EXHIBIT 4.3
RADNOR HOLDINGS CORPORATION
$100,000,000 AGGREGATE PRINCIPAL
AMOUNT OF 10% SENIOR
NOTES DUE 2003
PURCHASE AGREEMENT
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December 2, 1996
ALEX. XXXXX & SONS INCORPORATED
NATWEST CAPITAL MARKETS LIMITED
c/o Alex. Xxxxx & Sons Incorporated
1290 Avenue of the Americas
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Radnor Holdings Corporation, a Delaware corporation (the "Company"),
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proposes, subject to the terms and conditions stated herein, to issue and sell
to Alex. Xxxxx & Sons Incorporated and NatWest Capital Markets Limited
(together, the "Initial Purchasers") $100,000,000 aggregate principal amount of
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10% Senior Notes due 2003 (the "Notes"). The companies listed on Schedule 2
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hereto (collectively, the "Guarantors" and, together with the Company, the
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"Issuers") propose to fully and unconditionally guarantee, on an unsecured
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senior basis, the obligations of the Company under the Notes (the "Guarantees"
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and, together with the Notes, the "Securities"). The Securities will be issued
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pursuant to the provisions of an Indenture to be dated as of December 5, 1996
(the "Indenture") among the Issuers and First Union National Bank, as trustee
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(the "Trustee"). Unless otherwise defined in this Agreement, capitalized terms
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have the meanings specified or referred to in the Final Offering Memorandum
referred to below.
The Company has entered into a Stock Purchase Agreement dated October
30, 1996 (the "Stock Purchase Agreement") with the holders (the "Sellers") of
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all of the outstanding capital stock of and other equity interests in SP
Acquisition Co. (together with its subsidiaries, "StyroChem"), with respect to
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the
acquisition by the Company (the "StyroChem Acquisition") of all the outstanding
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shares of common and preferred capital stock and all options and warrants to
purchase the common and preferred capital stock of SP Acquisition Co. and
certain related matters. Concurrently with the consummation of the offering of
the Securities, the Company will enter into an amended and restated credit
agreement (the "Amended Credit Agreement") with The Bank of New York Commercial
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Corporation, as agent and a lender, and the other lenders party thereto
(collectively, the "U.S. Banks"). Concurrently with the consummation of the
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StyroChem Acquisition, (i) the Company will issue and sell the Notes, (ii)
certain Guarantors will enter into a guaranty with the Banks and other related
agreements specified in the Amended Credit Agreement, (iii) the Company will
borrow certain amounts under the Amended Credit Agreement and (iv) the Company
will enter into an amendment with respect to, and will borrow certain amounts
under, the bank loan agreement with the Bank of Montreal (together with the U.S.
Banks, the "Banks"), dated February 25, 1994 (as amended, the "Canadian Credit
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Agreement" and, together with the Amended Credit Agreement, the "Credit
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Agreements"). The borrowings under the Credit Agreements are referred to
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collectively as the "Other Financings." The net proceeds of the sale of the
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Securities will be used, together with the net proceeds of the Other Financings,
to fund a portion of the cash purchase price and related fees and expenses in
connection with the StyroChem Acquisition, to repay certain outstanding
indebtedness of WinCup Holdings, L.P. (the "Joint Venture"), to fund the
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acquisition of the interest in the Joint Venture not currently held by WinCup
Holdings, Inc. ("WinCup"), including the repayment of outstanding indebtedness
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of the Joint Venture (the "J.R. Cup Acquisition" and together with the StyroChem
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Acquisition, the "Acquisitions"), to redeem certain shares of the Company's
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preferred stock and certain outstanding equity warrants held by a third party
and for general corporate purposes. The term "Company" as used herein means the
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Company after the consummation of the Acquisitions, unless the context otherwise
requires. The Stock Purchase Agreement (including without limitation the non-
competition agreement and consulting agreement executed in connection
therewith), the Credit Agreements and the agreements entered into in connection
with the J.R. Cup Acquisition are referred to collectively as the "Other
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Transaction Documents."
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The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
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exemptions therefrom provided by Section 4(2) of the Securities Act and Rule
144A promulgated thereunder.
In connection with the sale of the Securities, the Company has
prepared and delivered to each Initial Purchaser a preliminary offering
memorandum dated November 12, 1996 (as amended or supplemented, the "Preliminary
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Offering Memorandum") and will prepare and deliver to each Initial Purchaser on
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the
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date hereof or the next succeeding business day a final offering memorandum
dated December 2, 1996 (as amended or supplemented, the "Final Offering
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Memorandum" and, together with the Preliminary Offering Memorandum, each a
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"Memorandum") setting forth or including a description of the Securities, the
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terms of the offering of the Securities, a description of the StyroChem
Acquisition, a description of the Company and any material developments relating
to any of them occurring after the date of the most recent financial statements
included therein.
You and your direct and indirect transferees will be entitled to the
benefits of an Exchange and Registration Rights Agreement to be entered into
among the Issuers and the Initial Purchasers in form and substance reasonably
satisfactory to the Initial Purchasers (the "Registration Rights Agreement"),
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pursuant to which the Issuers will agree to use their best efforts to file and
have declared effective a registration statement (an "Exchange Offer
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Registration Statement"), or a shelf registration statement, with the Securities
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and Exchange Commission (the "Commission") registering the offer and sale of the
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Exchange Notes and guarantees referred to in the Registration Rights Agreement,
or resales of the Securities, as the case may be, under the Securities Act.
1. Representations and Warranties. The Issuers, jointly and
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severally, represent and warrant to and agree with you that:
(a) The Preliminary Offering Memorandum, as of its date, and the
Final Offering Memorandum, as of its date and as of the Closing Date (as
defined below), do not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set
forth in this Section 1(a) do not apply to statements or omissions
contained in the Preliminary Offering Memorandum or the Final Offering
Memorandum made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished by the Initial Purchasers to
the Company in writing expressly for use in either Memorandum or any
amendment or supplement thereto;
(b) Neither the Company nor any of the Guarantors has sustained,
since the date of the most recent financial statements included in the
Final Offering Memorandum, any loss or interference with its business (i)
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or (ii) from any labor dispute or court or governmental action,
order or decree, which loss or interference in the case of (i) and (ii)
above is material to the Company and the Guarantors, taken as a whole;
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(c) Since the respective dates as of which information is given in
the Final Offering Memorandum there has not been, and prior to the Closing
Date there will not be, any change in the capital stock or other equity
interests or long-term debt, or any material change in the short-term debt,
of the Company or any of the Guarantors, other than as contemplated in
connection with the Acquisitions and the Other Financings, or any change or
development which could reasonably be expected to have a material adverse
effect upon the business, assets, condition (financial or otherwise),
results of operations or prospects of the Company and the Guarantors, taken
as a whole, or on the ability of the Issuers to perform their respective
obligations under this Agreement, the Notes, the Guarantees, the Indenture,
the Registration Rights Agreement and the Other Transaction Documents (a
"Material Adverse Effect"), in each case other than as fully disclosed in
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the Final Offering Memorandum;
(d) The Company and the Guarantors have, as of the date hereof, and
will have, upon the consummation of the Acquisitions and the Other
Financings, 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
Permitted Liens, and any real property and buildings held under lease by
the Company and the Guarantors are, as of the date hereof, and will be,
upon the consummation of the Acquisitions and the Other Financings, held by
them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made of such real
property and buildings by the Company and the Guarantors; all rent and
other sums and charges payable by the Company and the Guarantors as tenants
thereunder are current, no termination event or condition or uncured
default on the part of the Company or any such Guarantor or, to the best of
the Company's knowledge and belief, the landlord, exists under any such
lease; each of the Company and the Guarantors has complied with all
material obligations, considering applicable grace periods, under all
material leases to which such person is a party and under which such person
is in occupancy; with respect to all such leases, to the best knowledge of
the Company, no person has instituted or threatened to institute
proceedings, or has taken or threatened to take any other action, to
challenge or terminate, and no event or circumstance has occurred which
reasonably could be expected to materially interfere with (x) the lessee's
right to occupy the premises leased thereunder or to continue to use such
premises in the manner in which it is currently being used, or (y) the
lessor's right to continue to lease such premises to the lessee; and none
of such leases contains any provision restricting the incurrence of
indebtedness by the lessee, or any unusual or
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burdensome provision which could reasonably be expected to have a Material
Adverse Effect;
(e) The Company and each Guarantor (excluding StyroChem
International, Inc. and StyroChem International, Ltd.) has been duly
incorporated or organized and is validly existing as a corporation or
limited partnership, as the case may be, in good standing under the laws of
the State of Delaware, with power and authority to own its properties and
to conduct its business as described in the Final Offering Memorandum and
to enter into and perform its obligations under this Agreement, and has
been duly qualified as a foreign corporation or limited partnership, as the
case may be, for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases property, or
conducts any business, so as to require such qualification; each of
StyroChem International, Inc., and StyroChem International, Ltd. has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and to conduct its
business as described in the Final Offering Memorandum and to enter into
and perform its obligations under this Agreement and, except as set forth
in the Disclosure Schedule provided by the Sellers pursuant to the Stock
Purchase Agreement, 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 property, or conducts any
business, so as to require such qualification; other than the Subsidiaries
listed on Schedule 2 hereto, the Company has no direct or indirect
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Subsidiaries;
(f) The Company had, at the date indicated in the Final Offering
Memorandum, an authorized, issued and outstanding capitalization as set
forth in the column entitled "Actual" under the caption "Capitalization" in
the Final Offering Memorandum and, based on the assumptions stated in the
Final Offering Memorandum, the Company would have had, on the date
indicated, the adjusted capitalization as set forth in the column entitled
"Pro Forma" under the caption "Capitalization" in the Final Offering
Memorandum; as of the date hereof and upon the consummation of the
Acquisitions and the Other Financings, (i) all of the outstanding shares of
capital stock of the Company are and will be duly and validly authorized
and issued and are fully paid and non-assessable, and will be owned of
record free and clear of all liens, encumbrances, equities or claims; (ii)
except as described in the Final Offering Memorandum, after giving effect
to the Acquisitions and the Other Financings, there will be no outstanding
options, warrants, or other rights, calling for the issuance of, and no
commitments, plans, or arrangements to issue any shares of capital stock
of, the Company or any security convertible or
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exchangeable or exercisable for capital stock of the Company; (iii) except
as described in the Final Offering Memorandum, all of the issued shares of
capital stock of each Guarantor are and will be duly and validly authorized
and issued, fully paid and non-assessable and, upon consummation of the
Acquisitions and Other Financings, will be owned directly by the Company or
a wholly-owned Subsidiary, free and clear of all liens, encumbrances,
equities or claims; (iv) all partnership interests of the Joint Venture,
upon consummation of the Acquisitions and the Other Financings, will be
owned directly or indirectly by the Company or a wholly-owned Subsidiary,
free and clear of all liens, encumbrances, equities or claims; and (v)
except as described in the Final Offering Memorandum, after giving effect
to the Acquisitions and the Other Financings, there will be no outstanding
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, any equity interests of any Guarantor;
(g) This Agreement has been duly authorized, executed and delivered
by each of the Issuers and, assuming due authorization, execution and
delivery by the Initial Purchasers, is a legal, valid and binding agreement
of the Issuers enforceable against the Issuers in accordance with its
terms, except as (i) may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or fraudulent transfer or
other similar laws relating to or affecting creditors' rights generally,
(ii) such enforceability is subject to general principles of equity
regardless of whether such enforceability is considered in a proceeding in
equity or at law and (iii) rights to indemnity and contribution may be
limited by state or Federal laws relating to securities or by policies
underlying such laws;
(h) The Indenture has been duly authorized by each of the Issuers,
and, when executed and delivered by the Issuers on the Closing Date, and
assuming due authorization, execution and delivery by the Trustee, will be
a legal, valid and binding agreement of the Issuers enforceable against the
Issuers in accordance with its terms, except as (i) may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or fraudulent transfer or other similar laws relating to or affecting
creditors' rights generally and (ii) such enforceability is subject to
general principles of equity regardless of whether such enforceability is
considered in a proceeding in equity or at law; and the Indenture will be
in sufficient form for qualification under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the rules and regulations of
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the Commission promulgated thereunder and will conform in all material
respects to the description thereof set forth in the Final Offering
Memorandum;
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(i) The Notes and the Exchange Notes have been duly and validly
authorized and, when executed and authenticated in accordance with the
terms of the Indenture and when the Notes have been delivered to and paid
for by the Initial Purchasers in accordance with the terms of this
Agreement, (i) will be legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as
(A) may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or fraudulent transfer or other similar laws relating
to or affecting creditors' rights generally and (B) such enforceability is
subject to general principles of equity regardless of whether such
enforceability is considered in a proceeding in equity or at law and (ii)
will be entitled to the benefits of the Indenture; and the Securities will
conform in all material respects to the descriptions thereof contained in
the Final Offering Memorandum under the heading "Description of the Notes;"
(j) The Guarantees have been duly and validly authorized and, when
executed and authenticated in accordance with the terms of the Indenture
and delivered to the Initial Purchasers in accordance with the terms of
this Agreement, (i) will be legal, valid and binding obligations of the
Guarantors enforceable against the Guarantors in accordance with their
terms, except as (A) may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or fraudulent transfer or
other similar laws relating to or affecting creditors' rights generally and
(B) such enforceability is subject to general principles of equity
regardless of whether such enforceability is considered in a proceeding in
equity or at law and (ii) will be entitled to the benefits of the
Indenture;
(k) The Registration Rights Agreement has been duly authorized by
each of the Issuers, and, assuming due authorization, execution and
delivery by the Initial Purchasers, when executed and delivered by the
Issuers on or prior to the Closing Date, will be a legal, valid and binding
agreement of the Issuers enforceable against the Issuers in accordance with
its terms, except as (i) may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or fraudulent transfer or
other similar laws relating to or affecting creditors' rights generally,
(ii) such enforceability is subject to general principles of equity
regardless of whether such enforceability is considered in a proceeding in
equity or at law and (iii) rights to indemnity and contribution may be
limited by state or Federal laws relating to securities or by policies
underlying such laws; and the Registration Rights Agreement will conform in
all material respects to the description thereof set forth in the Final
Offering Memorandum;
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(l) The execution, delivery and performance by the Issuers of this
Agreement, the Indenture, the Securities and the Registration Rights
Agreement, in each case to the extent each Issuer is a party, and the
consummation of the transactions contemplated hereby and thereby including,
without limitation, the issuance, sale and delivery of the Securities, the
consummation of the Acquisitions and the Other Financings and the
execution, delivery and performance by the Company of the Other Transaction
Documents, will not (1) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, bank loan or credit agreement, lease or
other agreement or instrument to which the Company or any of the Guarantors
is a party or by which the Company or any of the Guarantors is bound or to
which any of the property or assets of the Company or any of the Guarantors
is subject, (2) result in any violation of the provisions of the charter,
including without limitation any Certificate of Incorporation, Articles of
Incorporation or Certificate of Limited Partnership, as the case may be, or
the By-laws or Agreement of Limited Partnership (or other organizational or
governing documents), in each case as amended, of the Company or any of the
Guarantors or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
the Guarantors or any of their properties, (3) result in or require the
creation or imposition of any Lien upon or with respect to any of the
properties of the Company or any of the Guarantors, except pursuant to or
as contemplated by the terms of the Indenture and the Credit Agreements, or
(4) constitute a default under any ordinance, license or permit, except, in
the case of the events specified in clauses (1), (3) and (4) above, for
such conflicts, violations or defaults which would not have a Material
Adverse Effect; no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issuance and sale of the Securities or the consummation of
the other transactions contemplated by this Agreement, the Indenture and
the Registration Rights Agreement or the consummation of the Acquisitions
or the Other Financings, including, without limitation, the issuance, sale
and delivery of the Securities and the execution, delivery and performance
by the Company and the Guarantors of the Other Transaction Documents,
except such consents, approvals, authorizations, registrations or
qualifications as have been obtained or as may be required under state
securities or Blue Sky laws in connection with the offer and sale of the
Securities and as may be required by the Securities Act, the securities or
Blue Sky laws of the various states and the Trust Indenture Act in
conjunction with an exchange offer for, or registered resale of, the
Securities pursuant to the Registration Rights
8
Agreement; the Company and each Guarantor has full power and authority to
enter into and perform its obligations under this Agreement, the Indenture,
the Registration Rights Agreement and the Other Transaction Documents and
to issue, sell and deliver the Securities to be sold to the Initial
Purchasers as provided herein and therein;
(m) Except as set forth in the Final Offering Memorandum, there are
no legal or governmental proceedings (other than proceedings with respect
to Environmental Laws or Hazardous Materials in respect of which Section
1(s) is applicable) pending to which the Company or any of the Guarantors
is a party or of which any property of the Company or any of the Guarantors
is the subject which are reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect; to the best knowledge of the
Issuers, no such proceedings are threatened or contemplated by governmental
authorities or threatened or contemplated by others; and the statements
made in the Final Offering Memorandum, insofar as they describe agreements,
contracts or legal proceedings, constitute fair summaries thereof and are
accurate in all material respects; all pending legal or governmental
proceedings to which the Company or any Guarantor is a party or of which
any of their respective property or assets is the subject which are not
described in the Final Offering Memorandum, including ordinary routine
litigation incidental to the business, are, considered in the aggregate,
not material;
(n) Except as set forth in the Final Offering Memorandum, the Company
and each Guarantor, on the date hereof, owns or possesses, and upon
consummation of the Acquisitions and the Other Financings, will own or
possess, all governmental licenses, permits, certificates, consents,
orders, approvals and other authorizations (including those required by
applicable Environmental Laws (as defined below)) necessary to own, lease,
construct and operate its properties and to conduct its business as
presently conducted by it and described in the Final Offering Memorandum,
except where the failure to own or possess such licenses, permits,
certificates, consents, orders, approvals and other authorizations would
not have, individually or in the aggregate, a Material Adverse Effect
(collectively, "Material Licenses"); all of the Material Licenses are valid
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and in full force and effect, the Company and each Guarantor has fulfilled
and performed its respective obligations with respect to such Material
Licenses, and no event has occurred which allows, or after notice or lapse
of time or both would allow, revocation or termination thereof or result in
any other material impairment of the rights of the holder of any such
Material Licenses; and neither the Company nor any Guarantor has received
any written notice of proceedings relating to revocation, modification or
termination of any such Material Licenses which could reasonably be
expected to
9
have, individually or in the aggregate, a Material Adverse Effect;
(o) Each of Xxxxxx Xxxxxxxx LLP and Deloitte and Touche LLP, who have
certified certain financial statements as set forth in their reports
included in each Memorandum, are independent public accountants as required
by the Securities Act and the rules and regulations of the Commission
thereunder;
(p) The consolidated financial statements of the Company and its
Subsidiaries, the financial statements of the J.R. Cup Foam Container
Operations of Xxxxx River Paper Company, Inc. and the consolidated
financial statements of SP Acquisition Co. and its Subsidiaries included in
each Memorandum present fairly the consolidated financial condition,
results of operations, and cash flows of the Company and its Subsidiaries,
the J.R. Cup Foam Container Operations of Xxxxx River Paper Company, Inc.
and SP Acquisition Co. and its Subsidiaries, respectively, as of the dates
and for the periods therein specified and the balance sheets included in
each Memorandum present fairly the financial condition and stockholders'
equity or owner's investment, as the case may be, of the Company and its
Subsidiaries, the J.R. Cup Foam Container Operations of Xxxxx River Paper
Company, Inc. and SP Acquisition Co. and its Subsidiaries as of the date
specified, in each case in conformity with generally accepted accounting
principles consistently applied throughout the periods involved, except as
otherwise stated therein; the unaudited pro forma financial data included
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in each Memorandum have been prepared in accordance with the rules and
guidelines of the Commission with respect to pro forma financial data and
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give effect to assumptions which have been made on a reasonable basis and
the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein; and the other financial,
accounting and statistical information and data related to the Company and
its Subsidiaries, the J.R. Cup Foam Container Operations of Xxxxx River
Paper Company, Inc. and SP Acquisition Co. and its Subsidiaries set forth
in each Memorandum present fairly, in all material respects, the
information purported to be shown thereby at the respective dates and for
the respective periods to which they apply, and except as disclosed
therein, have been prepared on a basis consistent with the financial
statements and the books and records of the entities as to which such
information is shown;
(q) Neither the Company nor any of the Guarantors has violated any
Federal, state, local or foreign law relating to discrimination in
employment nor any applicable wage or hour laws, nor any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
and regulations promulgated thereunder ("ERISA"), nor has the
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Company or any of the Guarantors engaged in any unfair labor practice,
which in each case could reasonably be expected to result, singly or in the
aggregate, in a Material Adverse Effect; except as disclosed in the Final
Offering Memorandum, there is (i) no unfair labor practice complaint
pending against the Company or any of the Guarantors or, to the best
knowledge of the Issuers, threatened against any of them, before the
National Labor Relations Board or any state or local labor relations board,
and no significant grievance or significant arbitration proceeding arising
out of or under any collective bargaining agreement pending or, to the best
knowledge of the Issuers, threatened against any of them, (ii) no
significant strike, labor dispute, slowdown or stoppage pending against the
Company or any of the Guarantors or, to the best knowledge of the Issuers,
threatened against any of them or by the employers of any of their
principal suppliers or contractors, except (with respect to any matter
specified in clause (i) or (ii) above, singly or in the aggregate) such as
would not have a Material Adverse Effect, and the Issuers have no reason to
believe that the relationship of the Company and the Guarantors with their
employees is likely to have a Material Adverse Effect;
(r) The Company and each Guarantor, as of the date hereof, owns or
possesses and, upon consummation of the Acquisitions and the Other
Financings, will own or possess, adequate patent rights or licenses or
other rights to use patent rights, inventions, trademarks, service marks,
trade names and copyrights necessary to conduct the general business now
operated by it and neither the Company nor any of the Guarantors has
received any written notice of infringement of or conflict with asserted
rights of others with respect to any patent, patent rights, inventions,
trademarks, service marks, trade names or copyrights which, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect;
(s) Except as described in the Final Offering Memorandum, the Company
and each Guarantor believes that it is in compliance in all respects with
all Environmental Laws, except to the extent that failure to comply with
such Environmental Laws would not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect. Except as
described in the Final Offering Memorandum, none of the Company or any of
the Guarantors is the subject of any pending or, to the best knowledge of
the Issuers, threatened Federal, state, local or foreign investigation
evaluating whether any remedial action by the Company or the Guarantors is
needed to respond to a release of any Hazardous Materials (as defined
below) into the environment, resulting from the business operations of the
Company or any of the Guarantors or ownership or possession of any of their
properties or assets or is in contravention
11
of any Environmental Law that the Company reasonably believes could result,
individually or in the aggregate, in a fine or penalty in excess of
$100,000 or in a Material Adverse Effect; except as described in the Final
Offering Memorandum, none of the Company or any of the Guarantors has
received any written notice or claim, nor are there pending or, to the
knowledge of the Issuers, threatened lawsuits or governmental proceedings
against them, with respect to violations of or liabilities under any
Environmental Law or in connection with any release of any Hazardous
Material into the environment that could reasonably be expected to result
in a Material Adverse Effect. As used herein, "Environmental Laws" means
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any Federal, state, local or foreign law, regulation, license, permit,
certificate, consent, order, approval or other authorization applicable to
the business operations of the Company or any of the Guarantors or
ownership or possession of any of their properties or assets relating to
the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants and contaminants, and "Hazardous
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Materials" means those substances, wastes, pollutants or contaminants that
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are regulated by or form the basis of liability under any Environmental
Laws;
(t) Neither the Company nor any of the Guarantors is in violation of
any term or provision of its charter, including without limitation any
Certificate of Incorporation, Articles of Incorporation or Certificate of
Limited Partnership, as the case may be, or its By-Laws or Agreement of
Limited Partnership (or other organizational or governing documents), in
each case as amended to the date hereof; the Company and each Guarantor is
in compliance with all laws, rules, regulations, orders, judgments, writs
and decrees applicable to it (other than Environmental Laws in respect of
which Section 1(s) is applicable) other than those as to which failure to
be in compliance, individually or in the aggregate, could not reasonable be
expected to have a Material Adverse Effect;
(u) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default in the due performance
and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, bank loan or credit agreement, lease or other
agreement or instrument to which the Company or any of the Guarantors is a
party or by which the Company or any of the Guarantors is bound or to which
any of the property or assets of the Company or any of the Guarantors is
subject, which could reasonably be expected to have a Material Adverse
Effect;
(v) The Company and each Guarantor is conducting its business in
compliance with all applicable Federal, state, local and foreign laws,
rules, regulations, codes and
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ordinances relating to zoning, land use and employee or occupational safety
except where such noncompliance would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(w) The Company and each Guarantor has timely filed all Federal,
state, local and foreign income and other tax returns and notices required
to be filed by applicable law and all such tax returns were in all material
respects true, correct and complete; no audit, administrative proceedings
or court proceedings are presently pending with regard to any material
potential Federal, state, local or foreign tax of any nature; the Issuers
have no knowledge, or any reasonable grounds to know, of any tax
deficiencies which could reasonably be expected to have a Material Adverse
Effect; the Company and each Guarantor has paid (within the time and in the
manner prescribed by law) all Federal, state, local and foreign taxes of
any nature which are shown on its returns to be due, in each case except
for those not yet delinquent and those being contested in good faith by
appropriate proceedings diligently conducted for which the Company and/or
each Guarantor has established on its books and records adequate reserves
to pay all outstanding tax liabilities in accordance with GAAP; neither the
Company nor any of the Guarantors has requested any extension of time
within which to file any material tax return, which return has not since
been filed; the amounts currently set up as provisions for taxes or
otherwise by the Company and the Guarantors on their books and records are
sufficient for the payment of all their unpaid Federal, state, local and
foreign taxes accrued through the dates as of which they speak, and for
which the Company and the Guarantors may be liable in their own right, or
as a transferee of the assets of, or as successor to any other corporation,
association, partnership, joint venture or other entity;
(x) The Company and each Guarantor maintains insurance covering their
properties, operations, personnel and businesses, and such insurance
insures against such losses and risks as are adequate in accordance with
customary industry practice in the opinion of the Company and the
Guarantors to protect the Company and the Guarantors and their businesses;
neither the Company nor any of the Guarantors has received written notice
from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to
continue such insurance; and all such insurance is outstanding and duly in
force on the date hereof;
(y) The Company and each Guarantor maintains (and in the future will
maintain) a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization;
13
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(z) The Company and each Guarantor, immediately after the Closing
Date and after giving effect to the issuance of the Securities, the
Acquisitions and the Other Financings, will, in the opinion of the Company,
be Solvent; as used herein, the term "Solvent" means, with respect to any
-------
such entity on a particular date (i) the fair value of the property of such
entity is greater than the total amount of liabilities (including
contingent liabilities) of such entity, (ii) the present fair saleable
value of the assets of such entity is greater than the probable liability
of such entity on its total existing debts (including contingent
liabilities) as they become absolute and matured, (iii) such entity will be
able to pay its debts and liabilities as they mature and (iv) such entity
will not have unreasonably small capital for the business in which it is
engaged, as now conducted and as proposed to be conducted following the
consummation of the Acquisitions, the Offering and the Other Financings;
(aa) Neither the Company nor any "affiliate" (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") of the
---------
Company has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security
(as defined in the Securities Act) which is or will be integrated with the
sale of the Securities in a manner that would require the registration
under the Securities Act of the Securities or (ii) engaged in any form of
general solicitation or general advertising in connection with the offering
of the Securities (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act, or in any action which would
require the registration of the offering and sale of the Securities
pursuant to this Agreement or which would violate applicable state
securities or Blue Sky laws;
(ab) Neither the Company nor any of the Guarantors is 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 the published rules and regulations
-----------------------
thereunder;
14
(ac) Assuming the representations and warranties of the Initial
Purchasers are true and correct, it is not necessary, in connection with
the offer, sale and delivery of the Securities to the Initial Purchasers in
the manner contemplated by this Agreement and the Final Offering Memorandum
to register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act;
(ad) 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 securities of the Issuers which
are listed on a national securities exchange registered under Section 6 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
------------
the rules and regulations of the Commission promulgated thereunder, or
quoted in a U.S. automated interdealer quotation system;
(ae) None of the Issuers has distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of
the Securities, none of them will distribute, any offering material in
connection with the offering and sale of the Securities other than each
Memorandum;
(af) Neither the Company nor any Guarantor has or will take any
action, directly or indirectly, prohibited by Rule 10b-6 promulgated under
the Exchange Act, in connection with the offering of the Notes;
(ag) Except with respect to the fees and expenses of the Initial
Purchasers for their financial advisory services, which fees and expenses
will be paid by the Company on the Closing Date, neither the Company nor
any of the Guarantors nor any of their respective officers, directors or
employees has employed any broker or finder or incurred any liability for
any brokerage fees, commissions or finders' fees in connection with the
issuance of the Securities;
(ah) The Company and each Guarantor has complied and will comply with
all provisions of SECTION 517.075 of the Florida statutes, and all
regulations promulgated thereunder relating to issuers doing business with
the government of Cuba or with any person or affiliate located in Cuba;
(ai) None of the Company or the Guarantors or any agent thereof acting
on the behalf of any of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the
Securities to violate Regulation G (12 C.F.R. Part 207), Regulation T (12
C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
15
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal
Reserve System;
(aj) The Credit Agreements have been duly authorized by the Company
and the other Guarantors party thereto, and, when executed and delivered by
the Company and the other Guarantors party thereto on the Closing Date and
assuming due authorization, execution and delivery by the Banks, will be
legal, valid and binding agreements of the Company and the other Guarantors
party thereto, enforceable against the Company and the other Guarantors
party thereto in accordance with their terms, except as (i) may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or fraudulent transfer or other similar laws relating to or
affecting creditors' rights generally and (ii) such enforceability is
subject to general principles of equity regardless of whether such
enforceability is considered in a proceeding in equity or at law; and the
Credit Agreements will conform in all material respects to the descriptions
thereof set forth in the Final Offering Memorandum;
(ak) To the actual knowledge of the Issuers, all of the
representations and warranties of the Sellers in the Stock Purchase
Agreement concerning the business of StyroChem and its Subsidiaries are
true and correct in all material respects, and none of the Issuers (i) has
any actual knowledge that any such representation or warranty will not be
true and correct in all material respects as of the Closing Date or (ii)
assumes any responsibility for the accuracy or completeness of any
representation or warranty of the Sellers, provided that none of the
Issuers had actual knowledge that such representation or warranty was
inaccurate or incomplete on the Closing Date; and
(al) No statement, representation, warranty or covenant made by the
Issuers in this Agreement or made in any certificate or document required
by this Agreement to be delivered to the Initial Purchasers was or will be,
when made, inaccurate, untrue or incorrect.
Any certificate signed by an officer of the Company or any Guarantor
pursuant to this Agreement or in connection with the payment of the purchase
price and delivery of the certificates for the Securities, and delivered to the
Initial Purchasers or to counsel for the Initial Purchasers shall be deemed a
representation or warranty by the Company and such Guarantor to each Initial
Purchaser as to the matters covered thereby. Except with respect to the
representation made in Section 1(ak) hereof, all representations and warranties
of the Issuers, to the extent they relate to StyroChem, are made to the best of
the Company's knowledge, after reasonable investigation.
16
2. Purchase. On the basis of the representations and warranties
--------
contained in this Agreement, and subject to the terms and conditions herein set
forth, the Issuers agree to issue and sell to each Initial Purchaser, severally
and not jointly, and each Initial Purchaser, severally and not jointly, agrees
to purchase from the Issuers, at a purchase price of 97% of the principal amount
thereof, plus accrued interest, if any, from the Closing Date, the aggregate
principal amount of Securities set forth in Schedule A opposite the name of such
Initial Purchaser, plus any additional principal amount of Securities which such
Initial Purchaser may become obligated to purchase pursuant to the provisions of
Section 11 hereof.
3. Delivery of Securities. (a) Certificates evidencing beneficial
----------------------
interests in the Securities, in definitive form, without interest coupons,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), or in the name of such other eligible nominee of DTC identified by you
---
to the Issuers in writing at least two full business days prior to the Closing
Date, in the principal amounts corresponding to the aggregate principal amount
of the Securities sold to QIBs (as defined in Section 5 below) (the "Global
------
Securities"), and certificates evidencing one or more individually denominated
----------
Securities, each in definitive form, without interest coupons, registered in
such names and in such denominations as you may request in writing at least two
full business days prior to the Closing Date, in the principal amounts
corresponding to the aggregate principal amount of the Securities sold to
institutional "accredited investors" (as defined in Section 5 below) who are not
QIBs (the "Individual Securities") shall be delivered by or on behalf of the
---------------------
Issuers to you for your respective accounts against payment by you of the
purchase price therefor by wire transfer of immediately available funds to an
account specified by the Company by written notice to the Initial Purchasers,
for the purchase price of the Securities being sold by the Issuers in
Philadelphia, Pennsylvania, at 9:30 A.M., Philadelphia time, on December 5,
1996, or at such other time, date and place as you and the Company may agree
upon in writing, such time and date being herein called the "Closing Date." The
------------
Initial Purchasers and the Company have determined that it is not feasible to
close at an earlier date. The Issuers agree to reimburse the Initial Purchasers
by offset against the purchase price for the incremental cost of providing
immediately available funds over the cost of obtaining New York Clearing House
funds.
(b) Certificates for the Securities so to be delivered will be in
good delivery form, and will be made available for checking and packaging in
Philadelphia, Pennsylvania, at least 24 hours prior to the Closing Date.
(c) It is understood that each certificate evidencing Securities
shall bear the following legend, until in the opinion of counsel to the Issuers
such legend is no longer necessary or
17
advisable because such Securities are no longer subject to the restrictions on
transfer described therein:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL INVESTOR THAT IS AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES
FOR THE BENEFIT OF RADNOR HOLDINGS CORPORATION THAT IT WILL NOT, WITHIN
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY OR
THE LAST DATE ON WHICH THIS SECURITY WAS HELD BY AN AFFILIATE OF RADNOR
HOLDINGS CORPORATION, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A)
TO RADNOR HOLDINGS CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE), (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES
TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF SUCH HOLDER'S PROPERTY OR
THE PROPERTY OF SUCH HOLDER'S ACCOUNT AT ALL TIMES BE WITHIN ITS CONTROL
AND TO COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS; AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF ANY CERTIFICATED SECURITY WITHIN THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE OF THE SECURITY OR THE LAST DATE ON WHICH SUCH
CERTIFICATED SECURITY WAS HELD BY AN AFFILIATE OF RADNOR HOLDINGS
CORPORATION, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE OF SUCH CERTIFICATED SECURITY RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT SUCH CERTIFICATED SECURITY TO THE TRUSTEE. IF ANY
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND RADNOR HOLDINGS
CORPORATION, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR APPLICABLE STATE
SECURITIES LAWS. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY
18
TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
The Company shall pay any transfer taxes payable in connection with
the initial delivery to the Initial Purchasers of the Securities.
4. Representations and Warranties of the Initial Purchasers. Each
--------------------------------------------------------
Initial Purchaser proposes to offer the Securities for resale only to certain
investors (as further described in subparagraph (a) of this Paragraph 4) upon
the terms and conditions set forth in this Agreement and each Memorandum at a
purchase price initially equal to 100% of their face amount and each Initial
Purchaser hereby represents and warrants to, and agrees with the Company, that:
(a) Such Initial Purchaser is an institutional "accredited investor"
(as defined in 501(a)(1), (2), (3) or (7) under the Securities Act) and
will offer or sell the Securities only to persons who the Initial Purchaser
reasonably believes are "qualified institutional buyers" ("QIBs") within
----
the meaning of Rule 144A under the Securities Act in transactions meeting
the requirements of Rule 144A and to a limited number of institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act) that, prior to their purchase of the Securities,
deliver to such Initial Purchaser a letter containing the representations
and agreements set forth in Exhibit A hereto;
---------
(b) Such Initial Purchaser has not and will not offer or sell the
Securities by any form of general solicitation or general advertising,
including but not limited to, the methods described in Rule 502(c) under
the Securities Act;
(c) Such Initial Purchaser agrees that, prior to or simultaneously
with the confirmation of sale to any purchaser of any of the Securities
purchased by such Initial Purchaser from the Issuers pursuant hereto,
provided that the Issuers have complied with their obligations under
Section 6(a) hereof, such Initial Purchaser shall furnish to that purchaser
a copy of the Final Offering Memorandum (and any amendment thereof or
supplement thereto that the Issuers shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale); and
(d) Such Initial Purchaser understands that the Issuers, and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Section 7 hereof, Duane, Morris & Heckscher, counsel to the Issuers, and
Milbank, Tweed, Xxxxxx & XxXxxx, counsel to the Initial Purchasers, will
rely upon the accuracy and truth of the foregoing representations and such
Initial Purchaser hereby consents to such reliance.
19
5. Covenants of the Issuers. In consideration of the agreements of
------------------------
the Initial Purchasers contained in this Agreement, each of the Issuers jointly
and severally covenants and agrees as follows:
(a) To furnish to the Initial Purchasers, without charge, as many
copies of each Memorandum and any supplements and amendments thereto as the
Initial Purchasers may reasonably request;
(b) Before amending or supplementing the Final Offering Memorandum
subsequent to the execution of this Agreement, to furnish to the Initial
Purchasers a copy of each such proposed amendment or supplement and not to
use any such proposed amendment or supplement to which the Initial
Purchasers reasonably object;
(c) If, at any time prior to the completion of the distribution of the
Securities by the Initial Purchasers, any event occurs as a result of which
the Final Offering Memorandum as then amended or supplemented would include
any untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other reason it
is necessary at any time to amend or supplement the Final Offering
Memorandum to comply with applicable law, the Issuers will promptly notify
the Initial Purchasers thereof and will prepare, at the expense of the
Issuers, an amendment or supplement to the Final Offering Memorandum that
corrects such statement or omission or effects such compliance and deliver
such amendment or supplement to the Initial Purchasers;
(d) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions in the United States as
the Initial Purchasers shall reasonably request; provided, however, that
-------- -------
none of the Issuers shall be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject; to file such statements and
reports as may be required by the laws of each jurisdiction in which the
Securities have been qualified as above provided; to supply the Initial
Purchasers with such information as is necessary for the determination of
the legality of the Securities in such jurisdictions as the Initial
Purchasers may reasonably request;
(e) Not, and not permit any of its Affiliates to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the
20
Securities Act) which could be integrated with the sale of the Securities
in a manner which would require the registration under the Securities Act
of such Securities;
(f) Except following the effectiveness of the Exchange Offer
Registration Statement, not to solicit any offer to buy or offer to sell
the Securities by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities
Act) or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act;
(g) While any of the Securities remain outstanding, to make available,
upon request, to any seller and to any prospective purchaser of such
Securities the information specified in Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to Section 13 or 15(d)
of the Exchange Act;
(h) To use its best efforts to permit the Securities to be designated
PORTAL securities in accordance with the rules and regulations adopted by
the National Association of Securities Dealers, Inc. relating to trading in
the PORTAL Market and to use its best efforts to permit the Securities to
be eligible for clearance and settlement through The Depository Trust
Company;
(i) For a period of five years following the Closing Date, furnish to
the Initial Purchasers copies of any annual reports, quarterly reports and
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or
such other similar forms as may be designated by the Commission, and such
other documents, reports and information as shall be furnished by the
Company to the Trustee or to the holders of the Securities pursuant to the
Indenture;
(j) Not, and not permit any of its Affiliates to, resell any
Securities that have been acquired by any of them;
(k) To use the proceeds from the sale of the Securities in the manner
set forth in the Final Offering Memorandum and in a manner that will not
result in any of the Issuers becoming an investment company within the
meaning of the Investment Company Act, and the rules and regulations of the
Commission thereunder; and
(l) Upon consummation of the StyroChem Acquisition and as of the
Closing Date, to cause each of SP Acquisition Co., StyroChem International
Inc. and StyroChem International, Ltd. to become a Guarantor within the
meaning of the Indenture and this Agreement and to sign and become parties
to the Indenture, this Agreement and the Registration Rights Agreement.
21
The Company and each Guarantor shall not, and shall cause each of its
Affiliates not to, offer, sell, contract to sell or grant any option to purchase
or otherwise transfer or dispose of any debt security, or any security
convertible into or in exchange for, any such debt security of the Company or
any such Guarantor (other than any private loan, credit or financing agreement
with a bank or similar institution, or in connection with the Exchange Offer (as
defined in the Registration Rights Agreements)), for a period of 180 days after
the date of this Agreement, without the prior written consent of the Initial
Purchasers.
6. Expenses. Each of the Issuers jointly and severally covenants
--------
and agrees that the Issuers will pay or cause to be paid: (a) the fees,
disbursements and expenses of counsel and accountants for the Issuers and the
Trustee and its counsel, and all other expenses, in connection with the
preparation and printing of each Memorandum and amendments and supplements
thereto and the furnishing of copies thereof, including charges for mailing, air
freight and delivery and counting and packaging thereof and related offering
documents to the Initial Purchasers and dealers; (b) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 6(d) hereof, including disbursements and
expenses for counsel for the Initial Purchasers in connection with such
qualification and in connection with Blue Sky surveys; (c) any fees charged by
rating agencies for the rating of the Securities; (d) the costs and expenses in
connection with the preparation, issuance and delivery of the Securities; (e)
its pro rata share of the costs and expenses relating to investor presentations
on any "road show" undertaken in connection with the marketing of the Notes,
including, without limitation, travel fees and expenses; and (f) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section 6, including the fees,
if any, incurred in connection with the admission of the Securities for trading
in any appropriate market system, including fees of the National Association of
Securities Dealers, Inc. ("NASD") in connection with the initial and continued
----
designation of the Securities as PORTAL Securities under the PORTAL Market Rules
pursuant to NASD Rule 5322, the cost of the personnel of each of the Issuers and
other internal costs, the cost of printing and engraving the certificates
representing the Securities and all expenses and property, excise and similar
taxes incident to the sale and delivery of the Securities to be sold by the
Issuers to the Initial Purchasers hereunder. The Company will also reimburse
the Initial Purchasers for all out-of-pocket expenses. It is understood,
however, that, except as provided in this Section 6, the Initial Purchasers
shall pay all of their own costs and expenses (including the fees of their
counsel), including any advertising expenses incurred in connection with any
offers they may make. If the sale of the Securities provided for herein is not
consummated pursuant to the termination provisions of Section 12
22
hereof which prevent this Agreement from becoming effective, or by reason of any
failure, refusal or inability on the part of the Issuers to perform any
agreement on their part to be performed or because any other condition of the
Initial Purchasers' obligations hereunder are not fulfilled, the Company shall
reimburse the Initial Purchasers for all out-of-pocket disbursements (including
reasonable fees and disbursements of counsel) incurred by the Initial Purchasers
in connection with any investigation made by them, any preparation made by them
in respect of the marketing of the Securities or in contemplation of the
performance by them of their obligations hereunder.
7. Conditions to the Initial Purchasers' Obligations. The
-------------------------------------------------
obligations of the Initial Purchasers hereunder shall be subject, in the Initial
Purchasers' discretion, to the following additional conditions:
(a) The representations and warranties of the Issuers contained in
this Agreement shall be true and correct as of the date hereof and as of
the Closing Date; and the Issuers shall have performed all covenants and
agreements and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Date.
(b) The sale of the Securities by the Issuers hereunder shall not be
enjoined (temporarily or permanently) on the Closing Date.
(c) Subsequent to the date as of which information is given in the
Final Offering Memorandum, except in each case as described in or as
contemplated by the Final Offering Memorandum, the Company and the
Guarantors shall not have incurred any liabilities or obligations, direct
or contingent (other than in the ordinary course of business), that are
material to the Company and the Guarantors taken as a whole or entered into
any transactions not in the ordinary course of business that are material
to the business, assets, condition (financial or other), results of
operations or prospects of the Company and the Guarantors taken as a whole.
(d) Subsequent to the date of this Agreement and prior to the Closing
Date, there shall not have occurred any downgrading, nor shall any notice
have been given of any intended or potential downgrading or of any review
for a possible change that does not indicate the direction of the possible
change, in the rating accorded any of the Company's securities, including
the Securities, by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act.
(e) The Initial Purchasers shall have received on the Closing Date a
certificate of the Company dated the Closing
23
Date and signed by its chief executive officer and by its chief financial
officer, to the effect set forth in clauses (a), (b), (c) and (d) above.
(f) The Initial Purchasers shall have received on the Closing Date a
certificate from each Guarantor, including StyroChem, dated the Closing
Date and signed by an executive officer of such Guarantor, to the effect
that the representations and warranties of such Guarantor contained in this
Agreement are true and correct as of the Closing Date and that such
Guarantor has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied on or before the
Closing Date.
(g) Milbank, Tweed, Xxxxxx & XxXxxx, counsel to the Initial
Purchasers, shall have been furnished with such papers and information as
they may reasonably have requested to enable them to pass upon the issuance
and sale of the Securities and the authorization, delivery, form and
validity of this Agreement, the Indenture, the Registration Rights
Agreement and the Other Transaction Documents and the accuracy and
completeness of the representations, warranties or statements of the
Company or any of the Guarantors, the performance of the covenants of the
Company or any of the Guarantors, or the fulfillment of any of the
conditions contained herein.
(h) (i) Duane, Morris & Heckscher, counsel to the Issuers, shall
have furnished to the Initial Purchasers its written opinion, dated the
Closing Date, in the form attached hereto as Exhibit B. In furnishing such
---------
opinion, such counsel may rely on opinions of counsel, provided, however,
-------- -------
that the Initial Purchasers shall have received a copy of each of such
opinions which shall be dated the Closing Date, addressed to the Initial
Purchasers or otherwise authorizing the Initial Purchasers to rely thereon,
and that Duane, Morris & Heckscher, in its opinion delivered pursuant to
this subsection, shall state that Duane, Morris & Heckscher has no reason
to believe that the Initial Purchasers are, and they are, not justified in
relying thereon.
(ii) Stikeman, Elliott, special Canadian counsel to StyroChem, shall
have furnished to the Initial Purchasers its written opinion, dated the
Closing Date, in the form attached hereto as Exhibit C.
---------
(iii) Xxxxxxxx Xxxxxxxx & Xxxxxx, special Texas counsel to StyroChem,
shall have furnished to the Initial Purchasers its written opinion, dated
the Closing Date, in the form attached hereto as Exhibit D.
---------
(i) Milbank, Tweed, Xxxxxx & XxXxxx, counsel to the Initial
Purchasers, shall have furnished to the Initial
24
Purchasers their written opinion or opinions, dated the Closing Date, in
form and substance satisfactory to you, with respect to the legal existence
of the Company and certain of the Issuers, the Securities, the Final
Offering Memorandum, the Indenture, the Registration Rights Agreement and
other related matters as the Initial Purchasers may reasonably request.
(j) (i) The Initial Purchasers shall have received on each of the
date hereof and the Closing Date a letter, dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
you, from Xxxxxx Xxxxxxxx LLP, independent public accountants for the
Company, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the consolidated financial statements of the Company, the financial
statements of the J.R. Cup Foam Container Operations of Xxxxx River Paper
Company, Inc. and certain financial information (including pro forma
financial data) contained in the Final Offering Memorandum.
(ii) The Initial Purchasers shall have received on each of the
date hereof and the Closing Date a letter, dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to the
Initial Purchasers, from Deloitte & Touche LLP, independent public
accountants for StyroChem, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the consolidated financial statements of StyroChem and
certain financial information contained in the Final Offering Memorandum.
(k) (i) Neither the Company nor any of the Guarantors shall have
sustained since September 30, 1996 any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree; and (ii) since the respective dates as of which
information is given in the Final Offering Memorandum, there shall not have
been any change in the capital stock or equity interests or long-term debt,
or any material change in the short-term debt, of the Company or any of the
Guarantors nor any material change otherwise than as set forth or
contemplated in the Final Offering Memorandum, the effect of which, in any
such case described in clause (i) or (ii), is in the judgment of the
Initial Purchasers so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities
on the terms and in the manner contemplated in the Final Offering
Memorandum.
(l) Subsequent to the execution and delivery of this Agreement (i)
there shall have been no declaration of war by the Government of the United
States; (ii) there shall not
25
have occurred any material adverse change in the financial or securities
markets in the United States or in political, financial or economic
conditions in the United States or any outbreak or material escalation of
hostilities or other calamity or crisis, the effect of which is such as to
make it, in the reasonable judgment of the Initial Purchasers,
impracticable to market the Securities or to enforce contracts for the
resale of Securities and (iii) no event shall have occurred resulting in
(A) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or on any automated quotation system or over-the-
counter market regulated by the NASD being suspended or materially limited
(other than limited halts due to market volatility pursuant to the rules of
such exchange, system or market) or minimum or maximum prices being
generally established on such exchange, or (B) additional material
governmental restrictions, not in force on the date of this Agreement,
being imposed upon trading in securities generally by such exchange or by
order of the Commission or any court or other governmental authority or (C)
a general banking moratorium being declared by either Federal or New York
authorities.
(m) The Issuers shall have furnished or caused to be furnished to the
Initial Purchasers at the Closing Date any additional certificates signed
by the secretary or by the chief executive officer and the chief financial
officer of the Company or any Guarantor, on behalf of the Issuers,
satisfactory to the Initial Purchasers as to such matters as the Initial
Purchasers may reasonably request.
(n) The Issuers and the Initial Purchasers shall have entered into
the Registration Rights Agreement.
(o) The Credit Agreements shall have been executed and delivered by
each of the parties thereto and shall be in full force and effect and the
Company shall have availability under the Credit Agreements to borrow the
amount necessary to consummate the transactions contemplated by the Final
Offering Memorandum.
(p) All of the elements of the StyroChem Acquisition and the Other
Financings to be consummated on or prior to the Closing Date shall have
been consummated, including without limitation the execution of the non-
competition agreement between the Company and Xxxxxxx Xxxxxxxxxx and the
execution of the consulting agreement between the Company and Xxxxxxx
Xxxxxxxxxx.
(q) The Company shall have consummated the J.R. Cup Acquisition and
shall have entered into such agreements in connection therewith as are
described in each Memorandum, including without limitation five-year
extensions of a sales agent agreement, an equipment use agreement and a
license
26
relating to certain trademark rights, a sublease on manufacturing and
warehouse facilities and a settlement of a dispute relating to certain
disability claims.
(r) The Notes shall have been designated for trading on PORTAL.
(s) All legal opinions and accountants' "comfort" letters received in
connection with the Acquisitions, whose form and substance shall have been
determined by the Company, shall be addressed to, or permit reliance on by,
and delivered to the Initial Purchasers.
8. Indemnity and Contribution. (a) Each of the Issuers jointly and
--------------------------
severally agree to indemnify and hold harmless each Initial Purchaser, its
officers, authorized representatives and directors (such officers, authorized
representatives and directors of the Initial Purchasers being referred to in
this Section 8(a) as "affiliated persons") and each person, if any, who controls
------------------
the Initial Purchasers within the meanings of Section 15 of the Securities Act
or Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities ("Losses"), joint or several, to which the Initial Purchasers or any
------
such controlling or affiliated person may become subject, under the Securities
Act, the Exchange Act, any other Federal or state statutory law or regulation,
at common law or otherwise, insofar as such Losses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Memorandum, or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading, and will reimburse the Initial Purchasers and such controlling or
affiliated persons for any legal or other expenses reasonably incurred by the
Initial Purchasers and such controlling or affiliated person in connection with
investigating, preparing to defend, defending or appearing as a third-party
witness in connection with any such action or claim; provided, however, that
-------- -------
none of the Issuers shall be liable in any such case to the extent that such
Losses arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission relating to the Initial Purchasers
made in any Memorandum, or any amendment or supplement in reliance upon and in
conformity with written information furnished to the Issuers by Alex. Xxxxx &
Sons Incorporated expressly for use therein; provided, further, that the
-------- -------
indemnity obligations arising under this Section 8(a) with respect to the
Preliminary Offering Memorandum shall not inure to the Initial Purchasers'
benefit or that of any such controlling or affiliated person if the person
asserting any such Losses purchased the Securities from the Initial Purchasers
and if a copy (provided that the Issuers have complied with their obligations
under Section 5(a) hereof) of the Final Offering
27
Memorandum was not sent or given by the Initial Purchasers or on the Initial
Purchasers' behalf to such person at or prior to the written confirmation of the
sale of the Securities to such person, and if the Final Offering Memorandum
would have cured the untrue statement or omission giving rise to such Losses.
The indemnity agreement in this Section 8(a) shall be in addition to
any liability which any of the Issuers may otherwise have.
(b) The Initial Purchasers will indemnify and hold harmless each
Issuer, its officers, authorized representatives and directors (such officers,
authorized representatives and directors of the Issuers being referred to in
this Section 8(b) as "affiliated persons") and each person, if any, who controls
------------------
any of the Issuers within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any Losses to which the Issuers may
become subject, under the Securities Act, the Exchange Act, any Federal or state
statutory law or regulation, at common law or otherwise, insofar as such Losses
(or actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement made by the Initial Purchasers in Section
4 hereof or (ii) an untrue statement or alleged untrue statement of a material
fact contained in any Memorandum, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Memorandum or such amendment or supplement in reliance
upon and in conformity with written information relating to the Initial
Purchasers furnished to the Issuers by the Initial Purchasers expressly for use
therein, and will reimburse the Issuers and such controlling persons for any
legal or other expenses reasonably incurred by any of the Issuers and such
controlling or affiliated persons in connection with investigating, preparing to
defend, defending or appearing as a third-party witness in connection with any
such action or claim.
The indemnity agreement in this Section 8(b) shall be in addition to
any liability which the Initial Purchasers may otherwise have.
(c) Promptly after receipt by an indemnified party under Section 8(a)
or 8(b) of notice of the commencement of any action (including any governmental
investigation), such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any
28
indemnified party under Section 8(a) or 8(b), except to the extent it was
unaware of such action and has been prejudiced in any material respect by such
failure, or from any liability which it may have to any indemnified party
otherwise than under such Section 8(a) or 8(b). In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. If, however, (i) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party or (ii) an indemnified party
shall have reasonably concluded that representation of such indemnified party
and the indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct due to actual or potential
differing interests between them and the indemnified party so notifies the
indemnifying party, then the indemnified party shall be entitled to employ
counsel different from counsel for the indemnifying party at the expense of the
indemnifying party and the indemnifying party shall not have the right to assume
the defense of such indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
local counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same set of allegations or circumstances. The counsel with respect to which
fees and expenses shall be so reimbursed shall be designated in writing by the
Initial Purchasers in the case of parties indemnified pursuant to Section 8(a)
and by Radnor Holdings Corporation in the case of parties indemnified pursuant
to Section 8(b).
The Issuers shall not be liable for any settlement of any such action
or proceeding effected without the Company's written consent (not to be
unreasonably withheld) and if settled with its written consent or if there is a
final judgment for the plaintiff, the Issuers agree to indemnify and hold
harmless each Initial Purchaser, its officers, authorized representatives and
directors and each person, if any, who controls the Initial Purchasers within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act to the extent provided in this Agreement. Without limiting the generality
of the foregoing, no indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or has been threatened
to be made a party by such indemnified
29
party and to which the indemnity herein is applicable; provided, however, that
-------- -------
an indemnifying party may effect such a settlement without the consent of the
indemnified party if such settlement includes an unconditional release of such
indemnified party from all liability for claims that are the subject matter of
such proceeding or the indemnifying party indemnifies the indemnified party in
writing and posts a bond for an amount equal to the maximum liability for all
such claims as contemplated above.
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 8 is for any reason unavailable to (other than by reason of
exceptions provided therein), or insufficient to hold harmless, an indemnified
party in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party under such
paragraphs, in lieu of indemnifying such indemnified party thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party or parties on the other hand from the
offering of the Securities or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, not only such relative benefits
but also the relative fault of the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand in connection with the
statements or omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof) 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 hand
shall be deemed to be in the same proportion as the total proceeds from the
offering of the Securities (net of discounts and commissions but before
deducting expenses) received by the Issuers bears to the total discounts and
commissions received by the Initial Purchasers, as set forth on the cover page
of the Final Offering Memorandum. The relative fault of the parties 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, on the one hand
or in writing by the Initial Purchasers, on the other hand, the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
--- ----
(even if the Issuer and the Initial Purchasers were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately
30
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to in Section 8(d) shall be deemed to include, subject to the
limitations set forth above, any legal fees or other expenses reasonably
incurred by such indemnified party in connection with defending or investigating
any such action or claim. Notwithstanding the provisions of this Section 8, in
no event shall the Initial Purchasers be required to contribute any amount in
excess of the Initial Purchasers' discounts and commissions applicable to the
Notes. 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 amount paid
or payable by any party as a result of this Section 8(e) shall be deemed to
include any legal or other expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending such claim.
(f) Promptly after receipt by any party to this Agreement of notice of
the commencement of any action, suit or proceeding, such party will, if a claim
for contribution in respect thereof is to be made against another party (the
"contributing party"), notify the contributing party of the commencement
------------------
thereof; but the omission so to notify the contributing party will not relieve
it from any liability which it may have to any other party for contribution
under the Securities Act, the Exchange Act or otherwise, except to the extent it
was unaware of such action and has been prejudiced in any material respect by
such failure or from any liability which it may have to any other party other
than for contribution under the Securities Act, the Exchange Act or otherwise.
In case any such action, suit or proceeding is brought against any party, and
such party notifies a contributing party of the commencement thereof, the
contributing party will be entitled to participate therein with the notifying
party and any other contributing party similarly notified.
9. Survival of Representations and Warranties. The respective
------------------------------------------
indemnities, agreements, representations, warranties and other statements of the
Issuers and the Initial Purchasers, as set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of the Initial Purchasers or any
controlling person of the Initial Purchasers, any of the Issuers, or an officer
or director or controlling person of any of the Issuers, and shall survive
delivery of and payment for the Securities.
10. Termination. The obligations of the Initial Purchasers hereunder
-----------
may be terminated by the Initial Purchasers by notice given to and received by
the Company prior to delivery of and payment for the Securities, if, prior to
that time, any of
31
the events described in Section 7(d), 7(k) or 7(l) shall have occurred or if the
Initial Purchasers shall decline to purchase the Securities for any reason
permitted under this Agreement.
11. Default by Initial Purchasers. (a) If any Initial Purchaser
-----------------------------
shall default in its obligation to purchase the Securities which it has agreed
to purchase hereunder, the non-defaulting Initial Purchaser may in its
discretion arrange for it or another party or other parties to purchase such
Securities on the terms contained herein. If within 24 hours after such default
by any Initial Purchaser the non-defaulting Initial Purchaser does not arrange
for the purchase of such Securities, then the Issuers shall be entitled to a
further period of 24 hours within which to procure another party or other
parties satisfactory to the non-defaulting Initial Purchaser to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, the non-defaulting Initial Purchaser notifies the Issuers that it has
so arranged for the purchase of such Securities, or the Issuers notify the non-
defaulting Initial Purchaser that they have so arranged for the purchase of such
Securities, the non-defaulting Initial Purchaser or the Issuers shall have the
right to postpone the Closing Date for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the Final
Offering Memorandum or in any other documents or arrangements, and the Issuers
agree to prepare promptly any amendments or supplements to the Final Offering
Memorandum which in the opinion of the non-defaulting Initial Purchaser may
thereby be made necessary. The term "Initial Purchasers" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser by the non-defaulting Initial
Purchaser or the Issuers as provided in subsection (a) above, the aggregate
principal amount of such Securities which remain unpurchased exceeds one-
eleventh of the aggregate principal amount of all the Securities, then this
Agreement shall thereupon terminate without liability on the part of any non-
defaulting Initial Purchaser or the Issuers, except for the expenses to be borne
by the Issuers as provided in Section 7 and the indemnity agreement in Section
8, but nothing herein shall relieve a defaulting Initial Purchaser from
liability for its default.
12. Default by the Issuers. If (a) the Issuers shall fail to tender
----------------------
the Securities for delivery to the Initial Purchasers for any reason or (b) the
Initial Purchasers shall decline to purchase the Securities for any reason
permitted under this Agreement (including the termination of this Agreement
pursuant to Section 10), the Issuers shall jointly and severally reimburse the
Initial Purchasers for the reasonable fees and expenses of its counsel and for
such other reasonable out-of-
32
pocket expenses as shall have been incurred by it in connection with this
Agreement and the proposed purchase of the Securities, and upon demand the
Issuers shall jointly and severally pay the full amount of such fees and
expenses to the Initial Purchasers.
13. Notices. All statements, requests, notices and agreements
-------
hereunder shall be in writing or by written telecommunication, and shall be
sufficient in all respects if delivered or sent by registered mail, if to the
Initial Purchasers, to Alex. Xxxxx & Sons Incorporated at 1290 Avenue of the
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: High Yield
Department; and if to any of the Issuers, to Xxxxxx Xxxxxxxx Xxxxxxxxxxx, 0
Xxxxxx Xxxxxxxxx Center, Xxxxx 000, 000 Xxxxxxxxxx Xxxx, Xxxxxx, XX 00000,
Attention: Treasurer.
14. Parties. This Agreement shall be binding upon, and inure solely
-------
to the benefit of, the Initial Purchasers, the Issuers, and, to the extent
provided in Section 8 hereof, the officers and directors of the Issuers and each
person who controls the Issuers or the Initial Purchasers and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities from the Initial Purchasers shall be deemed a
successor or assign by reason merely of such purchase.
15. Headings. The headings of the sections of this Agreement have
--------
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
16. Time of Essence. Time shall be of the essence of this Agreement.
---------------
17. Governing Law. This Agreement shall be construed in accordance
-------------
with the laws of the State of New York.
18. Counterparts. This Agreement may be executed by any one or more
------------
of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
[Signature Pages Follow]
33
If the foregoing is in accordance with your understanding, please sign
and return to us a counterpart hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
among you and the Issuers.
Very truly yours,
RADNOR HOLDINGS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
WINCUP HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
WINCUP HOLDINGS, L.P.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
SP ACQUISITION CO. *
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
_____________________
* Only upon consummation of the StyroChem Acquisition on the Closing Date.
34
STYROCHEM INTERNATIONAL, INC. *
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
STYROCHEM INTERNATIONAL, LTD. *
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Accepted as of the date hereof:
ALEX. XXXXX & SONS INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Principal
NATWEST CAPITAL MARKETS LIMITED
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director/Gleacher
_________________
* Only upon consummation of the StyroChem Acquisition on the Closing Date.
35
SCHEDULE 1
Initial Purchasers Principal Amount
------------------
of Securities
----------------
Alex. Xxxxx & Sons Incorporated $ 80,000,000
NatWest Capital Markets Limited 20,000,000
-------------
$100,000,000
SCHEDULE 2
JURISDICTION OF
INCORPORATION
GUARANTORS OR FORMATION
---------- ------------
WinCup Holdings, Inc. Delaware
WinCup Holdings, L.P. Delaware
SP Acquisition Co.* Delaware
StyroChem International, Inc.* Texas
StyroChem International, Ltd.* Quebec
___________________________
* Only upon consummation of the StyroChem Acquisition on the Closing Date.
SCHEDULE 3
JURISDICTION OF
GUARANTORS FOREIGN QUALIFICATION
---------- ---------------------
WINCUP HOLDINGS, L.P. Arizona
California
Florida
Georgia
Illinois
Louisiana
Missouri
New Jersey
Ohio
Pennsylvania
Texas
WINCUP HOLDINGS, INC. Arizona*
California
Florida
Georgia
Illinois*
Louisiana
New Jersey
Ohio
Pennsylvania
Texas
Washington
____________________________
* Only upon consummation of the Closing on the Closing Date.
EXHIBIT A
TRANSFEREE LETTER OF REPRESENTATION
ALEX. XXXXX & SONS INCORPORATED
NATWEST CAPITAL MARKETS LIMITED
as Initial Purchasers in connection with
the offering referred to below
Radnor Holdings Corporation
c/o Alex. Xxxxx & Sons Incorporated
Attn: High Yield Department
1290 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Dear Ladies and Gentlemen:
In connection with our proposed purchase of $________ aggregate
principal amount of 10% Senior Notes due 2003 (the "Notes") of Radnor Holdings
-----
Corp., a Delaware corporation (the "Company"), we confirm that:
-------
1. We understand that the Senior Notes and the Guarantees thereon
(together, the "Securities") have not been registered under the Securities
----------
Act of 1933, as amended (the "Securities Act") or under the securities laws
--------------
of any state and, unless so registered, may not be sold except as permitted
in the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date which is three years
after the later of the date of original issue and the last date on which
the Company or any affiliate of the Company was the owner of such
Securities (or any predecessor thereto) (the "Resale Restriction
------------------
Termination Date") only (a) to the Company, (b) pursuant to a registration
----------------
statement which has been declared effective under the Securities Act, (c)
so long as the Securities are eligible for resale pursuant to Rule 144A
under the Securities Act, to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that purchases for its own
---
account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales to non-U.S. persons that occur outside the United States within the
meaning of Regulation S under the Securities Act, (e) to an institutional
"accredited investor" within the meaning of subparagraph (a)(1), (2), (3)
or (7) of Rule 501 under the Securities Act that is purchasing for his own
account or for the account of
A-1
such an institutional "accredited investor," in each case in a minimum
principal amount of Senior Notes of $250,000, for investment purposes and
not with a view to, or for offer or sale in connection with, any
distribution thereof in violation of the Securities Act or (f) pursuant to
any other available exemption from the registration requirements of the
Securities Act, subject in each of the foregoing cases to any requirement
of law that the disposition of our property or the property of such
investor account or accounts be at all times within our or their control
and to compliance with any applicable state securities laws. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. If any resale or other transfer of the Securities is
proposed to be made pursuant to clause (e) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Trustee,
which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of subparagraph
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act and that it is
acquiring such Securities for investment purposes and not for distribution
in violation of the Securities Act. We acknowledge on our own behalf and
on behalf of any investor account for which we are purchasing Securities
that the Company and the Trustee reserve the right prior to any offer, sale
or other transfer prior to the Resale Restriction Termination Date of the
Securities pursuant to clauses (d), (e) or (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
purchasing for our own account or for the account of such an institutional
"accredited investor," and we are acquiring the Securities for investment
purposes and not with a view to, or for offer or sale in connection with,
any distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and
we and any accounts for which we are acting are each able to bear the
economic risk of our or its investments.
3. We are acquiring at least $250,000 principal amount of the Senior
Notes and we are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
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4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party
in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
________________________
(Name of Purchaser)
By:_____________________
Date:___________________
Upon transfer the Senior Notes should be registered in the name of the
new beneficial owner as follows:
Name: ______________________
Address:_____________________
Taxpayer ID Number:__________
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EXHIBIT B
FORM OF OPINION OF DUANE, MORRIS & HECKSCHER
(pursuant to Section 7(h)(i) of the Purchase Agreement)
Capitalized terms are used as defined in the Purchase Agreement.
(a) Each of the Company, WinCup Holdings, Inc., WinCup Holdings, L.P.
and SP Acquisition Co. (the above Guarantors being referred to herein as the
"Delaware Subsidiaries") has been duly incorporated or organized and is validly
----------------------
existing as a corporation or a limited partnership in good standing under the
laws of the State of Delaware, with corporate or partnership power and authority
to own its properties and to conduct its affairs as described in the Final
Offering Memorandum. Each of the Company and the Guarantors has been duly
qualified as a foreign corporation or limited partnership for the transaction of
business and is in good standing under the laws of each jurisdiction set forth
beside the Company's or such Subsidiary's name on Schedule 3 to the Purchase
Agreement.
(b) As of the date hereof (after giving effect to the Acquisitions and
the Other Financings), (i) all of the outstanding shares of capital stock of the
Company are duly and validly authorized and issued and are fully paid and non-
assessable, and are owned of record free and clear, to such counsel's knowledge,
of all liens, encumbrances, equities or claims; (ii) such counsel has no
knowledge of any outstanding options, warrants or other rights, calling for the
issuance of, or any commitments, plans, or arrangements to issue any shares of
capital stock of, the Company or any security convertible or exchangeable or
exercisable for capital stock of the Company except, in each case, as described
in the Final Offering Memorandum; (iii) all of the issued shares of capital
stock of each of the Delaware Subsidiaries are duly and validly authorized and
issued, fully paid and non-assessable and are owned of record directly by the
Company or a wholly-owned Subsidiary, and such counsel has no knowledge of any
encumbrances, equities or claims on such shares; (iv) all partnership interests
of the Joint Venture are owned of record directly or indirectly by the Company
or a wholly-owned Subsidiary, and such counsel has no knowledge of any liens,
encumbrances, equities or claims on such interests; and (v) such counsel has no
knowledge of any outstanding rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, any equity interests of any
Delaware Subsidiary except, in each case, as described in the Final Offering
Memorandum.
(c) The Purchase Agreement has been duly authorized, executed and
delivered by the Company and each of the Delaware Subsidiaries.
B-1
(d) The Indenture has been duly authorized, executed and delivered by
the Company and each of the Delaware Subsidiaries and, assuming due
authorization, execution and delivery by the other parties thereto, is a legal,
valid and binding agreement of the Company and the Guarantors enforceable
against the Company and each of the Guarantors in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or fraudulent transfer or other similar laws relating to
or affecting the enforcement of creditors' rights generally and except as the
enforceability of the Indenture is subject to the application of general
principles of equity (regardless of whether considered in a proceeding in at law
or in equity) including, without limitation, (i) the possible unavailability of
specific performance, injunctive relief or any other equitable remedy and (ii)
concepts of materiality, reasonableness, good faith and fair dealing. The
Indenture conforms in all material respects to the description thereof set forth
in the Final Offering Memorandum.
(e) The Notes have been duly and validly authorized and, when executed
and authenticated in accordance with the terms of the Indenture and delivered to
and paid for by the Initial Purchasers in accordance with the terms of the
Purchase Agreement, (i) will be legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or fraudulent transfer or other similar laws relating to
or affecting the enforcement of creditors' rights generally and except as the
enforceability of the Notes is subject to the application of general principles
of equity (regardless of whether considered in a proceeding at law or in equity)
including, without limitation, (A) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (B) concepts of
materiality, reasonableness, good faith and fair dealing and (ii) will be
entitled to the benefits of the Indenture. The Securities conform in all
material respects to the description thereof set forth in the Final Offering
Memorandum under the heading "Description of the Notes."
(f) The Guarantees have been duly and validly authorized by the
Delaware Subsidiaries and, when the Notes have been executed by the Company and
authenticated, and the Guarantees have been executed by the Guarantors, in
accordance with the terms of the Indenture and the Guarantees have been
delivered to the Initial Purchasers in accordance with the terms of the Purchase
Agreement, the Guarantees (i) will be legal, valid and binding obligations of
the Guarantors enforceable against the Guarantors in accordance with their
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or fraudulent transfer or other similar laws
relating to or affecting the enforcement of creditors' rights generally and
except as the enforceability of the Guarantees is subject to the application of
general
B-2
principles of general equity (regardless of whether considered in a proceeding
at law or in equity) including, without limitation, (i) the possible
unavailability of specific performance, injunctive relief or any other equitable
remedy and (ii) concepts of materiality, reasonableness, good faith and fair
dealing and (ii) will be entitled to the benefits of the Indenture. Such
counsel may assume, in rendering the opinion expressed in this paragraph (f),
that, at the time of the execution and delivery by each of the Guarantors of the
Guarantees, each Guarantor is, and after giving effect to any payment by such
Guarantor under the Guarantee (or any other provision of the Indenture under
which such Guarantor agrees to be liable for the payment of principal of,
premium, if any, and interest on the Notes) such Guarantor will be, Solvent and
that adequate consideration exists, in the case of each Guarantor, for its
execution, delivery and performance of the Guarantee (and its agreements in
respect of any such other provision).
(g) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and each of the Delaware Subsidiaries and,
assuming due authorization, execution and delivery by the other parties thereto,
is a legal, valid and binding agreement of the Company and the Guarantors
enforceable against the Company and the Guarantors in accordance with its terms,
except (i) as may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or fraudulent transfer or other similar laws
relating to or affecting the enforcement of creditors' rights generally and
except as the enforceability of the Registration Rights Agreement is subject to
the application of general principles of equity (regardless of whether
considered in a proceeding at law or in equity) including, without limitation,
(A) the possible unavailability of specific performance, injunctive relief or
any other equitable remedy and (B) concepts of materiality, reasonableness, good
faith and fair dealing, and (ii) for limitations on the enforceability of
indemnification provisions imposed by law or public policy. The Registration
Rights Agreement conforms in all material respects to the description thereof
set forth in the Final Offering Memorandum.
(h) The execution, delivery and performance by the Company and each
of the Guarantors of the Purchase Agreement, the Indenture, the Securities and
the Registration Rights Agreement, in each case to the extent the Company and
each of the Guarantors is a party, and the performance by the Company and each
of the Guarantors of its obligations thereunder, including, without limitation,
the issuance, sale and delivery of the Securities, the performance by the
Company and each of the Guarantors of its obligations on or prior to the Closing
Date with respect to the Acquisitions and the Other Financings, and the
execution, delivery and performance by the Company or any Guarantor of the Other
Transaction Documents, do not and will not (1) to our knowledge, result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture,
B-3
mortgage, deed of trust, bank loan or credit agreement, lease 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, (2) result in any violation of the
provisions of the Certificate of Incorporation or Certificate of Limited
Partnership or the By-laws or Agreement of Limited Partnership, as the case may
be, in each case as amended, of the Company or any Delaware Subsidiary, (3)
result in any violation of the provisions of any statute known by such counsel
to be applicable to the Company or any Guarantor, or any order known to such
counsel, or rule or regulation known by such counsel to be applicable to the
Company or any Guarantor of any court or governmental agency or body having
jurisdiction over the Company or any Guarantor or any of its properties (other
than state securities or Blue Sky laws, as to which such counsel need express no
opinion), (4) to our knowledge, result in or require the creation or imposition
of any Lien upon or with respect to any of the properties of the Company or any
Guarantor, except pursuant to the terms of the Indenture or the Credit
Agreements, or (5) to our knowledge, constitute a default under any ordinance,
license or permit, except, in the case of the events specified in clauses (1),
(4) and (5) above, for such breaches, conflicts, violations or defaults which
would not have a Material Adverse Effect.
(i) No consent, approval, authorization, order, 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 performance by the Company and
each of the Guarantors of its obligations under the Purchase Agreement, the
Indenture and the Registration Rights Agreement or the consummation of the
Acquisitions or the Other Financings, including, without limitation, the
issuance, sale and delivery of the Securities and the execution, delivery and
performance by the Company and the Guarantors of the Other Transaction
Documents, except such consents, approvals, authorizations, registrations or
qualifications as have been obtained or as may be required under state
securities or Blue Sky laws in connection with the offer and sale of the
Securities, and as may be required by the Securities Act, the securities or Blue
Sky laws of the various states and the Trust Indenture Act in conjunction with
an exchange offer for, or registered resale of, the Securities pursuant to the
Registration Rights Agreement; and the Company and each Delaware Subsidiary has
corporate or partnership power and authority to enter into and perform its
obligations under the Purchase Agreement, the Indenture, the Registration Rights
Agreement and the Other Transaction Documents and to issue, sell and deliver the
Securities to be sold by the Issuers to the Initial Purchasers as provided in
the Purchase Agreement.
(j) The Stock Purchase Agreement, the Non-Competition Agreement, the
Consulting Agreement and Partnership Interest Purchase Agreement, Sales Agent
Extension and Modification
B-4
Agreement, License Extension and Modification Agreement, the Equipment Use
Extension and Modification Agreement, assuming due authorization, execution and
delivery by Xxxxxxx Xxxxxxxxxx, Xxxxx River Paper Company and the other parties
thereto, as the case may be, are legal, valid and binding agreements of the
Company and each Guarantor that is a party thereto, enforceable against each of
them in accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or fraudulent
transfer or other similar laws relating to or affecting the enforcement of
creditors' rights generally and except as the enforceability of such agreements
is subject to the application of general principles of equity (regardless of
whether in a proceeding at law or in equity) including, without limitation, (i)
the possible unavailability of specific performance, injunctive relief or any
other equitable remedy and (ii) concepts of materiality, reasonableness, good
faith and fair dealing.
(k) Such counsel has no knowledge of any legal or governmental
proceedings pending or threatened to which the Company or any Guarantor is a
party or of which any property of the Company or any Guarantor is the subject
that could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(l) Such counsel has no knowledge that any of the Company or any
Delaware Subsidiary is in violation of any term or provision of its Certificate
of Incorporation or Certificate of Limited Partnership or By-Laws or Agreement
of Limited Partnership, as the case may be, in each case as amended to the date
hereof.
(m) Such counsel has no knowledge of any legal or governmental
proceedings, Material Licenses, contracts or documents of a character required
by the representations of the Company or the Delaware Subsidiaries in the
Purchase Agreement to be described in the Final Offering Memorandum which are
not described as required.
(n) Neither the Company nor any of the Guarantors is an "investment
company" or an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act and the rules and regulations of the
Commission promulgated thereunder.
(o) Assuming that the representations and warranties of the Initial
Purchasers set forth in the Purchase Agreement are true and correct, the
representations and warranties of the Issuers set forth in Section 1(aa) through
1(ag) of the Purchase Agreement are true and correct and, with respect to any
institutional "accredited investors," the representations and warranties
contained in the Transferee Letter of Representations set forth in Exhibit A to
the Purchase Agreement are true and correct, it is not necessary in connection
with the offer, sale
B-5
and delivery of the Securities to the Initial Purchasers or in connection with
the initial resale of the Securities, in each case in the manner contemplated by
the Purchase Agreement and the Final Offering Memorandum, to register the
Securities under the Securities Act or to qualify the Indenture under the Trust
Indenture Act. The Indenture is in sufficient form in all material respects for
qualification under the Trust Indenture Act and the rules and regulations of the
Commission promulgated thereunder.
(p) When the Securities are issued and delivered pursuant to the
Purchase Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of the Issuers, if
any, which are listed on a national securities exchange registered under Section
6 of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder or quoted in a U.S. automated interdealer quotation
system. Accordingly, the offer and sale of the Securities in the manner
contemplated by the Purchase Agreement and the Final Offering Memorandum will be
in compliance with paragraph (d)(3) of Rule 144A under the Securities Act.
(q) The Final Offering Memorandum appears on its face to comply as to
form in all material respects with the applicable requirements of paragraph
(d)(4) of Rule 144A under the Securities Act (except that such counsel need
express no opinion or belief as to the financial statements or other financial
data included in or omitted from the Final Offering Memorandum).
(r) The statements set forth in the Final Offering Memorandum under
the caption "Certain Federal Income Tax Considerations" are accurate and
complete in all material respects and fairly present the information set forth
therein.
In addition, such counsel shall state that they have participated in
conferences with officers and representatives of the Issuers, representatives of
Xxxxxx Xxxxxxxx LLP and Deloitte & Touche LLP, independent auditors for the
Company and StyroChem, respectively, and representatives of the Initial
Purchasers and their counsel at which conferences the contents of the Final
Offering Memorandum were discussed. Although such counsel has not investigated
or verified independently, and does not pass upon or assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Final Offering Memorandum, such counsel shall state that, based upon the
foregoing, they have no knowledge that the Final Offering Memorandum, as of its
date and as of the Closing Date, 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 therein, in the light of the circumstances under which they
were made, not misleading. Such counsel need express no view as to the
financial statements and other financial data included in or omitted from the
Final Offering Memorandum.
B-6
Such counsel need express no opinion as to the laws of any
jurisdiction other than the laws of the State of New York, the General
Corporation Law of the State of Delaware, the Delaware Revised Uniform Limited
Partnership Act and the federal laws of the United States. In addition to
relying on Texas and Quebec counsel as contemplated by Section 7(h) of the
Purchase Agreement, such counsel may also rely on the opinion delivered by
counsel to the Sellers pursuant to the Stock Purchase Agreement with respect to
the opinions in paragraphs (b)(iii), (b)(v), (j) and (k) hereof.
Such counsel may also state that, when reference is made in such
opinion to such counsel's "knowledge", such reference means the actual knowledge
attributable to such counsel's representation of the Company of only those
attorneys who have given substantive attention to the transactions contemplated
by the Purchase Agreement and the Other Transaction Documents.
Such counsel may also state that, in rendering the opinions set forth
in paragraphs (d), (e), (f), (g) and (j) above, such counsel expresses no
opinion with respect to (i) any provision of any of the Indenture, the
Registration Rights Agreement and the Stock Purchase Agreement insofar as it
provides for the payment or reimbursement of costs and expenses or
indemnification for claims, losses, or liabilities in excess of a reasonable
amount determined by a court or other tribunal, (ii) the ability of any party to
collect attorneys' fees and costs in an action involving any of the Indenture,
the Registration Rights Agreement and the Stock Purchase Agreement if such party
is not the prevailing party in such action or to the extent such fees and costs
are greater than such fees and costs as may be determined to be reasonable by a
court or other tribunal or (iii) any provisions of the Indenture, the
Registration Rights Agreement and the Stock Purchase Agreement providing for
liquidated damages, if the amount of such damage is found to be in the nature of
a penalty.
B-7
EXHIBIT C
FORM OF OPINION OF STIKEMAN, XXXXXXX
(pursuant to Section 7(h)(ii) of the Purchase Agreement)
Capitalized terms are used as defined in the Purchase Agreement.
(a) StyroChem International, Ltd. ("StyroChem Ltd.") has been
--------------
incorporated and is validly existing as a corporation under the laws of the
Province of Quebec, with corporate power and authority to own its properties and
to conduct its affairs as described in the Final Offering Memorandum.
(b) As of the date hereof (after giving effect to the Acquisitions and
the Other Financings), all of the outstanding shares of capital stock of
StyroChem Ltd. are duly and validly authorized and issued, are non-assessable if
fully paid, and are owned of record by BankMont & Co.; there are, to such
counsel's knowledge, which knowledge is based solely on a review of the minute
books of StyroChem Ltd. as furnished to such counsel, no outstanding rights,
warrants or options to acquire, or instruments convertible into or exchangeable
for, any equity interests of StyroChem Ltd.
(c) The Purchase Agreement has been authorized by all necessary
corporate action on the part of StyroChem Ltd. and has been duly executed and
delivered by StyroChem Ltd.
(d) The Indenture has been authorized by all necessary corporate
action on the part of StyroChem Ltd. and has been duly executed and delivered by
StyroChem Ltd.
(e) The execution, delivery and performance by StyroChem Ltd. of the
Purchase Agreement, the Indenture, the StyroChem Ltd. Guarantee and the
Registration Rights Agreement, in each case to which it is a party, and the
performance by StyroChem Ltd. of its obligations thereunder, including, without
limitation, the execution of the StyroChem Ltd. Guarantee, the performance by
StyroChem Ltd. of its obligations on or prior to the Closing Date with respect
to the Acquisitions and the Other Financings, and the execution, delivery and
performance by StyroChem Ltd. of the Canadian Credit Agreement, do not and will
not (1) result in any violation of the provisions of the Articles of
Incorporation, Articles of Amendment or the By-laws, in each case as amended, of
StyroChem Ltd. or (2) result in any violation of the laws of the Province of
Quebec or federal laws of Canada applicable therein.
(f) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the execution of the StyroChem Ltd. Guarantee or the consummation by
StyroChem Ltd. of
C-1
the other transactions contemplated by the Purchase Agreement, the Indenture and
the Registration Rights Agreement or the consummation of the Other Financings,
including, without limitation, the execution of the StyroChem Ltd. Guarantee and
the execution, delivery and performance by StyroChem Ltd. of the Canadian Credit
Agreement; and StyroChem Ltd. has corporate power and authority to enter into
and perform its obligations under the Purchase Agreement, the Indenture, the
Registration Rights Agreement and the Canadian Credit Agreement and to execute
the StyroChem Ltd. Guarantee for the benefit of the Initial Purchasers as
provided in the Purchase Agreement.
(g) The Credit Agreements have been authorized by all necessary
corporate action on the part of StyroChem Ltd. and have been duly executed and
delivered by StyroChem Ltd. to the extent that it is a party thereto.
C-2
EXHIBIT D
FORM OF OPINION OF XXXXXXXX XXXXXXXX & XXXXXX
(pursuant to Section 7(h)(iii) of the Purchase Agreement)
Capitalized terms are used as defined in the Purchase Agreement.
(a) StyroChem International, Inc. ("StyroChem International") has been
-----------------------
duly incorporated and is validly existing as a corporation under the laws of the
State of Texas, with corporate power and authority to own its properties and to
conduct its affairs as described in the Final Offering Memorandum.
(b) As of the date hereof (after giving effect to the Acquisitions and
the Other Financings), all of the outstanding shares of capital stock of
StyroChem International are duly and validly authorized and issued, fully paid
and non-assessable, are owned of record directly by the Company or a Wholly-
Owned Subsidiary, free and clear of all liens, encumbrances, equities or claims;
there are, to such counsel's knowledge, no outstanding rights, warrants or
options to acquire, or instruments convertible into or exchangeable for, any
equity interests of StyroChem International.
(c) The Purchase Agreement has been duly authorized, executed and
delivered by StyroChem International.
(d) The Indenture has been duly authorized, executed and delivered by
StyroChem International.
(e) The execution, delivery and performance by StyroChem
International of the Purchase Agreement, the Indenture, the Securities and the
Registration Rights Agreement, in each case to it is a party, and the
performance by StyroChem International of its obligations thereunder, including,
without limitation, the issuance, sale and delivery of the Securities, the
performance by StyroChem International of its obligations on or prior to the
Closing Date with respect to the Acquisitions and the Other Financings, and the
execution, delivery and performance by StyroChem International of the Other
Transaction, do not and will not (1) result in any violation of the provisions
of the Articles of Incorporation or the By-laws, in each case as amended, of
StyroChem International or (2) result in any violation of the provisions of any
statute, or any order known to such counsel, or rule or regulation of any court
or governmental agency or body having jurisdiction over StyroChem International
or any of its properties (other than state securities or Blue Sky laws, as to
which such counsel need express no opinion).
D-1
(f) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the issuance and sale of the Securities or the consummation of the other
transactions contemplated by the Purchase Agreement, the Indenture and the
Registration Rights Agreement or the consummation of the Acquisitions or the
Other Financings, including, without limitation, the issuance, sale and delivery
of the Securities and the execution, delivery and performance by StyroChem
International of the Other Transaction, except such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the offer and sale of the
Securities or such shares, and as may be required by the Securities Act, the
securities or Blue Sky laws of the various states and the Trust Indenture Act in
conjunction with an exchange offer for, or registered resale of, the Securities
pursuant to the Registration Rights Agreement; and StyroChem International has
corporate power and authority to enter into and perform its obligations under
the Purchase Agreement, the Indenture, the Registration Rights Agreement and the
Other Transaction Documents and to issue, sell and deliver the Securities to be
sold by the Issuers to the Initial Purchasers as provided in the Purchase
Agreement.
(g) The Credit Agreements have been duly authorized, executed and
delivered by StyroChem International to the extent that it is a party thereto.
(h) To such counsel's knowledge, StyroChem International is in not in
violation of any term or provision of its Articles of Incorporation or By-Laws,
in each case as amended to the date hereof.
D-2
