EXECUTION VERSION
IRREVOCABLE PROXY
Dated as of February 4, 2005
Reference is hereby made to that certain (i) Purchase and Sale Agreement,
dated as of the date hereof, between the purchasers identified therein (the
"Purchasers"), including the undersigned Purchasers (such undersigned
Purchasers, the "Third Point Purchasers"), and Xxxxxx Holdings, LLC, a Delaware
limited liability company ("Xxxxxx"), pursuant to which Xxxxxx sold, transferred
and assigned to the Third Point Purchasers, and the Third Point Purchasers
purchased from Xxxxxx, 681,000 shares of common stock, par value $0.01 per share
(the "Common Stock"), of AEP Industries Inc., a Delaware corporation (the
"Company"), and (ii) Agreement, dated as of the date hereof (as amended from
time to time, the "Agreement"), by and among the Company, the Purchasers and J.
Xxxxxxx Xxxxx, pursuant to which, among other things, the Company, the
Purchasers and Xx. Xxxxx agreed to certain matters relating to the Company and
the Company granted to the Purchasers certain registration and other rights.
Xx. Xxxxx is a Permitted Holder (as defined in that certain Indenture,
dated as of November 19, 1997 (as amended from time to time, the "Indenture"),
between the Company and The Bank of New York, as trustee). For purposes of the
Indenture, Xx. Xxxxx, as a Permitted Holder, is the beneficial owner (within the
meaning of the Indenture) of 1,339,289 shares of Common Stock (such shares,
together with any other shares of Common Stock with respect to which Xx. Xxxxx
acquires such beneficial ownership, the "Xxxxx Shares"). As of the date hereof,
each Third Point Purchaser is the beneficial and record owner of that number of
shares (the "Proxy Shares") of Common Stock set forth opposite its name on
Schedule I attached to this Irrevocable Proxy in the column titled "Proxy
Shares", and is the beneficial and record owner of that total number of shares
(the "Total Shares") of Common Stock set forth opposite its name on such
Schedule I in the column titled "Total Shares". As of the date hereof, the sum
of the Xxxxx Shares plus the Proxy Shares is greater than the difference of the
Total Shares minus the Proxy Shares. Pursuant to the Agreement, each Third Point
Purchaser, in its capacity as the beneficial and record owner of such Proxy
Shares, has agreed to grant to Xx. Xxxxx an irrevocable proxy to vote the Proxy
Shares upon the terms and subject to the conditions set forth herein.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, each Third Point Purchaser, intending to be legally
bound, hereby irrevocably appoints and constitutes Xx. Xxxxx as the sole and
exclusive proxy of its Proxy Shares, with full power and authority to vote such
Proxy Shares, or to consent or withhold consent with respect to the Proxy
Shares, on any matter presented to the stockholders of the Company to the same
extent and with the same effect as if such shares of Common Stock were
registered in the name of Xx. Xxxxx in the books and records of the Company and
under any applicable laws and regulations governing the rights of stockholders
of a Delaware corporation. The proxy granted hereby shall be irrevocable and is
coupled with an interest sufficient in law to support an irrevocable proxy
(including, without limitation, such irrevocable proxy granted hereunder) and
shall not be terminated by any act of the Purchasers, by lack of appropriate
power or authority or by the occurrence of any other event or events except as
provided herein.
The irrevocable proxy granted hereunder shall terminate and be of no
further force or effect upon the earliest to occur of:
(i) November 15, 2007;
(ii) the date on which the Company obtains each applicable Noteholder
Waiver (as defined in the Agreement); and
(iii) the consummation by the Company of a Repayment (as defined in the
Agreement).
provided, however, that, notwithstanding the foregoing, the irrevocable proxy
granted hereunder shall terminate and be of no further force or effect with
respect to any particular Proxy Share upon the sale, transfer or assignment of
such Proxy Share to any Person (as defined in the Agreement) who is not a
controlled Affiliate (as defined in the Agreement) of any Third Point Purchaser.
In the event that, after the date of this Irrevocable Proxy, any Third Point
Purchaser acquires record or beneficial ownership of additional shares of Common
Stock or sells or disposes of shares of Common Stock such that it is no longer
the record or beneficial owner thereof, then the Third Point Purchasers will
immediately adjust, if necessary, the number and amount of Proxy Shares subject
to this Irrevocable Proxy so that thereupon and thereafter, the sum of the Xxxxx
Shares plus the Proxy Shares remains greater than the difference of the Total
Shares minus the Proxy Shares. Each Third Point Purchaser and Xx. Xxxxx will
take all actions reasonably requested by any Third Point Purchaser or Xx. Xxxxx
(as the case may be) to effect the foregoing adjustment.
In the event of the death or incapacity of Xx. Xxxxx, then Xx. Xxxxx will
be substituted and replaced by either the administrator or representative of his
estate or any of his lineal descendants or other Persons who are designated by
the Company's Board of Directors and whose designation in substitution and
replacement of Xx. Xxxxx will not result in a Change of Control (as defined in
the Indenture).
The Third Point Purchasers agree and acknowledge that, subject to the
Agreement, Xx. Xxxxx, under this Irrevocable Proxy, has not agreed and will not
be restricted in any manner from voting the Proxy Shares and utilizing his
authority hereunder, including in a manner that may be opposed by the Third
Point Purchasers or different than the votes and views of the Third Point
Purchasers.
Each Third Point Purchaser represents and warrants to Xx. Xxxxx that it is
the beneficial and record owner of the Proxy Shares and the Total Shares set
forth opposite its name on Schedule I attached hereto, it has full power and
authority to execute and deliver this Irrevocable Proxy and it has not granted
any proxies or other rights to any Person relating to its Proxy Shares that are
inconsistent with the provisions of this Irrevocable Proxy.
THIS IRREVOCABLE PROXY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY
CHOICE OF
-2-
LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE, OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF DELAWARE TO BE APPLIED. THE INTERNAL LAW OF THE STATE OF DELAWARE WILL
CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS IRREVOCABLE PROXY, EVEN IF
UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE
SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.
ANY SUIT, ACTION OR PROCEEDING BROUGHT BY ANY PARTY HERETO SEEKING TO
ENFORCE ANY PROVISION OF, OR BASED ON ANY MATTER ARISING OUT OF OR IN CONNECTION
WITH, THIS IRREVOCABLE PROXY OR THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
BROUGHT IN ANY FEDERAL OR STATE COURT LOCATED IN NEW CASTLE COUNTY, DELAWARE.
EACH PARTY HERETO HEREBY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT LOCATED
IN NEW CASTLE COUNTY, DELAWARE HAVING SUBJECT MATTER JURISDICTION IN ANY SUIT,
ACTION OR PROCEEDING BROUGHT BY ANY OTHER PARTY HERETO SEEKING TO ENFORCE ANY
PROVISION OF, OR BASED ON ANY MATTER ARISING OUT OF, OR IN CONNECTION WITH, THIS
IRREVOCABLE PROXY OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES HERETO
ALSO AGREE THAT EACH SUCH PARTY MAY BRING COUNTERCLAIMS IN ANY SUIT, ACTION OR
PROCEEDING BROUGHT AGAINST IT SEEKING TO ENFORCE ANY PROVISION OF, OR BASED ON
ANY MATTER ARISING OUT OF OR IN CONNECTION WITH, THIS IRREVOCABLE PROXY OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
IN ANY SUCH COURT OR THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORM. PROCESS IN ANY SUCH SUIT,
ACTION OR PROCEEDING MAY BE SERVED ON ANY PARTY HERETO ANYWHERE IN THE WORLD,
WHETHER WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
IRREVOCABLE PROXY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[remainder of page intentionally left blank]
-3-
IN WITNESS WHEREOF, the undersigned have executed this Irrevocable Proxy as
of the date first above written.
THIRD POINT:
THIRD POINT PARTNERS QUALIFIED L.P.
By: Third Point Advisors LLC,
its general partner
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer
THIRD POINT PARTNERS L.P.
By: Third Point Advisors LLC,
its general partner
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer
BANZAI Partners L.P.
By: Third Point Advisors LLC,
its general partner
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer
POINTS WEST INTERNATIONAL
INVESTMENTS LTD.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer
BANZAI OFFSHORE FUND, LTD.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer
ACKNOWLEDGED AND AGREED:
/s/ J. Xxxxxxx Xxxxx
----------------------
Name: J. Xxxxxxx Xxxxx
SCHEDULE I
to
IRREVOCABLE PROXY
Proxy Shares
------------
Purchaser Proxy Shares Total Shares
--------- ------------ ------------
Third Point Partners Qualified L.P. 62,400 62,400
Third Point Partners L.P. 308,862 329,000
Points West International
Investments Ltd. 227,000 227,000
Banzai Partners L.P. 25,300 25,300
Banzai Offshore Fund, Ltd. 37,300 37,300
Total 660,862 681,000
