Exhibit 99.1
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EXECUTION COPY
PURCHASE AGREEMENT
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This PURCHASE AGREEMENT (this "Agreement") is made and entered into as of
August 1, 2006 by and among AEP Industries Inc., a Delaware corporation (the
"Company"), AEP Industries Finance Inc., a Delaware corporation and a wholly
owned subsidiary of the Company ("Buyer"), Third Point LLC, a Delaware limited
liability company acting as investment manager or adviser to Sellers (as defined
below) ("Third Point"), Xxxxxx X. Xxxx, managing member of Third Point ("Xx.
Xxxx"), and Third Point Partners Qualified L.P., a Delaware limited partnership,
Third Point Partners L.P., a Delaware limited partnership, Third Point Resources
L.P., a Delaware limited partnership, Third Point Offshore Fund, Ltd., a Cayman
Islands limited liability exempted company, Third Point Ultra Ltd., a British
Virgin Islands limited liability company, and Third Point Resources Ltd., a
Cayman Islands limited liability exempted company (collectively, "Sellers").
WHEREAS, Sellers directly own shares of the issued and outstanding common
stock, par value $0.01 per share, of the Company ("Company Shares"); and
WHEREAS, Sellers desire to sell, and Buyer and the Company desire to
purchase, free and clear of any and all Liens (as defined herein) an aggregate
number of Company Shares having an aggregate purchase price of $30,600,000 as
set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants, agreements and representations and warranties contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE; CLOSINGS
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Section 1.1 Purchase and Sale. Upon the terms and subject to the conditions
of this Agreement, Sellers agree to sell, convey, assign, transfer and deliver
to Buyer and the Company, and Buyer and the Company agree to purchase from
Sellers, 850,000 Company Shares (the "Purchased Shares"), free and clear of any
and all mortgages, pledges, encumbrances, liens, security interests, options,
charges, claims, deeds of trust, deeds to secure debt, title retention
agreements, rights of first refusal or offer, limitations on voting rights,
proxies, voting agreements, limitations on transfer or other agreements or
claims of any kind or nature whatsoever (collectively, "Liens"), in such amounts
set forth on Schedule I hereto in respect of each Seller.
Section 1.2 Purchase Price. Upon the terms and subject to the conditions of
this Agreement, in consideration of the aforesaid sale, conveyance, assignment,
transfer and delivery to Buyer and the Company of the Purchased Shares, Buyer
and the Company shall pay to Sellers a price per Purchased Share of $36.00 (the
"Purchase Price"), for an aggregate price of $30,600,000 in cash, in such
amounts set forth on Schedule I hereto in respect of each Seller. To effectuate
the foregoing, (a) at
the First Closing (as defined below), the Company shall purchase that number of
Purchased Shares having an aggregate purchase price of $18,180,000 and (b) at
the Second Closing (as defined below), Buyer shall purchase that number of
Purchased Shares having an aggregate purchase price of $12,420,000, in the case
of each of (a) and (b), based upon the Purchase Price.
Section 1.3 Expenses. Except as expressly set forth in this Agreement, all
fees and expenses incurred by a party hereto in connection with the matters
contemplated by this Agreement shall be borne by the party incurring such fee or
expense, including without limitation the fees and expenses of any investment
banks, attorneys, accountants or other experts or advisors retained by such
party.
Section 1.4 Closings. The consummation of the transactions contemplated by
this Agreement (the "Closings") shall take place at 10:00 a.m., local time, on
August 2, 2006 and August 3, 2006 at the offices of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, or at such
other place, date or time as the parties may agree in writing (such dates being
the "First Closing Date" and "Second Closing Date", respectively, and each, a
"Closing Date"); provided that the Company's and Buyer's obligations to
consummate the transactions contemplated by this Agreement shall be conditioned
on (a) no condition existing on either Closing Date which would prevent the
Company from drawing funds under the Loan and Security Agreement, dated November
20, 2001, among the Company, Wachovia Bank (as successor by merger to Congress
Financial Corporation), as Agent, and the financial institutions party thereto,
as amended or otherwise modified through the date hereof, and (b) no injunction
or other order, judgment, law, regulation, decree or ruling or other legal
restraint or prohibition having been issued, enacted or promulgated by a court
or other governmental authority of competent jurisdiction that would have the
effect of prohibiting or preventing the consummation of the transactions
contemplated hereunder.
Section 1.5 Closing Deliveries.
(a) At the Closings, in accordance with Section 1.2, Buyer and/or the
Company, as applicable, shall deliver or cause to be delivered to Sellers the
following:
(i) on the relevant Closing Date, the cash amounts set forth on
Schedule I hereto in respect of each Seller, by wire transfer of
immediately available funds to such accounts as Third Point on behalf of
Sellers has specified in writing prior to such Closing Date; and
(ii) on the First Closing Date, a properly executed termination and
amendment agreement in the form attached hereto as Exhibit A (the
"Termination and Amendment Agreement") providing for termination, waiver
and release of all of Sellers', Third Point's and Xxxxxxx Xxxxx Xxxxxx'x
("Xx. Xxxxxx") rights, interests and claims and the Company's and J.
Xxxxxxx Xxxxx'x ("Xx. Xxxxx") obligations pursuant to
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Article II of the Agreement, dated as of February 4, 2005, by and among the
Company, Sellers, Xx. Xxxxxx and Xx. Xxxxx (the "Third Point Agreement");
provided that, for the avoidance of doubt, the Termination and Amendment
Agreement shall not limit or otherwise affect the registration rights set
forth in the Third Point Agreement in respect of the Registrable Securities
(as defined therein) that are not Purchased Shares.
(b) At the Closings, Sellers shall deliver or cause to be delivered to
Buyer and the Company the following:
(i) on the relevant Closing Date, certificates representing the
Purchased Shares to be purchased on such Closing Date as set forth on
Schedule I hereto in respect of each Seller, duly and validly endorsed or
accompanied by stock powers duly and validly executed in blank and
sufficient to convey to Buyer and the Company good, valid and marketable
title in and to such Purchased Shares, free and clear of any and all Liens;
and
(ii) on the First Closing Date, a properly executed Termination and
Amendment Agreement in accordance with Section 1.5(a)(ii).
ARTICLE II
COVENANTS
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Section 2.1 Standstill.
(a) During the period beginning on the date hereof and ending on the date
that is the second anniversary of the Second Closing Date (the "Standstill
Period"), except as specifically permitted by the terms of this Agreement,
Sellers, Third Point and Xx. Xxxx shall not, and shall cause each of their
respective Affiliates (as defined in Section 5.3) not to, acquire, offer or
propose to acquire, or agree to acquire, directly or indirectly, by purchase or
otherwise, any (i) Voting Securities (as defined in Section 5.3), or (ii) direct
or indirect rights or options to acquire (through purchase, exchange, conversion
or otherwise) any Voting Securities.
(b) During the Standstill Period, except upon the express prior written
invitation of the Company, Sellers, Third Point and Xx. Xxxx shall not, and
shall cause each of their respective Affiliates not to, directly or indirectly,
singly or as part of a partnership, limited partnership, syndicate or other
group (as those terms are used within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which meanings
shall apply for all purposes of this Agreement): (i) make, or in any way
participate in, any "solicitation" of "proxies" (as such terms are defined or
used in Regulation 14A under the Exchange Act) or exempt solicitation under Rule
14a-2(b)(1) or otherwise with respect to any Voting Securities (including by the
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execution of actions by written consent), become a "participant" or a
"participant in a solicitation" (as such terms are defined or used in Regulation
14A under the Exchange Act) with respect to the Company or otherwise communicate
with any stockholder of the Company pursuant to Rule 14a-1(l)(2)(iv) under the
Exchange Act; (ii) initiate, propose or otherwise solicit, or participate in the
solicitation of, stockholders for the approval of one or more stockholder
proposals with respect to the Company, including any proposal made pursuant to
Rule 14a-8 under the Exchange Act, or encourage or induce any other individual
or entity to initiate any stockholder proposal relating to the Company, or make
any demand or request for any list of the holders of Voting Securities; (iii)
form, encourage the formation, join or in any way participate in a "group" which
owns or seeks or offers to acquire beneficial ownership of Voting Securities or
rights to acquire such securities (other than Voting Securities beneficially
owned by Sellers, Third Point or Xx. Xxxx that are not Purchased Shares) or
which seeks or offers to acquire control of the Company or influence its
policies; (v) solicit, seek or offer to effect, negotiate with or provide any
information to any party with respect to, make any statement or proposal,
whether written or oral, either alone or in concert with others, to the board of
directors of the Company, to any director or officer of the Company or to any
other stockholder of the Company with respect to, or otherwise formulate any
plan or proposal or make any public announcement, proposal, offer or filing
under the Exchange Act, any similar or successor statute or otherwise, or take
action to cause the Company to make any such filing, with respect to: (A) any
form of business combination, restructuring, recapitalization, dissolution or
similar transaction involving the Company or any Affiliate thereof, including,
without limitation, a merger, tender or exchange offer, share repurchase or
liquidation of the Company's assets, (B) any acquisition or disposition of
assets material to the Company, (C) any request to amend, waive or terminate the
provisions of this Agreement or (D) any proposal or other statement inconsistent
with the terms of this Agreement; (vi) otherwise act, alone or in concert with
others (including by providing financing for another party), to seek or offer to
acquire control of the Company or influence, in any manner, its management,
board of directors or policies; or (vii) assist or encourage any third party,
whether or not a "group" with such third party, to take any of the actions
enumerated in this Section 2.1(b).
Section 2.2 Non-disparagement.
(a) The Company (on its own behalf and on behalf of its directors,
officers, subsidiaries and Affiliates and each of their respective successors
and assigns (collectively, the "Company Parties")) agrees that, during the
Standstill Period, it shall not (whether directly or indirectly, individually or
in concert with others, publicly or privately, orally or in writing) engage in
any conduct or make, or cause to be made, any statement, observation or opinion,
or communicate any information that is calculated to or is reasonably likely to
have the effect of (i) undermining, impugning, disparaging, injuring the
reputation of or otherwise in any way reflecting adversely or detrimentally upon
any of Sellers, Third Point or Xx. Xxxx or their respective Affiliates,
successors or assigns (collectively, the "Seller Parties") or (ii) accusing or
implying that any Seller Party engaged in any wrongful, unlawful or improper
conduct. The foregoing shall not
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apply to any compelled testimony, either by legal process, subpoena or otherwise
or to any response to any request for information from any governmental
authority having jurisdiction over the Company; provided, however, that in the
event that any Company Party is requested pursuant to, or required by,
applicable law, regulation or legal process to testify or otherwise respond to a
request for information from any governmental authority, the Company shall
notify Third Point promptly so that the Seller Parties may seek a protective
order or other appropriate remedy. In the event that no such protective order or
other remedy is obtained, or any Seller Party waives compliance with the terms
of this Section 2.2(a), such Company Party shall furnish only such information
which it has been advised by counsel is legally required and will exercise
reasonable efforts to obtain reliable assurance that such information will be
accorded confidential treatment.
(b) Each of Sellers, Third Point and Xx. Xxxx (on its or his own behalf and
on behalf of the other Seller Parties) agrees that, during the Standstill
Period, it or he shall not (whether directly or indirectly, individually or in
concert with others, publicly or privately, orally or in writing) engage in any
conduct or make, or cause to be made, any statement, observation or opinion, or
communicate any information, including, without limitation, to any member of the
press, analyst, governmental or regulatory agency, that is calculated to or is
reasonably likely to have the effect of (i) undermining, impugning, disparaging,
injuring the reputation of or otherwise in any way reflecting adversely or
detrimentally upon any Company Party or (ii) accusing or implying that any
Company Party engaged in any wrongful, unlawful or improper conduct; provided,
however, that in the event that a Seller Party is requested pursuant to, or
required by, applicable law, regulation or legal process to testify or otherwise
respond to a request from any governmental authority, Third Point shall notify
the Company promptly so that the Company may seek a protective order or other
appropriate remedy. In the event that no such protective order or other remedy
is obtained, or any Company Party waives compliance with the terms of this
Section 2.2(b), such Seller Party shall furnish only such information which it
is advised by counsel is legally required and will exercise reasonable efforts
to obtain reliable assurance that such information will be accorded confidential
treatment.
Section 2.3 Public Announcement; Public Filings.
(a) Upon execution of this Agreement, the Company and Third Point shall
issue a joint press release (in substantially the form attached hereto as
Exhibit B) with such changes as may be mutually agreed by the Company and Third
Point. No party hereto nor any of its respective Affiliates shall issue any
press release or make any public statement relating to the transactions
contemplated hereby (including, without limitation, any statement to any
governmental or regulatory agency or accrediting body) that is inconsistent
with, or are otherwise contrary to, the statements in the press release.
(b) Promptly following the date hereof, Third Point will cause to be filed
with the Securities and Exchange Commission an amendment to its Schedule 13D
filed on February 14, 2005 and prior to filing will provide the Company and its
counsel a reasonably opportunity to review and comment upon such amendment.
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Section 2.4 Confidentiality. Sellers, Third Point and Xx. Xxxx shall not
disclose and shall maintain the confidentiality of (and shall cause their
respective Affiliates, directors, officers and employees to not disclose and to
maintain the confidentiality of) any non-public information which relates to the
business, legal or financial affairs of the Company (the "Confidential
Information"). Sellers, Third Point and Xx. Xxxx shall use at least the same
degree of care to safeguard and to prevent the disclosure, publication or
dissemination of the Confidential Information as they respectively employ to
avoid unauthorized disclosure, publication or dissemination of their own
information of a similar nature, but in no case less than reasonable care. In
the event that a Seller, Third Point or Xx. Xxxx (or any Affiliate, director,
officer or employee) is requested or required (by oral question, interrogatory,
request for information or documents, subpoena, civil investigative demand or
similar process) to disclose any Confidential Information, Third Point shall (a)
notify the Company promptly so that the Company may seek a protective order or
other appropriate remedy and (b) cooperate with the Company in any effort the
Company undertakes to obtain a protective order or other remedy. In the event
that no such protective order or other remedy is obtained, the applicable party
shall disclose to the person compelling disclosure only that portion of the
Confidential Information which such party is advised by counsel is legally
required and shall exercise reasonable efforts to obtain reliable assurance that
confidential treatment is accorded the Confidential Information so disclosed.
Section 2.5 Demand Registration. Sellers hereby (a) make a request pursuant
to Section 3.2(a) of the Third Point Agreement that the Company file a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") to cover the registration of any and all of Sellers'
Registrable Securities (as defined in the Third Point Agreement) that are not
Purchased Shares and (b) represent that there are no Holders (as defined in the
Third Point Agreement) other than Sellers and Xx. Xxxxxx who could be entitled
to notice from the Company of such request as contemplated by Section 3.2(a),
which notice is hereby waived by the holders of Registrable Securities party
hereto. The Company acknowledges such registration request and agrees to effect
a registration of such Registrable Securities in accordance with the terms,
conditions and limitations contained in Article III of the Third Point
Agreement. The Company represents, as of the date hereof, that it is not aware
of any existing Valid Business Reason (as defined in the Third Point Agreement)
that would permit it to postpone filing a registration statement relating to
Sellers' request or, when filed, withdraw and terminate the effectiveness of or
postpone amending or supplementing such registration statement under Section
3.2(f) of the Third Point Agreement. Sellers hereby acknowledge that the Company
may not be eligible to use Form S-3 to effect such registration.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
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SELLERS, THIRD POINT AND XX. XXXX
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Each of Sellers, Third Point and Xx. Xxxx hereby makes, jointly and
severally with respect to each other such party, the following representations
and warranties to Buyer and the Company:
Section 3.1 Existence; Authority. Each of Sellers and Third Point is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Each of Sellers, Third Point and Xx. Xxxx has
all requisite competence, power and authority to execute and deliver this
Agreement and the Termination and Amendment Agreement, to perform its or his
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement and the Termination
and Amendment Agreement.
Section 3.2 Enforceability. This Agreement has been duly and validly
executed and delivered by each of Sellers, Third Point and Xx. Xxxx and, upon
its execution and delivery, the Termination and Amendment Agreement will be duly
and validly executed and delivered by Third Point, Xx. Xxxxxx and each Seller
party thereto and, assuming due and valid authorization, execution and delivery
by Buyer, the Company and/or Xx. Xxxxx, as applicable, this Agreement
constitutes, and the Termination and Amendment Agreement will constitute, a
legal, valid and binding obligation of each of Sellers, Third Point, Xx. Xxxx
and/or Xx. Xxxxxx, as applicable, enforceable against each such person in
accordance with its terms, except as such enforceability may be affected by
bankruptcy, insolvency, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles.
Section 3.3 Ownership. Each Seller is the sole record and beneficial owner
of the Purchased Shares set forth opposite its name on Schedule I hereto, free
and clear of any and all Liens. Each Seller has full power and authority to
transfer full legal ownership of its respective Purchased Shares to Buyer and
the Company, and no Seller is required to obtain the approval of any person or
governmental agency or organization to effect the sale of the Purchased Shares.
The entire direct or indirect beneficial ownership of Sellers, Third Party and
Xx. Xxxx or any of their respective Affiliates in the Company is 2,000,000
Company Shares.
Section 3.4 Good Title Conveyed. The stock certificates and stock powers
executed and delivered by Sellers at the Closings will be valid and binding
obligations of Sellers, enforceable in accordance with their respective terms,
and effectively vest in Buyer and the Company good, valid and marketable title
to all Purchased Shares, free and clear of any and all Liens.
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Section 3.5 Absence of Litigation. There is no suit, action, investigation
or proceeding pending or, to the knowledge of any Seller, Third Point or Xx.
Xxxx, threatened against such party that could impair the ability of any of
Sellers, Third Point or Xx. Xxxx to perform its obligations hereunder or to
consummate the transactions contemplated hereby.
Section 3.6 Other Acknowledgments.
(a) Each of Sellers, Third Point and Xx. Xxxx hereby represents and
acknowledges that it or he is a sophisticated investor and that it or he knows
that Buyer or the Company may have material Confidential Information concerning
the Company and its condition (financial and otherwise), results of operations,
businesses, properties, plans and prospects and that such information could be
material to Sellers' decision to sell the Purchased Shares or otherwise
materially adverse to Sellers' interests. Each of Sellers, Third Point and Xx.
Xxxx acknowledges and agrees that Buyer and the Company shall have no obligation
to disclose to it or him any such information and hereby waives and releases, to
the fullest extent permitted by law, any and all claims and causes of action it
has or may have against Buyer, the Company and their respective Affiliates,
officers, directors, employees, agents and representatives based upon, relating
to or arising out of nondisclosure of such information or the sale of the
Purchased Shares hereunder.
(b) Each of Sellers, Third Point and Xx. Xxxx further represents that it or
he has adequate information concerning the business and financial condition of
the Company to make an informed decision regarding the sale of the Purchased
Shares and has, independently and without reliance upon Buyer or the Company,
made its or his own analysis and decision to sell the Purchased Shares. With
respect to legal, tax, accounting, financial and other considerations involved
in the transactions contemplated by this Agreement, including the sale of the
Purchased Shares, none of Sellers, Third Point or Xx. Xxxx is relying on Buyer
or the Company (or any agent or representative thereof). Each of Sellers, Third
Point and Xx. Xxxx has carefully considered and, to the extent it or he believes
such discussion necessary, discussed with professional legal, tax, accounting,
financial and other advisors the suitability of the transactions contemplated by
this Agreement, including the sale of the Purchased Shares. Each of Sellers,
Third Point and Xx. Xxxx acknowledges that none of Buyer or the Company or any
of their respective directors, officers, subsidiaries or Affiliates has made or
makes any representations or warranties, whether express or implied, of any kind
except as expressly set forth in this Agreement.
(c) Sellers, Third Point and Xx. Xxxx are "accredited investors" as defined
in Rule 501 promulgated under the Securities Act. The sale of the Purchased
Shares by Sellers (i) was privately negotiated in an independent transaction and
(ii) does not violate any rules or regulations applicable to Sellers.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
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BUYER AND THE COMPANY
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Each of Buyer and the Company makes, jointly and severally with respect to
each other, the following representations and warranties to Sellers:
Section 4.1 Existence; Authority. Each of Buyer and the Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each of Buyer and/or the Company, as applicable, has
all requisite corporate power and authority to execute and deliver this
Agreement and the Termination and Amendment Agreement, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement and the
Termination and Amendment Agreement.
Section 4.2 Enforceability. This Agreement has been duly and validly
executed and delivered by Buyer and the Company and, upon its execution and
delivery, the Termination and Amendment Agreement will be duly and validly
executed and delivered by the Company and Xx. Xxxxx and, assuming due and valid
authorization, execution and delivery by Sellers, Third Point, Xx. Xxxx and/or
Xx. Xxxxxx, as applicable, this Agreement constitutes, and the Termination and
Amendment Agreement will constitute, a legal, valid and binding obligation of
each of Buyer, the Company and/or Xx. Xxxxx, as applicable, enforceable against
it in accordance with its terms, except as such enforceability may be affected
by bankruptcy, insolvency, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles.
Section 4.3 Absence of Litigation. There is no suit, action, investigation
or proceeding pending or, to the knowledge of Buyer or the Company, threatened
against such party that could impair the ability of Buyer or the Company to
perform its obligations hereunder or to consummate the transactions contemplated
hereby.
ARTICLE V
MISCELLANEOUS
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Section 5.1 Survival. Each of the representations, warranties, covenants,
and agreements in this Agreement or pursuant hereto shall survive the Closings.
Notwithstanding any knowledge of facts determined or determinable by any party
by investigation, each party shall have the right to fully rely on the
representations, warranties, covenants and agreements of the other parties
contained in this Agreement or in any other documents or papers delivered in
connection herewith. Each representation, warranty, covenant and agreement of
the parties contained in this Agreement is independent of each other
representation, warranty, covenant and agreement. Except as
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expressly set forth in this Agreement, no party has made any representation
warranty, covenant or agreement.
Section 5.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if so given) by hand delivery, cable, telecopy or
mail (registered or certified, postage prepaid, return receipt requested) to the
respective parties hereto addressed as follows:
If to the Company or Buyer:
c/o AEP Industries Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Xxx Xxxxxxxx
Facsimile: (000) 000-0000
If to any Seller, Third Point or Xx. Xxxx:
x/x Xxxxx Xxxxx LLC
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Operations
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
Section 5.3 Certain Definitions. As used in this Agreement, (a) the term
"Affiliate" shall have the meaning set forth in Rule 12b-2 under the Exchange
Act and shall include persons who become Affiliates of any person subsequent to
the date
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hereof; (b) the term "Voting Securities" shall mean the Company Shares and any
other securities of the Company entitled to vote in the election of directors,
or securities convertible into, or exercisable or exchangeable for, securities
of the Company entitled to vote in the election of directors, whether or not
subject to the passage of time or other contingencies; and (c) the Company,
Buyer, Third Point, Xx. Xxxx and each Seller will be referred to herein
individually as a "party" and collectively as "parties."
Section 5.4 Specific Performance. Each of Buyer and the Company, on the one
hand, and Sellers, Third Point and Xx. Xxxx, on the other hand, acknowledge and
agree that the other would be irreparably injured by a breach of this Agreement
and that money damages are an inadequate remedy for an actual or threatened
breach of this Agreement. Accordingly, the parties agree to the granting of
specific performance of this Agreement and injunctive or other equitable relief
as a remedy for any such breach or threatened breach, without proof of actual
damages, and further agree to waive any requirement for the securing or posting
of any bond in connection with any such remedy. Such remedy shall not be deemed
to be the exclusive remedy for a breach of this Agreement, but shall be in
addition to all other remedies available at law or equity.
Section 5.5 No Waiver. Any waiver by any party hereto of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party hereto to insist upon strict adherence to
any term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
Section 5.6 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated by
such holding. The parties agree that the court making any such determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration or area of, delete specific words or phrases in, or replace any such
invalid or unenforceable provision with one that is valid and enforceable and
that comes closest to expressing the intention of such invalid or unenforceable
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
Section 5.7 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided that this Agreement (and any of the rights, interests or
obligations of any party hereunder) may not be assigned by any party without the
prior written consent of the other parties hereto, such consent not to be
unreasonably withheld. Any purported assignment of a party's rights under this
Agreement in violation of the preceding sentence shall be null and void.
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Section 5.8 Entire Agreement; Amendments. This Agreement (including any
Schedules and Exhibits hereto) constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and, except as expressly set forth herein,
is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder. This Agreement may be amended only by a written
instrument duly executed by the parties hereto or their respective permitted
successors or assigns.
Section 5.9 Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 5.10 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without giving effect to choice of law principles thereof that would cause the
application of the laws of any other jurisdiction.
Section 5.11 Submission to Jurisdiction. Each of the parties irrevocably
submits to the exclusive jurisdiction and service and venue in any federal or
state court sitting in the State of Delaware for the purposes of any action,
suit or proceeding arising out of or with respect to this Agreement. Each of the
parties irrevocably and unconditionally waives any objections to the laying of
venue of any action, suit or proceeding relating to this Agreement in any
federal or state court sitting in the State of Delaware, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY.
Section 5.12 Counterparts; Facsimile. This Agreement may be executed in
counterparts, including by facsimile or PDF electronic transmission, each of
which shall be deemed an original, but all of which together shall constitute
one and the same Agreement.
Section 5.13 Further Assurances. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto agrees to execute such
additional documents, to use commercially reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate or make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
Section 5.14 Interpretation. The parties acknowledge and agree that this
Agreement has been negotiated at arm's length and among parties equally
sophisticated and knowledgeable in the matters covered hereby. Accordingly, any
rule of law or legal
12
decision that would require interpretation of any ambiguities in this Agreement
against the party that has drafted it is not applicable and is hereby waived.
[SIGNATURE PAGES FOLLOW]
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
AEP INDUSTRIES INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President, Finance
and Chief Financial Officer
AEP INDUSTRIES FINANCE INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Chief Financial
Officer
THIRD POINT LLC
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director Operations
Third Point LLC
XXXXXX X. XXXX
/s/ Xxxxxx X. Xxxx
----------------------------------------------
Name: Xxxxxx X. Xxxx
THIRD POINT PARTNERS QUALIFIED L.P.
By: Third Point Advisors LLC, its general
partner
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director Operations
Third Point LLC
[Purchase Agreement]
THIRD POINT PARTNERS L.P.
By: Third Point Advisors LLC, its general
partner
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director Operations
Third Point LLC
THIRD POINT RESOURCES L.P.
By: Third Point Advisors LLC, its general
partner
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director Operations
Third Point LLC
THIRD POINT OFFSHORE FUND, LTD.
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director Operations
Third Point LLC
THIRD POINT ULTRA LTD.
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director Operations
Third Point LLC
THIRD POINT RESOURCES LTD.
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director Operations
Third Point LLC
[Purchase Agreement]
SCHEDULE I
Purchased Shares; Payments
--------------------------
--------- ------------------ ----------------- ------------------ ------------- ------------------ --------------- -----------------
Cert. # Name of Seller # of Purchased Payment to be # of Payment to be Total # of Total payment to
------- -------------- --------------- -------------- ----- -------------- ----------- ----------------
Shares to be made to Seller Purchased made to Seller Purchased be made to
------------- --------------- ---------- --------------- ---------- ----------
delivered by at First Closing Shares to be at Second Closing Shares Seller in
------------- ---------------- ------------- ----------------- ------- ---------
Seller at First delivered by beneficially consideration of
---------------- ------------- ------------- ----------------
Closing Seller at owned by Seller Purchased Shares
------- ---------- --------------- ----------------
Second Closing
-------- --------------- --------------- ---------------- -------------- ----------------- --------------- ------------------
--- Third Point --- --- --- --- --- ---
Partners Qualified
L.P.
-------- --------------- --------------- ---------------- -------------- ----------------- --------------- ------------------
AEP 0000 Xxxxx Xxxxx 140,000 $5,040,000 50,000 $1,800,000 190,000 $6,840,000
Partners L.P.
-------- --------------- --------------- ---------------- -------------- ----------------- --------------- ------------------
AEP 0000 Xxxxx Xxxxx 262,400 $9,446,400 250,000 $9,000,000 512,400 $18,446,400
Offshore Fund, Ltd.
--------- --------------- --------------- ---------------- -------------- ----------------- --------------- -----------------
AEP 0000 Xxxxx Xxxxx Ultra 40,000 $1,440,000 45,000 $1,620,000 85,000 $3,060,000
Ltd.
-------- --------------- --------------- ---------------- -------------- ----------------- --------------- ------------------
AEP 0000 Xxxxx Xxxxx 25,300 $910,800 --- --- 25,300 $910,800
Resources L.P.
-------- --------------- --------------- ---------------- -------------- ----------------- --------------- ------------------
AEP 0000 Xxxxx Xxxxx 37,300 $1,342,800 --- --- 37,300 $1,342,800
Resources Ltd.
-------- --------------- --------------- ---------------- -------------- ----------------- --------------- ------------------
TOTAL 505,000 $18,180,000 345,000 $12,420,000 850,000 $30,600,000
-------- --------------- --------------- ---------------- -------------- ----------------- --------------- ------------------
EXHIBIT A
Form of Termination and Amendment Agreement
-------------------------------------------
TERMINATION AND AMENDMENT AGREEMENT
This Termination and Amendment Agreement (this "Agreement") is made and
entered into as of August [_], 2006 by and among AEP Industries Inc., a Delaware
corporation (the "Company"), J. Xxxxxxx Xxxxx ("Xx. Xxxxx"), Xxxxxxx Xxxxx
Xxxxxx ("Xx. Xxxxxx") and Third Point Partners Qualified L.P., a Delaware
limited partnership, Third Point Partners L.P., a Delaware limited partnership,
Third Point Resources L.P. (formerly Banzai Partners L.P.), a Delaware limited
partnership, Third Point Offshore Fund, Ltd., a Cayman Islands limited liability
exempted company, Third Point Ultra Ltd. (formerly Points West International
Investments Ltd.), a British Virgin Islands limited liability company, Third
Point Resources Ltd. (formerly Banzai Offshore Fund, Ltd.), a Cayman Islands
limited liability exempted company (together with Xx. Xxxxxx, "Sellers"), and
Third Point LLC, a Delaware limited liability company ("Third Point").
W I T N E S S E T H
WHEREAS, the Company, Sellers (other than Xx. Xxxxxx) and Third Point have
entered into a Purchase Agreement (the "Purchase Agreement"), made and entered
into as of August 1, 2006, by and among the Company, AEP Industries Finance Inc.
("Buyer"), a Delaware corporation and a wholly owned subsidiary of the Company,
Sellers (other than Xx. Xxxxxx), Third Point and Xxxxxx X. Xxxx, managing member
of Third Point, pursuant to which Sellers (other than Xx. Xxxxxx) will sell, and
Buyer and the Company will purchase, an aggregate number of shares of common
stock, par value $0.01 per share, of the Company having an aggregate purchase
price of $30,600,000 as determined therein;
WHEREAS, the Purchase Agreement requires that the Company, Buyer and
Sellers (other than Xx. Xxxxxx) effect the termination of certain governance
related rights of Sellers and Third Point and obligations of the Company and Xx.
Xxxxx under Article II of the Agreement (the "Third Point Agreement"), dated as
of February 4, 2005, by and among the Company, Sellers and Xx. Xxxxx; and
WHEREAS, the Company, Xx. Xxxxx, Sellers and Third Point each desire to
effect such termination in accordance with Section 6.2(a) of the Third Point
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Termination and Amendment. The Third Point Agreement is hereby
amended by deleting Article II in its entirety. Each of Sellers and Third Point
(for itself and each of its Affiliates) hereby unconditionally, irrevocably and
forever (a)
A-1
waives any and all of its rights, interests and claims that it ever had, now has
or ever may have or claim to have against Xx. Xxxxx and the Company (including
its successors and assigns and any of its present or former directors, officers,
employees or agents) pursuant to such Article and (b) releases and discharges
Xx. Xxxxx and the Company (including its successors and assigns and any of its
present or former directors, officers, employees or agents) from any and all
obligations of any kind or character whatsoever thereunder. Except as expressly
amended hereby, the Third Point Agreement shall remain in full force and effect.
For the avoidance of doubt, the parties hereto do not intend that this Agreement
should limit or otherwise affect the registration rights set forth in Article
III of the Third Point Agreement in respect of the Registrable Securities (as
defined therein) that are not Purchased Shares (as defined in the Purchase
Agreement), which registration rights shall remain in effect in accordance with
the terms of the Third Point Agreement.
Section 2. Governing Law; Submission to Jurisdiction. This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Delaware, without giving effect to choice of law principles thereof
that would cause the application of the laws of any other jurisdiction. Each of
the parties irrevocably submits to the exclusive jurisdiction and service and
venue in any federal or state court sitting in the State of Delaware for the
purposes of any action, suit or proceeding arising out of or with respect to
this Agreement. Each of the parties irrevocably and unconditionally waives any
objections to the laying of venue of any action, suit or proceeding relating to
this Agreement in any federal or state court sitting in the State of Delaware,
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY.
[SIGNATURE PAGES FOLLOW]
A-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
AEP INDUSTRIES INC.
By:
-------------------------------------------
Name:
Title:
THIRD POINT LLC
By:
------------------------------------------
Name:
Title:
THIRD POINT PARTNERS QUALIFIED L.P.
By: Third Point Advisors LLC, its general
partner
By:
------------------------------------------
Name:
Title:
THIRD POINT PARTNERS L.P.
By: Third Point Advisors LLC, its general
partner
By:
------------------------------------------
Name:
Title:
[Termination and Amendment Agreement]
THIRD POINT RESOURCES L.P.
By: Third Point Advisors LLC, its general
partner
By:
------------------------------------------
Name:
Title:
THIRD POINT OFFSHORE FUND, LTD.
By:
------------------------------------------
Name:
Title:
THIRD POINT ULTRA LTD.
By:
------------------------------------------
Name:
Title:
THIRD POINT RESOURCES LTD.
By:
------------------------------------------
Name:
Title:
XXXXXXX XXXX XXXXXX
----------------------------------------------
Name: Xxxxxxx Xxxxx Xxxxxx
[Termination and Amendment Agreement]
J. XXXXXXX XXXXX
----------------------------------------------
Name: J. Xxxxxxx Xxxxx
[Termination and Amendment Agreement]
EXHIBIT B
Form of Joint Press Release
---------------------------
AEP Industries Inc. and Third Point LLC Announce Stock Repurchase Agreement
AEP Industries Inc. Announces Separate $15 Million Stock Repurchase Program
SOUTH HACKENSACK, N.J. and NEW YORK, N.Y., August 1, 2006. AEP Industries Inc.
(Nasdaq: AEPI, the "Company") and Third Point LLC ("Third Point") today
announced they have entered into an agreement whereby the Company will
repurchase 850,000 of its common shares from investment funds affiliated with
Third Point in a privately negotiated transaction at $36 per share for a total
purchase price of $30.6 million. The price per share represents a discount of
19.4% to yesterday's closing price of the Company's common stock.
Xxxxxxx Xxxxx, Chairman and Chief Executive Officer of the Company, commented,
"This transaction enables us to make attractive use of our capital to acquire a
meaningful block of Company shares at a favorable price. The repurchase should
be immediately accretive to earnings per share."
The repurchase, which is expected to close in the next several days, will reduce
Third Point's beneficial ownership of the Company's common stock from
approximately 23% to approximately 15%. Pursuant to the purchase agreement,
Third Point and its affiliates will be bound by a two-year standstill provision
and their rights to appoint up to two members of the board of directors of the
Company will terminate. Under a previous agreement with the Company, Third Point
has requested that the Company register its remaining shares. The Company will
take immediate steps to comply with this request.
Authorization of Stock Repurchase Program
The Company separately announced that its Board of Directors has authorized a
stock repurchase program under which the Company may purchase up to $15 million
of its common stock. Repurchases would be made in the open market, in privately
negotiated transactions or by other means, from time to time, subject to market
conditions, applicable legal requirements and other factors. The program does
not obligate the Company to acquire any particular amount of common stock and
the program may be suspended at any time at the Company's discretion.
AEP Industries Inc. manufactures, markets, and distributes an extensive range of
plastic packaging products for the food/beverage, industrial and agricultural
markets. The Company has operations in three countries in North America and
Europe.
Except for historical information contained herein, statements in the release
are forward-looking statements that are made pursuant to the safe harbor
provisions of the Private
B-1
Securities Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties, which may cause the Company's actual
results in future periods to differ materially from forecasted results. Those
risks include, but are not limited to, risks associated with pricing, volume,
cash flow guidance, fluctuations in exchange rates and conditions of markets.
Those and other risks are described in the Company's filings with the Securities
and Exchange Commission (the "SEC") over the last 12 months, copies of which are
available from the SEC or may be obtained from the Company.
B-2
