is made by and between PCA Holdings LLC, a Delaware limited
liability company ("Holdings"), and Packaging Corporation of America, a Delaware
corporation (the "Company").
WHEREAS, Holdings, the Company and Tenneco Packaging Inc. ("TPI")
are parties to that certain Contribution Agreement, dated January 25, 1999, as
amended by that letter agreement dated April 12, 1999 among the Company, TPI and
Holdings (the "Contribution Agreement"), pursuant to which Holdings has agreed
to contribute cash and become a stockholder in the Company (the "Holdings
Investment") and TPI has agreed to contribute substantially all of the assets of
its Containerboard Business (as defined in the Contribution Agreement) to the
Company in exchange for outstanding common stock of the Company, in each case
pursuant to the terms and subject to the conditions set forth therein;
WHEREAS, Holdings was organized for the purpose of making the
Holdings Investment and upon consummation of the transactions contemplated in
the Contribution Agreement (the "Closing") and immediately prior to and on the
Closing Holdings will not own any securities and will not be engaged in any
business activities or operations (other than with respect to the Holdings
Investment and in connection with the transactions contemplated by the
Contribution Agreement); and
WHEREAS, the Company desires to reimburse Holdings for certain fees,
costs and expenses incurred, directly or indirectly, by Holdings as a result of
the Holdings Investment.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements hereinafter set forth and the mutual benefits to be
derived herefrom, Holdings and the Company hereby agree as follows:
1. Reimbursement. The Company shall promptly reimburse Holdings for
all fees, costs and expenses as may be incurred or become payable (whether prior
to, upon or following the Closing) by Holdings or its members, affiliates,
officers and employees arising out of, in connection with, or relating to the
Holdings Investment (the "Holdings Investment Expenses"), which shall include,
but not be limited to, Holdings' operating expenses, franchise taxes and other
taxes imposed on Holdings, and expenses of Holdings associated with Holdings'
financial or other reporting obligations.
2. Term. This Agreement shall continue until the consummation of the
complete sale, transfer or other disposition of all of the Holdings Investment
to any Person or group of Persons (other than to Madison Dearborn Capital
Partners III, L.P. ("MDP") or any of its direct or indirect members or any of
its or their affiliates). Except as consented to by Holdings, no termination of
this Agreement whether pursuant to this Section 2 or otherwise, shall affect the
Company's reimbursement obligations hereunder with respect to the fees, costs,
expenses and Losses (as defined below) incurred by Holdings or other Holdings
Parties (as defined below) and not reimbursed by the Company as of the effective
date of such termination.
3. Liability. None of Holdings, any of its affiliates, or any of
their respective direct or indirect officers, directors, managers, members,
partners, equity owners, employees, agents, representatives, successors or
assigns (collectively, "Holdings Parties") shall be liable to the Company, any
of its subsidiaries or affiliates or any of their respective direct or indirect
stockholders, equity owners, employees, agents, representatives, successors or
assigns, for any loss, liability, damage or expense arising out of or in
connection with the any services performed to or for the Company.
4. Indemnification. The Company agrees to defend, indemnify and hold
harmless each of the Holdings Parties from and against, and to reimburse each of
the Holdings Parties for, all out-of-pocket, legal and other costs and expenses
incurred by it in connection with or relating to investigating, preparing to
defend, or defending any actions, claims or other proceedings (including any
investigation or inquiry) arising in any manner out of or in connection with
this Agreement (whether or not such indemnified person is a named party in such
proceeding); provided that, the foregoing notwithstanding, the Company's
obligations under this Section shall be subject to the dollar limitation set
forth below in Section 5.
5. Covenants. Each of Holdings and the Company covenants and agrees
that, except as may otherwise be agreed to in writing in advance by TPI, during
the period from the Closing Date until such time when TPI no longer holds any of
(x) the equity securities of the Company issued to TPI on the Closing Date (as
defined in the Contribution Agreement) or (y) any securities issued with respect
to the securities referred to in the foregoing clause (x) by way of a stock
dividend, stock split or in connection with a recapitalization or subsidiary
merger (the period from the date hereof until such time being herein referred to
as the "TPI Holding Period"):
a. neither the Company, any of its subsidiaries or any of their
respective successors or assigns shall, directly or
indirectly, pay or become obligated to pay (or accrue or
become obligated to accrue for) any fees or other compensation
for services rendered to Holdings, MDP or their respective
members or affiliates, and neither Holdings nor any of its
members will charge or seek payment of any such amounts other
than expense
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reimbursement as contemplated by Section 1 above but subject
to paragraph (b); and
b. the Company's payment obligations under this Agreement shall
be limited to payments pursuant to Section 4 and to Holdings
Investment Expenses (as defined herein as of the date hereof)
and shall not exceed $250,000 in the aggregate per annum.
6. Notices. Any notice, report or payment required or permitted to
be given or made under this Agreement by one party to the other shall be deemed
to have been duly given or made if personally delivered, if mailed by registered
or certified mail, postage prepaid, or if sent by facsimile transmission and the
facsimile transmission is promptly confirmed by telephone confirmation thereof,
to the other party at the following addresses and facsimile numbers (or at such
other address or facsimile number as shall be given in writing by one party to
the other):
If to Holdings:
PCA Holdings LLC
c/o Madison Dearborn Partners, LLC
Three First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
If to the Company:
Packaging Corporation of America
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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7. Entire Agreement; Modification. This Agreement supersedes all
prior and contemporaneous understandings, conditions and agreements, oral or
written, express or implied, concerning the reimbursement of Holdings' expenses
in the manner described herein, but shall not be construed to limit any payments
to which Holdings may be entitled under the Contribution Agreement or any of the
Ancillary Agreements or any other agreement entered into in connection with the
Closing relating to fees and/or expense reimbursement obligations of the Company
to Holdings (so long as the Company's obligations under any such agreement are,
together with the Company's obligations hereunder, subject to the limitations
set forth in Section 5 hereof). This Agreement may not be modified except by an
instrument in writing executed by each of Holdings and the Company and, in the
case of Sections 2, 5 and 7 of this Agreement, during the TPI Holding Period, by
TPI (who, during the TPI Holding Period, is a third party beneficiary of
Sections 2,5 and 7).
8. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach of that provision or any other provision
hereof.
9. Assignment. Neither Holdings nor the Company may assign its
rights or obligations under this Agreement without the express written consent
of the other.
10. Choice of Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Illinois or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Illinois.
* * * * *
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IN WITNESS WHEREOF, Holdings and the Company have executed this
Holding Company Support Agreement as of the date and year first above written.
PCA HOLDINGS LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
PACKAGING CORPORATION OF AMERICA
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
ACKNOWLEDGED AND AGREED BY:
TENNECO PACKAGING INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
