EXHIBIT 4.5
TEKNI-PLEX, INC.
$40,000,000
12 3/4% Senior Subordinated Notes due 2010
Purchase Agreement
May 1, 2002
LEHMAN BROTHERS INC.
745 Seventh Avenue
New York, New York 10019
Ladies and Gentlemen:
Tekni-Plex, Inc., a corporation formed under the laws of Delaware (the
"Company"), proposes to issue and sell (the "Offering") to Lehman Brothers Inc.
(the "Initial Purchaser") $40,000,000 principal amount of its 12 3/4% Senior
Subordinated Notes due 2010 (the "Notes"). The Notes will be issued pursuant to
the provisions of an Indenture dated as of June 21, 2000 (the "Indenture") among
the Company, the Guarantors (as defined) and HSBC Bank USA, as trustee (the
"Trustee"). The Notes will be guaranteed (the "Guarantee" and, collectively with
the Notes, the "Securities") on a senior subordinated basis by each of the
domestic subsidiaries of the Company listed on Schedule A attached hereto (the
"Guarantors").
The sale of the Securities to the Initial Purchaser will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Act" or the "Securities Act"), in reliance upon the exemption
therefrom provided by Section 4(2) of the Act.
Holders of the Securities will have the benefits of a Registration
Rights Agreement to be dated as of May 6, 2002 among the Company, the Guarantors
and the Initial Purchaser, substantially in the form attached hereto as Exhibit
A (the "Registration Rights Agreement") pursuant to which the Issuers will agree
to file with the Securities and Exchange Commission (the "Commission") (i) a
registration statement under the Securities Act (the "Exchange Registration
Statement") registering an issue of senior subordinated notes of the Company
which are identical in all material respects to the Securities (except that the
Exchange Notes will not contain terms with respect to transfer restrictions or
liquidated damages) (such notes, together with any Private Exchange Securities
(as defined in the Registration Rights Agreement), are referred to herein as the
"Exchange Notes") and
(ii) under certain limited circumstances, a shelf registration
statement with respect to the resale of the Securities pursuant to Rule 415
under the Securities Act (the "Shelf Registration Statement"). This Agreement,
the Indenture, the Notes, the Exchange Notes and the Registration Rights
Agreement and the Guarantees are collectively referred to herein as the
"Offering Agreements."
The Company and the Guarantors hereby agree, jointly and severally,
with the Initial Purchaser as follows:
1. The Company agrees to issue and sell the Notes and the Guarantors
agree to issue the Guarantees to the Initial Purchaser as hereinafter provided,
and the Initial Purchaser, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees to
purchase from the Company all of the Securities at a price (the "Purchase
Price") equal to 101.5% of their principal amount. No additional consideration
shall be paid by the Initial Purchaser for the Guarantee.
2. The Company and the Guarantors understand that the Initial Purchaser
intends (x) to offer privately the Securities as soon after this Agreement has
become effective as in the judgment of the Initial Purchaser is advisable and
(y) initially to offer the Securities upon the terms set forth in the Offering
Memorandum (as defined below):
The Company and the Guarantors confirm that they have authorized the
Initial Purchaser, subject to the restrictions set forth below, to distribute
copies of the Offering Memorandum in connection with the offering of the
Securities. The Initial Purchaser hereby makes to the Company and the Guarantors
the following representations and agreements
(i) it is a qualified institutional buyer within the meaning
of Rule 144A under the Act; and
(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 Act) or in any
manner involving a public offering within the meaning of Section 4(2)
of the Act, (B) it will solicit offers for the Securities only from,
and will offer, sell or deliver the Securities only to, (1) persons
whom it reasonably believes to be "qualified institutional buyers"
within the meaning of Rule 144A under the Act to whom notice has been
given that such offer, sale or delivery is being made in reliance on
Rule 144A in transactions under Rule 144A or (2) upon the terms and
conditions set forth in Annex I to this Agreement, and (C) it is not
purchasing with a view to or for offer or sale in connection with any
distribution that would be in violation of federal or state law.
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 Purchaser no later than noon on the Business Day (as defined below)
prior to the Closing Date (as defined below), on May 6, 2002, or at such other
time on the same or such other date, not later than the fifth Business Day
thereafter, as the Initial Purchaser 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 account of the Initial Purchaser
of one or more global notes representing the Securities (collectively, the
"Global Notes"), with any transfer taxes payable in
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connection with the transfer to the Initial Purchaser of the Securities duly
paid by the Company. The Global Notes will be made available for inspection by
the Initial Purchaser at the office of Lehman Brothers Inc. at the address set
forth above, or at such other location as the Company and the Initial Purchaser
agree, not later than 1:00 P.M., New York City time, on the Business Day prior
to the Closing Date.
4. Each of the Company and each Guarantor represents and warrants to
the Initial Purchaser that:
(a) an offering memorandum, dated May 1, 2002 (the "Offering
Memorandum") has been prepared in connection with the offering of the
Securities. Any reference to the Offering Memorandum shall be deemed to
refer to and include (i) any Rule 144A(d)(4) Information (as defined in
Section 5(m)) furnished by the Company prior to the completion of the
distribution of the Securities and (ii) the Company's most recent
Annual Report on Form 10-K and all subsequent documents filed with the
Commission pursuant to Section 13(a), 13(c) or 15(d) of the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act")
on or prior to the date of the Offering Memorandum. Any reference to
the Offering Memorandum, as amended or supplemented, as of any
specified date, shall be deemed to refer to and include (i) any
documents filed with the Commission pursuant to the Exchange Act after
the date of the Offering Memorandum and prior to such specified date.
All documents filed under the Exchange Act and so deemed to be included
in the Offering Memorandum or any amendment or supplement thereto are
hereinafter referred to as the "Incorporated Documents." The Offering
Memorandum and any amendments or supplements thereto did not and will
not, as of their respective dates, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that this --------
representation and warranty does not apply to statements or omissions
made in reliance upon and in conformity with information furnished in
writing by the Initial Purchaser relating to the Initial Purchaser to
the Company expressly for use in the Offering Memorandum or any
amendment or supplement thereto;
(b) the financial statements, and the related notes thereto,
included in the Offering Memorandum present fairly the consolidated
financial position of each of the Company and its consolidated
subsidiaries and of PureTec Corporation and its consolidated
subsidiaries, as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the
periods specified; 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 are
based upon good faith estimates and assumptions believed by the Company
to be reasonable;
(c) since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated therein,
there has not been any material change in the capital stock or
long-term debt of the Company or the Subsidiaries (as defined below),
or any material adverse change, or any development involving a
prospective
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material adverse change, in or affecting the business, condition
(financial or other), results of operations or prospects of the Company
and the Subsidiaries, taken as a whole (a "Material Adverse Change" or
"Prospective Material Adverse Change", respectively), otherwise than as
set forth or contemplated in the Offering Memorandum; and except as set
forth or contemplated in the Offering Memorandum, neither the Company,
nor any of the Subsidiaries, has entered into any transaction or
agreement (whether or not in the ordinary course of business) material
to the Company and the Subsidiaries, taken as a whole;
(d) the Company 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 have
a material adverse effect on the business, condition (financial or
other), results of operations or prospects of the Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect"); the
authorized, issued and outstanding capital stock of the Company, as set
forth in the Offering Memorandum, is owned by the persons and in the
amounts as set forth therein; the shares of issued and outstanding
capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding
shares of capital stock of the Company was issued in violation of any
preemptive or other similar rights;
(e) the Company has no subsidiaries other than those set forth
on Schedule A attached hereto (each a "Subsidiary" and together, the
"Subsidiaries"); each of the Subsidiaries has been duly incorporated
and, unless otherwise indicated on Schedule A, 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 jurisdiction in
which its 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 have a Material Adverse Effect;
and all the outstanding shares of capital stock of the Subsidiaries has
been duly authorized and validly issued, are fully-paid and
non-assessable under the corporate laws of the jurisdiction of
incorporation, and (except as described in the Offering Memorandum)
owned by the Company free and clear of all liens, encumbrances,
security interests and claims;
(f) this Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors and (assuming the due
authorization, execution and delivery by the Initial Purchaser) will
constitute a valid agreement of the Company and the Guarantors and,
subject to (i) the effect of applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other laws
affecting creditors' rights generally, (ii) general principles of
equity and (iii) principles of public policy limiting the rights to
enforce indemnification provisions (clauses (i), (ii) and (ii) being
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referred to herein as the "Creditors' Rights Limitations"), will be
binding and will be enforceable in accordance with its terms; and will
conform, in all material respects, to the description thereof in the
Offering Memorandum;
(g) the Registration Rights Agreement has been duly authorized
by each of the Company and the Guarantors, and when executed and
delivered by them and (assuming the due authorization, execution and
delivery by the Initial Purchaser) will constitute a valid agreement of
the Company and the Guarantors and, subject to the Creditors' Rights
Limitations, will be binding and will be enforceable in accordance with
its terms; and will conform, in all material respects, to the
description thereof in the Offering Memorandum;
(h) the Notes and the Exchange Notes have been duly authorized
by the Company, and when issued and delivered pursuant to this
Agreement (and the Registration Rights Agreement in the case of the
Exchange Notes), will have been duly executed, issued and delivered
and, when the Notes and the Exchange Notes are authenticated by the
Trustee in accordance with the terms of the Indenture (assuming the due
authorization, execution and delivery by the Trustee) and are delivered
to and paid for by the Initial Purchaser in accordance with the terms
of this Agreement (and the Registration Rights Agreement in the case of
the Exchange Notes), will constitute valid obligations of the Company
entitled to the benefits provided by the Indenture and, subject to the
Creditors' Rights Limitations, will be binding and will be enforceable
in accordance with their terms; and the Securities will conform, in all
material respects, to the descriptions thereof in the Offering
Memorandum;
(i) the Guarantees have been duly authorized by the
Guarantors, and when the Notes or Exchange Notes, as the case may be,
are issued and delivered pursuant to this Agreement (and the
Registration Rights Agreement in the case of the Exchange Notes), will
have been duly executed and delivered and, when the Notes or Exchange
Notes, as the case may be, are authenticated by the Trustee in
accordance with the terms of the Indenture (assuming the due
authorization, execution and delivery by the Trustee) and are delivered
to and paid for by the Initial Purchaser in accordance with the terms
of this Agreement (and the Registration Rights Agreement in the case of
the Exchange Notes), will constitute a valid obligation of the
Guarantors and, subject to the Creditors' Rights Limitations, will be
binding and will be enforceable in accordance with its terms;
(j) the Indenture has been duly authorized by the Company and
the Guarantors and, when executed and delivered by each of the Company
and the Guarantors (assuming the due authorization, execution and
delivery by the Trustee), the Indenture will constitute a valid
instrument of the Company and each such Guarantor and, subject to the
Creditors' Rights Limitations, will be binding and will be enforceable
in accordance with its terms; and the Indenture will conform, in all
material respects, to the descriptions thereof in the Offering
Memorandum;
(k) 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 Exchange Act, or any regulation promulgated
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thereunder, including, without limitation, Regulations T, U, and X of
the Board of Governors of the Federal Reserve System;
(l) neither the Company nor any Subsidiary 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
similar organizational documents) or any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a
party or by which it or any of its properties is bound, except for
violations and defaults which individually and in the aggregate would
not have a Material Adverse Effect or are not material to the holders
of the Securities as such; the issue and sale of the Securities and the
performance by each of the Company and the Guarantors of all of the
provisions of their obligations under the Offering Agreements and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any Guarantor is a party or by which the Company or any
Guarantor is bound or to which any of the property or assets of the
Company or any Guarantor is subject, except such as would not have a
Material Adverse Effect, nor will any such action result in any
violation of the provisions of the Certificate of Incorporation or
By-Laws of the Company or any Guarantor or (assuming the accuracy of
the representations by, and compliance with the agreements of, the
Initial Purchaser set forth in paragraph 2 of this Agreement) any
applicable law or statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company,
any Guarantor or any of their respective properties; 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
Company or any Guarantor of the transactions contemplated by the
Offering Agreements, except such consents, approvals, authorizations,
registrations or qualifications as may be required under any state
securities or Blue Sky Laws in connection with the purchase and
distribution of the Securities by the Initial Purchaser and except as
such as would not have a Material Adverse Effect;
(m) other than as set forth or contemplated in the Offering
Memorandum, there are no legal or governmental investigations, actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any of
their respective properties or to which the Company or any Subsidiary
is or may be a party or to which any property of the Company or any
Subsidiary is or may be the subject which could individually or in the
aggregate have, or reasonably be expected to have, a Material Adverse
Effect and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others;
(n) neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Act ("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 (as
defined in the Act) which is or will be integrated with the sale of the
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Securities in a manner that would require the registration under the
Act of the offering contemplated by the Offering Memorandum;
(o) neither the Company, the Guarantors nor any person (other
than the Initial Purchaser, as to which the Company makes no
representation) acting on their behalf has offered or sold the
Securities by means of any general solicitation or general advertising
within the meaning of Rule 502(c) under the Act or, with respect to
Securities sold outside the United States to non-U.S. persons (as
defined in Rule 902 under the Act), by means of any directed selling
efforts within the meaning of Rule 902 under the Act and the Company,
the Guarantors and any of their affiliates and any person (other than
the Initial Purchaser) acting on their behalf has complied with and
will implement the "offering restriction" within the meaning of such
Rule 902;
(p) neither the Company nor any of the Guarantors is, or will
be after giving effect to the offering and sale of the Securities to be
sold and the application of the proceeds from such sale (as described
in the Offering Memorandum under the caption "Use of Proceeds"), an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended;
(q) assuming that the representations of the Initial Purchaser
set forth in paragraph 2 of this Agreement are true, correct and
complete and assuming compliance by the Initial Purchaser with its
agreements in paragraph 2 of this Agreement, it is not necessary in
connection with the offer, sale and delivery of the Securities in the
manner contemplated by this Agreement to register the Securities under
the Act or to qualify an indenture under the Trust Indenture Act of
1939, as amended (the "TIA");
(r) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Act;
(s) BDO Seidman, LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act;
(t) the Company and the Subsidiaries have good and marketable
title in fee simple to all material items of real property and good and
marketable title to all material personal property owned by them, in
each case free and clear of all liens, encumbrances and defects except
such as are otherwise described or referred to in the Offering
Memorandum or such as do not interfere with the use made or proposed to
be made of such property by the Company and the Subsidiaries; and any
real property and buildings held under lease by the Company or the
Subsidiaries are held by them under valid, existing and enforceable
leases (subject to the Creditors' Rights Limitations) with such
exceptions as are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company or
the Subsidiaries. The Company and the Subsidiaries own or possess, or
have no reason to believe they cannot acquire on reasonable terms,
adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights and know-how necessary to
conduct the businesses now or proposed to be operated by them as
described in the Offering Memorandum, except where the failure to own,
possess or have the ability to acquire any such licenses or other
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rights could not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect, and neither the Company nor
any Subsidiary has received any written or, to the best knowledge of
the Company, oral notice of infringement of or conflict with asserted
rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, would have a Material Adverse
Effect;
(u) the Company and the Subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be
filed and have paid all taxes shown thereon and all assessments
received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith except in any case
where the failure to file or pay would not individually or in the
aggregate have a Material Adverse Effect, and, except as disclosed in
the Offering Memorandum, the Company has no knowledge of any material
tax deficiency which has been or might reasonably be expected to be
asserted or threatened against the Company;
(v) each of the Company and each Subsidiary owns, possesses or
has obtained all material 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, except to the extent that the failure to so obtain
or file, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, and neither the Company nor
any Subsidiary has received any actual notice, or is not aware, 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 each of the Company
and each Subsidiary is in compliance with all laws and regulations
relating to the conduct of its business as of the date hereof;
(w) there are no existing or, to the best knowledge of the
Company, threatened labor disputes with the employees of the Company
and the Subsidiaries which are likely to have a Material Adverse
Effect;
(x) each of the Company and each Subsidiary (i) is in
compliance with any and all applicable 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) has received all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and (iii) is in compliance
or is in the process of complying with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with
8
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties) would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect;
(y) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is maintained, administered or contributed to by the
Company or any affiliates of the Company for employees or former
employees of the Company and its affiliates has been maintained, in all
material respects, in compliance with its terms and the requirements of
any applicable statutes, orders, rules and regulations, including but
not limited to ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"); no prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code has occurred with respect to
any such plan excluding transactions effected pursuant to a statutory
or administrative exemption and excluding transactions which would not
have a Material Adverse Effect; and for each such plan which is subject
to the funding rules of Section 412 of the Code or Section 302 of ERISA
no "accumulated funding deficiency" as defined in Section 412 of the
Code has been incurred, whether or not waived, and the fair market
value of the assets of each such plan which is subject to Title IV of
ERISA (excluding for these purposes accrued but unpaid contributions)
exceeded the present value of all benefits accrued under such plan as
determined using reasonable actuarial assumptions; and
(z) The Incorporated Documents, when they were or are filed
with the Commission, conformed or will conform in all material respects
to the applicable requirements of the Exchange Act and the applicable
rules and regulations of the Commission thereunder.
5. Each of the Company and each Guarantor covenants and agrees with the
Initial Purchaser as follows:
(a) before distributing any amendment or supplement to the
Offering Memorandum, to furnish to the Initial Purchaser a copy of the
proposed amendment or supplement for review and not to distribute any
such proposed amendment or supplement to which the Initial Purchaser
reasonably objects;
(b) if, at any time prior to the completion of the initial
placement of the Securities, any event shall occur as a result of which
it is necessary to amend or supplement the Offering Memorandum in order
that the Offering Memorandum does not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances when the
Offering Memorandum is delivered to a purchaser, not misleading, or if
it is necessary to amend or supplement the Offering Memorandum to
comply with law, forthwith to prepare and furnish, at the expense of
the Company, to the Initial Purchaser and to the dealers (whose names
and addresses the Initial Purchaser will furnish to the Company) to
which Securities may have been sold by the Initial Purchaser on behalf
of the Initial Purchaser and to any other dealers upon request, such
amendments or supplements to the Offering Memorandum as may be
necessary so that the Offering Memorandum as so amended or
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supplemented will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances when the Offering Memorandum
is delivered to a purchaser, not misleading or so that the Offering
Memorandum will comply with law;
(c) to cooperate with you and your counsel in connection with
the registration or qualification of the Securities for offering and
sale by the Initial Purchaser and by dealers under the securities or
Blue Sky laws of such jurisdictions as you may designate and will file
such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification;
provided that in no event shall the Company or the Guarantors be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to
taxation or service of process in suits, other than those arising out
of the Offering or sale of the Securities, in any jurisdiction where it
is not now so subject;
(d) so long as the Securities are outstanding, to furnish to
the Initial Purchaser copies of all reports or other communications
(financial or other) furnished to holders of Securities, and copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange;
(e) during the period beginning on the date hereof and
continuing to and including the Business Day following the Closing
Date, not to offer, sell, contract to sell, or otherwise dispose of any
debt securities of or guaranteed by the Company or the Guarantors which
are substantially similar to the Securities;
(f) to use the net proceeds received by the Company from the
sale of the Securities pursuant to this Agreement in the manner
specified in the Offering Memorandum under the caption "Use of
Proceeds" ;
(g) if requested by you, to use its best efforts to cause such
Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealer, Inc.;
(h) to furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders'
equity and cash flows of the Company and the Subsidiaries certified by
independent public accountants) and, as soon as practicable after the
end of each of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the date of the Offering
Memorandum), consolidated summary financial information of the Company
and the Subsidiaries of such quarter in reasonable detail;
(i) during the period of two years after the Closing Date, not
to, and to use its best efforts not to permit any of its "affiliates"
(as defined in Rule 144 under the Act) to, resell any of the Securities
which constitute "restricted securities" under Rule 144 that have been
reacquired by any of them;
(j) whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated and in
addition to any obligations they
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may have under any other agreements with you and/or your affiliates, to
pay or cause to be paid all costs and expenses incident to the
performance of their obligations hereunder, including without limiting
the generality of the foregoing, all costs and expenses (i) incident to
the preparation, issuance, execution, authentication and delivery of
the Securities, including any expenses of the Trustee, (ii) incident to
the preparation, printing and distribution of the Offering Memorandum
and any preliminary offering 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 Purchaser may designate (including fees of
counsel for the Initial Purchaser and their disbursements), (iv) in
connection with the application for eligibility for trading of the
Securities in the PORTAL trading system, (v) in connection with the
printing (including word processing and duplication costs) and delivery
of this Agreement, the Indenture, the Registration Rights Agreement,
the Blue Sky Memoranda and any Legal Investment Survey and the
furnishing to the Initial Purchaser and dealers of copies of the
Offering Memorandum, including mailing and shipping, as herein
provided, (vi) payable to rating agencies in connection with the rating
of the Securities, and (vii) incurred by the Company in connection with
a "road show" presentation to potential investors;
(k) to take all reasonable action that is appropriate or
necessary to assure that its offerings of other securities will not be
integrated for purposes of the Act with the offerings contemplated
hereby;
(l) not to solicit any offer to buy or offer to sell
Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D under the
Act;
(m) while the Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Act, during any period in which it is not subject to Section 13 or
15(d) under the Exchange Act, to make available to the Initial
Purchaser and any holder of Securities in connection with any sale
thereof and any prospective purchaser of Securities, in each case upon
request, the information specified in, and meeting the requirements of,
Rule 144A(d)(4) ("Rule 144A(d)(4) Information") under the Act (or any
successor thereto); and
(n) not to take any action prohibited by Regulation M under
the Exchange Act (or any successor provision), in connection with the
distribution of the Securities contemplated hereby.
6. The obligations of the Initial Purchaser hereunder to purchase the
Securities on the Closing Date are subject to the performance, in all material
respects, by each of the Company and the Guarantors of their obligations
hereunder and to the following additional conditions:
(a) the representations and warranties of each of the Company
and the Guarantors contained herein are true and correct on and as of
the Closing Date as if made on and as of the Closing Date and each of
the Company and the Guarantors shall have
11
complied, in all material respects, with all agreements and all
conditions on its 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, nor shall any notice have been given of (i) any
downgrading, (ii) any intended or potential downgrading or (iii) any
review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization", as such term
is defined for purposes of Rule 436(g)(2) under the Act;
(c) since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated therein,
there shall not have been any material change in the capital stock or
long-term debt of any of the Company or the Guarantors or any Material
Adverse Change, or any development involving a Prospective Material
Adverse Change, otherwise than as set forth or contemplated in the
Offering Memorandum, the effect of which in the judgment of the Initial
Purchaser makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities on the Closing Date on the
terms and in the manner contemplated in the Offering Memorandum; and
neither the Company nor the Subsidiaries has sustained since the date
of the latest audited financial statements included in the Offering
Memorandum any loss or interference with its respective business from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or legal or
governmental proceeding, which loss or interference, in the judgment of
the Initial Purchaser, has had or has a Material Adverse Effect,
otherwise than as set forth or contemplated in the Offering Memorandum;
(d) the Initial Purchaser shall have received on and as of the
Closing Date a certificate of the Company signed for the Company by an
executive officer of the Company with specific knowledge about the
Company's and Guarantors' financial matters, satisfactory to the
Initial Purchaser to the effect set forth in subsections (a) and (b) of
this Section and to the further effect that there has not occurred any
Material Adverse Change, or any development involving a Prospective
Material Adverse Change, from those set forth or contemplated in the
Offering Memorandum;
(e) Davis Polk & Wardwell, Counsel for the Company, shall have
furnished to the Initial Purchaser their written opinion, dated the
Closing Date in form and substance satisfactory to the Initial
Purchaser, to the effect that:
(i) the Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of Delaware with the corporate power and authority to own
its properties and conduct its business as described in the
Offering Memorandum;
(ii) each Guarantor organized under the laws of the
State of Delaware or New York is a corporation validly
existing under the laws of its jurisdiction of incorporation
with power and authority to enter into the Offering
Agreements;
12
(iii) to such counsel's knowledge, other than as set
forth or contemplated in the Offering Memorandum, there are no
legal or governmental investigations, actions, suits or
proceedings (i) pending or threatened against or affecting the
Company or the Subsidiaries or any of their respective
properties or to which the Company or any Subsidiary is or may
be a party or to which any property of the Company or any
Subsidiary is or may be the subject which, if determined
adversely to the Company or such Subsidiary, could
individually or in the aggregate have, or reasonably be
expected to have, a Material Adverse Effect or (ii) which seek
to restrain, enjoin, prevent the consummation of or otherwise
challenge the issuance or sale of the Securities in the manner
contemplated by the Offering Memorandum or the consummation of
the Offering or the Transactions; to such counsel's knowledge,
no such proceedings are threatened by governmental authorities
or by others;
(iv) this Agreement has been duly authorized,
executed and delivered by each of the Company and each
Guarantor organized under the laws of the State of Delaware or
New York;
(v) the Registration Rights Agreement has been duly
authorized, executed and delivered by each of the Company and
each Guarantor organized under the laws of the State of
Delaware or New York and is a valid agreement of each of the
Company and each such Guarantor and, subject to the Creditors'
Rights Limitations, is binding and is enforceable in
accordance with its terms;
(vi) the Guarantee has been duly authorized, executed
and delivered by each Guarantor organized under the laws of
the State of Delaware or New York and, and upon delivery to
and payment for the Notes by the Initial Purchaser in
accordance with the terms of this Agreement, will constitute a
valid obligation of each such Guarantor and, subject to the
Creditors' Rights Limitations, is binding and is enforceable
against each such Guarantor in accordance with its terms;
(vii) the Notes have been duly authorized, executed
and delivered by the Company and, when duly authenticated in
accordance with the terms of the Indenture and delivered to
and paid for by the Initial Purchaser in accordance with the
terms of this Agreement, will constitute valid obligations of
the Company entitled to the benefits provided by the Indenture
and, subject to the Creditors' Rights Limitations, are binding
and are enforceable against the Company in accordance with
their terms;
(viii) the Indenture has been duly authorized,
executed and delivered by the Company and each Guarantor
organized under the laws of the State of Delaware or New York
and (assuming the due authorization, execution and delivery by
the Trustee) constitutes a valid agreement of the Company and
each such Guarantor and, subject to the Creditors' Rights
Limitations, is binding and is enforceable against the Company
and each such Guarantor, respectively, in accordance with its
terms;
13
(ix) other than the subject matter of subparagraphs
(xi) and (xv), the issue and sale of the Securities and the
performance by the Company and the Guarantors of their
obligations under the Securities, the execution and delivery
of the Offering Agreements and the consummation by the Company
and the Guarantors of the transactions contemplated hereby and
thereby will not conflict with or constitute or result in a
breach or a default under or violation of any of (i) the terms
or provisions of any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument known to
such counsel to which the Company or such Guarantor is a party
or by which they or any of their properties is known by such
counsel to be bound except as such as would not have a
Material Adverse Effect, (ii) the Certificate of Incorporation
or By-Laws of the Company or such Guarantor, or (iii) any
applicable federal or New York statute or, to the best of such
counsel's knowledge, any federal or New York order, rule or
regulation of any federal or New York governmental agency or
body having jurisdiction over the Company, the Guarantors or
any of their respective properties or any judgment, decree or
order of any court to which the Company or such Guarantor is a
named party;
(x) other than the subject matter of paragraph (xi),
to their knowledge, no consent, approval, authorization,
order, license, registration or qualification of or with any
court or governmental agency or body is required for the issue
and sale of the Securities or the consummation of the other
transactions contemplated by this Agreement or the Indenture,
except as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Securities or the Exchange Notes or the federal securities
laws with respect to the Exchange Notes;
(xi) no registration under the Act of the Securities
is required in connection with the sale of the Securities to
the Initial Purchaser as contemplated by this Agreement and
the Offering Memorandum or in connection with the initial
resale of the Securities by the Initial Purchaser in
accordance with Section 2 (including Annex I) of this
Agreement, and prior to the commencement of the Exchange Offer
or the effectiveness of the Shelf Registration Statement, the
Indenture is not required to be qualified under the TIA, in
each case assuming (i) that the purchasers who buy the
Securities in the initial resales are qualified institutional
buyers (as defined in Rule 144A under the Act) or non-U.S.
Persons (as defined in Rule 902 under the Act) and (ii) the
accuracy of the Initial Purchaser's representations and those
of the Company and the Guarantors contained in this Agreement
regarding the absence of a general solicitation in connection
with the sale of the Securities to the Initial Purchaser and
the initial resales thereof (it being understood that such
counsel need express no opinion as to any subsequent resale of
any Notes);
(xii) the Securities satisfy the requirements set
forth in Rule 144A(d)(3) under the Act;
14
(xiii) the statements in the Offering Memorandum
under "Description of Notes," insofar as such statements
constitute a description of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents or proceedings;
(xiv) on the basis stated below, no facts have come
to the attention of such counsel that lead such counsel to
believe, except for the financial statements, related
financial statement schedules, and other financial information
contained in the Offering Memorandum as to which such counsel
expresses no belief, that the Offering Memorandum, as of its
date of issuance and, as amended or supplemented, if
applicable, as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and
(xv) the Company is not and, after giving effect to
the offering and sale of the Securities to be sold and the
application of the proceeds from such sale (as described in
the Offering Memorandum under the caption "Use of Proceeds")
will not be, an "investment company" as defined in the
Investment Company Act of 1940, as amended.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the federal laws
of the United States, the corporate law of the State of Delaware and
the laws of the State of New York, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (reasonably satisfactory to the Initial Purchaser's
counsel) of other counsel, reasonably acceptable to the Initial
Purchaser's counsel, familiar with the applicable laws; and (B) as to
matters of fact, to the extent such counsel deems proper, on the
representations and warranties made by the Company and the Guarantors
herein, and certificates and statements of public officials and
officers and other representatives of the Company and the Guarantors
(and such counsel has not independently verified or investigated, nor
does such counsel assume any responsibility for, the factual accuracy
or completeness of such representations and warranties or certificates
or of such factual statements). The opinion of such counsel for the
Company shall state that the opinion of any such other counsel upon
which they relied is in form satisfactory to such counsel and, in such
counsel's opinion, the Initial Purchaser and they are justified in
relying thereon. With respect to the matters to be covered in
subparagraph (xiv) above counsel may state that their opinion and
belief is based upon their participation in the preparation of the
Offering Memorandum and any amendment or supplement thereto, and that
since such counsel has not conducted any independent investigation with
regard to the information set forth in the Offering Memorandum and any
amendment or supplement thereto, such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained therein except with respect to the
opinions set forth in subparagraph (xiii) above.
The opinion of Davis Polk & Wardwell described above shall be
rendered to the Initial Purchaser at the request of the Company and
shall so state therein.
15
(f) the Company shall have furnished to the Initial Purchaser
a solvency certificate dated the Closing Date in form and substance
satisfactory to the Initial Purchaser;
(g) on the date of the issuance of the Offering Memorandum and
also on the Closing Date, BDO Seidman, LLP shall have furnished to the
Initial Purchaser letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, 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 Offering Agreements shall have been executed and
delivered by the Company and the Guarantors to the extent that each is
a party thereto, the Registration Rights Agreement being substantially
in the form attached hereto as Annex II;
(i) the Initial Purchaser shall have received on and as of the
Closing Date an opinion of Latham & Watkins, counsel to the Initial
Purchaser, with respect to the validity of the Indenture and the
Securities, and such other related matters as the Initial Purchaser may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters; and
(j) on or prior to the Closing Date, the Company shall have
furnished to the Initial Purchaser such further certificates and
documents as the Initial Purchaser shall reasonably request.
7. Indemnification and Contribution
(a) Each of the Company and each Guarantor, jointly and
severally, shall indemnify and hold harmless the Initial Purchaser, its
directors, officers and employees and each person, if any, who controls
the Initial Purchaser within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of
Securities), to which the Initial Purchaser, director, officer,
employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in the
Offering Memorandum or in any amendment or supplement thereto or (B) in
any materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the
offering of the Securities, including any roadshow or investor
presentations made to investors by the Company (whether in person or
electronically) (the "Marketing Materials") or (ii) the omission or
alleged omission to state in the Offering Memorandum, or in any
amendment or supplement thereto, or in any Marketing Materials, any
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company
and the Guarantors shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of,
or is based upon,
16
any untrue statement or alleged untrue statement or omission or alleged
omission made in the Offering Memorandum, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning the Initial Purchaser furnished to the Company by the
Initial Purchaser specifically for inclusion therein which information
consists solely of the information specified in Section 7(e). The
foregoing indemnity agreement is in addition to any liability which the
Company and the Guarantors may otherwise have to the Initial Purchaser
or to any director, officer, employee or controlling person of the
Initial Purchaser.
(b) The Initial Purchaser shall indemnify and hold harmless
each of the Company, the Guarantors, their respective officers and
employees and directors, and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Offering
Memorandum or in any amendment or supplement thereto, or (ii) the
omission or alleged omission to state in the Offering Memorandum, or in
any amendment or supplement thereto, any material fact required to be
stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
concerning the Initial Purchaser furnished to the Company by the
Initial Purchaser specifically for inclusion therein, which information
is limited to the information set forth in Section 7(e), and shall
reimburse the Company and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition
to any liability which the Initial Purchaser may otherwise have to the
Company or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced
by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the
17
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that the Initial Purchaser shall have the right to employ
counsel to represent jointly the Initial Purchaser and its respective
officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be
sought by the Initial Purchaser against the Company under this Section
7 if, in the reasonable judgment of the Initial Purchaser, it is
advisable for the Initial Purchaser, its directors, officers, employees
and controlling persons to be jointly represented by separate counsel,
and in that event the fees and expenses of such separate counsel shall
be paid by the Company. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall
not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of
such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with
the consent of the indemnifying party or if there be a final judgment
of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 7(a) or 7(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the
Company and the Guarantors on the one hand and the Initial Purchaser on
the other 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 Company and the Guarantors on the one hand and the Initial
Purchaser on the other with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Guarantors on the one hand and the Initial Purchaser on the other with
respect to such offering shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Securities purchased
under this Agreement (before deducting expenses) received by the
Company and the Guarantors, on the one hand, and the total underwriting
discounts and commissions received by the Initial Purchaser with
respect to the Securities purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the
Securities under this Agreement. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company and the
18
Guarantors or the Initial Purchaser, the intent of the parties and
their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, each of the
Guarantors and the Initial Purchaser agree that it would not be just
and equitable if contributions pursuant to this Section were to be
determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include,
for purposes of this Section 7(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) The Initial Purchaser confirms and the Company and each of
the Guarantors, acknowledges that the stabilization legend on page iii
and the information set forth in the 1st through the 7th and the 10th
paragraphs under the caption "Plan of Distribution" in the Offering
Memorandum constitute the only information concerning the Initial
Purchaser furnished in writing to the Company by or on behalf of the
Initial Purchaser specifically for inclusion in the Offering
Memorandum.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Initial Purchaser, by notice given
to the Company, if after the execution and delivery of this Agreement (i)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange, the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or in the over-the-counter market, or trading of any securities of or
guaranteed by the Company on any exchange or in the over-the-counter market,
shall have been suspended or the settlement of such trading generally shall have
been materially disrupted or minimum prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by either Federal or state authorities or
(iii) there shall have occurred (A) such a material adverse change in general
economic, political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be such),
including, without limitation, as a result of terrorist activities, (B) an
engagement of the United States in hostilities, (C) an escalation in hostilities
involving the United States, (D) a declaration of a national emergency or war by
the United States or (E) any calamity or crisis, after the date hereof, as to
make it, in the judgment of the Initial Purchaser, impracticable or inadvisable
to market the Securities on the terms and in the manner contemplated in the
Offering Memorandum.
9. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
10. If this Agreement shall be terminated by the Initial Purchaser,
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 any of the Issuers shall be unable to perform its obligations under
this Agreement or any condition of the Initial Purchaser's obligations
19
cannot be fulfilled other than solely by reason of a default by the Initial
Purchaser in payment for the Securities on the Closing Date, the Company agrees
to reimburse the Initial Purchaser for all out-of-pocket expenses (including the
fees and expenses of its counsel) reasonably incurred by the 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 Company, the Initial Purchaser, any controlling persons referred to herein
and their respective successors and assigns. Nothing 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 the Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
12. 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 Purchaser shall be
given to them at the following address: Lehman Brothers Inc., 101 Hudson Street,
Jersey City, New Jersey 07302; Attention: Syndicate Department, (Fax: (201)
524-5980). Notices to the Company shall be given to them at the following
address: Tekni-Plex, Inc., 201 Industrial Parkway, Somerville, New Jersey 08876;
Attention: Dr. F. Patrick Smith; with a copy to Davis Polk & Wardwell, 450
Lexington Avenue, New York, NY 10017; Attention: Winthrop Conrad, Esq.
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. Pursuant to Section 5-1401 of the General Obligations Laws of the
State of New York, this Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
other conflicts of laws provisions.
20
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
TEKNI-PLEX, INC.
By: /s/ JAMES E. CONDON
-----------------------------------
Name: James E. Condon
Title: Chief Financial Officer
Accepted: May 1, 2002
LEHMAN BROTHERS INC.
By: /s/ MICHAEL KONIGSBERG
-----------------------------------
Name: Michael Konigsberg
Title: Managing Director
Each of the undersigned by its execution hereof agrees to become a
party to this Agreement as a Guarantor as of the date set forth above:
PURETEC CORPORATION
PLASTIC SPECIALTIES AND TECHNOLOGIES,
INC.
PLASTIC SPECIALTIES AND TECHNOLOGIES
INVESTMENTS, INC.
BURLINGTON RESINS, INC.
DISTRIBUTORS RECYCLING, INC.
REI DISTRIBUTORS, INC.
ALUMET SMELTING CORP
NATVAR HOLDINGS, INC
TRI-SEAL HOLDINGS, INC
PURE TECH RECYCLING OF CALIFORNIA
COAST RECYCLING NORTH, INC.
PURE TECH APR, INC.
TPI ACQUISITION SUBSIDIARY, INC.
collectively, the Guarantors
By: /s/ F. PATRICK SMITH
------------------------------------
Name: F. Patrick Smith
Title: Chief Executive Officer
ANNEX I
(A) In addition to offers pursuant to clause (B)(1) of paragraph 2(ii)
of the Agreement, the Initial Purchaser intends to offer and sell the Securities
in accordance with Regulation S under the Act. Accordingly, the Initial
Purchaser agrees that neither it, its affiliates nor any persons acting on its
or their behalf has engaged or will engage in any directed selling efforts
within the meaning of Rule 902 under the Act with respect to the Securities and
it and they have complied and will comply with the offering restrictions
requirement of Regulation S. The Initial Purchaser agrees that, at or prior to
confirmation of sale of Securities (other than a sale pursuant to and in
accordance with paragraph 2(ii) of the Agreement to purchasers described in
clause (B)(1) thereof), it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the United States Securities Act of 1933, as amended (the "Act"), and
may not be offered, sold or delivered within the United States or to,
or for the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and the closing date, except
in either case in accordance with Regulation S (or Rule 144A if
available) under the Act. Terms used above have the meaning given to
them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
The Initial Purchaser agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Securities in accordance with this paragraph (A), except with its affiliates
or with the prior written consent of the Company.
(B) The Initial Purchaser represents and agrees that (i) it has not
offered or sold, and prior to the date six months after the Closing Date will
not offer or sell any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, (ii) it has complied, and will
comply, with all applicable provisions of the Financial Services Act 1986 with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on, and will only issue or pass on, in the United Kingdom, any document received
by it in connection with the issuance of the Securities to a person who -is of a
kind described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
A-I-1
(C) The Initial Purchaser agrees that it will not directly or
indirectly offer, sell or deliver any of the Securities or distribute any
offering memorandum, prospectus or other document or information in any
jurisdiction outside the United States except under circumstances that will
result in compliance with the applicable laws thereof, and that it will take at
its own expense whatever action is required to permit its purchase and resale of
the Securities in such jurisdictions. The Initial Purchaser understands that no
action has been taken by the Company to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purposes. The Initial Purchaser agrees not to cause any advertisement of the
Securities to be published in any newspaper or periodical or posted in any
public place and not to issue any circular relating to the Securities in any
jurisdiction outside of the United States. Without prejudice to the generality
of the foregoing, the Initial Purchaser is not authorized to give any
information or to make any representation in connection with the offering or
sale of the Securities other than those contained in the Offering Memorandum.
A-I-2
ANNEX II
[Form of Registration Rights Agreement]
A-II-1
SCHEDULE A
DOMESTIC SUBSIDIARIES
PureTec Corporation (Delaware)
Plastic Specialties and Technologies. Inc. (Delaware)
Plastic Specialties and Technologies Investments, Inc. (Delaware)
Burlington Resins, Inc. (Delaware)
Distributors Recycling, Inc. (New Jersey)
REI Distributors Inc. (New Jersey)*
Alumet Smelting Corporation (New Jersey)
Natvar Holdings, Inc. (Delaware)
Tri-Seal Holdings, Inc. (Delaware)
Pure Tech Recycling of California (California)*
Coast Recycling North, Inc. (California)*
Pure Tech APR, Inc. (New York)
TPI Acquisition Subsidiary, Inc. (Delaware)
FOREIGN SUBSIDIARIES
PurePlast Acquisition Limited (Nova Scotia)
PurePlast Inc. (Ontario)
Tekni-Plex Europe, N.V. (Belgium)
Action Technology Italia S.p.A (Italy)
Colorite Europe, Ltd. (Northern Ireland)
Colorite Plastics Canada Ltd. (Ontario)
Tekni-Plex Holdings (Canada) Ltd. (Nova Scotia)
Tekni-Plex Argentina, S.A. (Argentina)
Tekni-Plex, Inc. (Singapore)
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* Not currently in good standing.
S-A-1